This section is from the book "Real Property, An Introductory Explanation Of The Law Relating To Land", by Alfred F Topham. Also available from Amazon: The New Law Of Property.
A vested remainder is, as we have seen, similar to a reversion, except that it does not go back to the grantor and there is no tenure.
The following rules are the same in both cases.
1. The rule as to Merger. - When the particular estate is conveyed to the person who holds the remainder or reversion - or when the remainderman or reversioner conveys his estate to the tenant of the particular estate, the particular estate is swallowed up or "merged" in the remainder or reversion, provided there is no other particular estate between the two estates.
Thus, land is granted to A for life, remainder to B in fee simple.
If A surrenders or conveys his estate to B, the fee simple swallows up the life estate, and B merely has a fee simple in possession.
If, however, it were granted to A for life, remainder to C for life, remainder to B in fee simple, and A conveyed his estate to B, there would be no merger, for C's estate comes between.
This leads to a curious result. Thus - Land is granted to A for 1000 years. Later, the same land is granted to A for life.
The term of years is merged in the life estate, and immediately ceases.
Merger can only take place when -
(1) Two estates in the same land vest in the same person, and (2) both estates are legal, or both are equitable, and (3) both are held in the same right.
I.e a life estate held by A as trustee for B will not merge in a fee simple which A holds as his own.
and (4) there is no vested remainder between the two estates.
2. The Rule in Shelley's Case.
The rule, roughly speaking, is this, a gift of land "to A for life with remainder to his heirs" gives A a fee simple.
Possible origin of the ride.
At the time of William I., if land was granted to A and his heirs, A (as we have seen) could not sell the fee simple, but could only enjoy the land for his life, and after his death it would go to his heirs. Thus, a gift to "A and his heirs " was the same in effect as a gift "to A for life, remainder to his heirs." The rule seems, therefore, to have grown up that either of these forms of gift gave A a fee simple. Later, a tenant in fee simple acquired the right to deal with the whole fee simple, but the rule remains, although the apparent reason for it has gone.
The same rule also applies if some other estate is put between A's life estate and the gift to his heirs.
Thus, land is granted to A for life, remainder to B for life; remainder to the heirs of A. This gives A the estate for his life, then to B for his life; then to A in fee simple.
Thus the words "to the heirs of A" do not give any estate directly to the person who is A's heir: but define or "limit" the estate which is given to A.
The Rule in Shelley s Case fully stated is as follows: -
Where in any conveyance the ancestor takes an estate of freehold and in the same conveyance an estate is limited, either mediately or immediately, to his heirs or the heirs of his body, the words "heirs" are words of limitation of the estate of the ancestor and not words of gift to the heirs.
This rule may be paraphrased as follows: -
When A takes an estate of freehold, and in the same conveyance an estate is given (either with some other estate in between, or without) to the heirs of A, or the heirs of the body of A, the words "heirs" describe the estate which A takes, and do not give anything to the heirs.
Land was granted to A for life, remainder to B for life, remainder to the "heirs" of A.
A by will devised all his land to his second son.
Result: on the death of A the land goes to B for life: and on the death of B it goes to the second son of A: because the word "heirs" gave A a fee simple which he devised to the second son by will.
The eldest son was of course A's heir, and would have taken the land if the words "to the heirs of A" had been construed to mean "to the person who shall be the heir of A."
Van Grutten v. Fox well,  A. C. 658.
William Harris devised land among his children in equal shares for their lives, and after their deaths to the heirs of their bodies in equal shares.
He had one daughter, Mary. Mary claimed that she took an estate tail under the will and barred the entail.
After her death and the failure of her issue, her heir claimed that she had a fee simple when she died.
The heir of William Harris (a) claimed that Mary never had more than a life estate.
Held, the rule in Shelley's case applied and Mary took an estate tail which she turned into a fee simple and therefore the land went to her heir (b).
The rule in Shelley's case only applies when an estate of freehold is first given to the person whose heirs are afterwards mentioned,
Thus the rule does not apply to - -
(1) A gift to A for 50 years, if he shall so long; live, with remainder to the heirs of A, or (2) a gift to B for life with remainder to the heirs of A. For here there is no gift to A at all.
In both these cases, on the termination of the first estate, the land will go to the person who has proved to be the heir of A after his death.
The rule is a rule of law and not a rule for ascertaining the intention of the grantor, and therefore it does not apply to documents in the construction of which the intention of the grantor is more especially considered.
Thus, if A grants land "unto and to the use of B upon trust to settle it upon C for his life, and after C's death on the heirs of C's body in the usual way," A obviously intends that B shall use the proper legal language for the purpose of carrying out his intention, and B must therefore settle the land on C for life, with remainder to the sons of C in tail, etc.
This form of trust where the settlor has merely given his trustee instructions to prepare a settlement is called an "executory trust" or trust to be
(a) William Harris died before 1833, so that his heir would be traced according to the old law.
(b) This case is famous for the judgment of Lord Macuaghten (on p. 667), which should be read by all students interested in the history of the law real property.
executed in the future by a proper conveyance, as distinct from an "executed trust," where the grantor has himself executed the conveyance in its final form. Hence we get the rule that -
The rule in Shelley's case does not apply to an executory trust.
Note. - An executory trust has nothing to do with the expression "an executory interest," and the rule does apply to an executory interest.