Present: Carrico, C.J., Compton, 1 Lacy, Hassell, Keenan,
Koontz, and Kinser, JJ.

KATHERINE FITZGERALD SHIRLEY

v. Record No. 990611  OPINION BY JUSTICE CYNTHIA D. KINSER
                                     March 3, 2000
KATHERINE GRAY SHIRLEY, ET AL.

         FROM THE CIRCUIT COURT OF ALBEMARLE COUNTY
                Paul M. Peatross, Jr., Judge


     In this appeal, we address the common law rule that,

in a deed, a reservation or exception in favor of a

stranger to the instrument does not create in the stranger

any right or interest in the property being conveyed.   The

circuit court relied on this rule to sustain demurrers to a

bill of complaint seeking a declaratory judgment that a

reservation in favor of a stranger to a deed created a life

estate for the benefit of the stranger.    Since this rule is

applicable in the Commonwealth pursuant to Code § 1-10, and

because we conclude that any modification of the rule falls

within the province of the General Assembly, we will affirm

the circuit court’s judgment.

                   FACTS AND PROCEEDINGS




______________________
     1
       Justice Compton participated in the hearing and
decision of this case prior to the effective date of his
retirement on February 2, 2000.
     Katherine Gray Shirley (Mrs. Shirley) conveyed a

certain tract of real property near Greenwood (the

Greenwood property) in Albemarle County to her daughters,

Martha Gray Shirley Bates and Katherine Fitzgerald Shirley

(Katherine), in their capacities as “Trustees of ‘The

Fairview Trust.’”   That deed, dated May 15, 1990, contained

the following provision that is the subject of this appeal:

“The party of the first part [Mrs. Shirley] reserves unto

herself a life estate for herself and a life estate for the

benefit of Katherine Fitzgerald Shirley, in and to said

real property.”

     Several years later, Bates, in her capacity as

“Trustee of ‘The Fairview Trust,’” conveyed her interest in

the Greenwood Property to Mrs. Shirley, in her capacity as

“Trustee of The Katherine Gray Shirley Trust.” 2

Subsequently, on May 28, 1998, Mrs. Shirley and Bates,

individually and in their capacities as trustee and

successor trustee, respectively, of “the Katherine Gray

Shirley Trust,” conveyed their interests in the subject

______________________
     2
       At the end of that deed, Mrs. Shirley signed a
statement in which she certified that “it was not her
intent to create a life estate in Katherine Fitzgerald
Shirley in said deed dated May 15, 1990, but solely to
permit Katherine [Fitzgerald] Shirley to reside with the
undersigned [Mrs. Shirley] during the life estate reserved
unto herself [Mrs. Shirley].”



                              2
property to Mrs. Shirley, individually.    On the same day,

Mrs. Shirley executed a deed of trust on the property to

secure payment of a note signed by her.    Mary-Susan Payne

was the trustee named in the deed of trust, and Western

Financial Bank (Western) was the beneficiary.

        In July 1998, Katherine filed a bill of complaint

against Mrs. Shirley, Western, and Payne in the circuit

court, seeking a declaratory judgment that Katherine has a

life estate in the property, superior to the lien of

Western’s deed of trust.    All three defendants filed

demurrers to the bill of complaint.    In a memorandum in

support of her demurrer, Mrs. Shirley asserted that

Katherine was not a party to the May 15, 1990 deed, and

that there were “no words of [g]rant” to Katherine in that

deed.    Western and Payne contended there was no actual

controversy between them and Katherine, and that therefore

a declaratory judgment action was improper.

        After considering the parties’ memoranda and hearing

argument ore tenus, the chancellor entered an order

sustaining the defendants’ demurrers and dismissing the

bill of complaint.    In a letter opinion, the chancellor

first concluded that Katherine properly brought an action


____________________




                                3
for declaratory judgment.   The chancellor then examined the

common law rule that “in a deed neither [a] reservation nor

an exception in favor of a stranger to the instrument can,

by force of ordinary words of exception or reservation,

create in the stranger any title, right, or interest in or

respecting the land conveyed.”     Although Katherine admitted

that Virginia incorporates the common law of England

pursuant to Code § 1-10, 3 she urged the chancellor to modify

or abrogate this common law rule.      However, the chancellor

declined to do so, holding that modification of the common

law rule against reservations in favor of a stranger to a

deed lies within the province of the General Assembly, not

the judiciary.   We awarded Katherine this appeal.

                            ANALYSIS

     On appeal, Katherine acknowledges that, under the

common law, a grantor could not reserve an interest in real

property for the benefit of a stranger to the deed.     Nor

does she dispute that the common law of England has been

adopted in Virginia pursuant to Code § 1-10.     However, she

asks this Court to abrogate or modify this common law rule

______________________
     3
       Code § 1-10 provides that “[t]he common law of
England, insofar as it is not repugnant to the principles
of the Bill of Rights and Constitution of this
Commonwealth, shall continue in full force within the same,




                               4
for three reasons.   Katherine first asserts that the rule

is at odds with the modern trend in property law to give

effect to a grantor’s intent, and that, in this case, the

rule frustrates Mrs. Shirley’s intent to grant Katherine a

life estate in the subject property.   Next, Katherine

contends that numerous courts in other jurisdictions have

rejected the rule and thus urges this Court to do so.

Finally, she posits that the common law rule is

inconsistent with the General Assembly’s intent reflected

in Code § 55-22 to protect third-party beneficiaries of

written instruments.

     As Katherine asserts, this Court has repeatedly held

that a deed should be construed to give effect to the

grantor’s intent.    Auerbach v. County of Hanover, 252 Va.

410, 414, 478 S.E.2d 100, 102 (1996); Allen v. Green, 229

Va. 588, 593, 331 S.E.2d 472, 475 (1985); Austin v.

Dobbins, 219 Va. 930, 936, 252 S.E.2d 588, 592 (1979);

Fitzgerald v. Fitzgerald, 194 Va. 925, 929, 76 S.E.2d 204,

207 (1953); Albert v. Holt, 137 Va. 5, 9, 119 S.E. 120, 122

(1923).   However, the grantor’s intention cannot prevail if

it is “in conflict with some principle of law or rule of

property.”   Fitzgerald, 194 Va. at 929, 76 S.E.2d at 207;

____________________
and be the rule of decision, except as altered by the



                               5
accord Auerbach, 252 Va. at 414, 478 S.E.2d at 102; Albert,

137 Va. at 9, 119 S.E. at 122.

     The common law rule of property at issue in this

appeal provides that “a reservation, to be good, must be

made to all, some, or one of the grantors, and not to a

stranger to the deed.”    Wickham v. Hawker, 151 Eng. Rep.

679, 683 (1840). 4   A reservation is “[t]he creation of a new

right or interest . . . by and for the grantor, in real

property being granted to another.”    Black’s Law Dictionary

1309 (7th ed. 1999). 5   At common law, words of “reservation”

were not deemed to be words of “grant.”    Nelson v. Parker,

687 N.E.2d 187, 188 (Ind. 1997); cf. Lim v. Choi, 256 Va.


____________________
General Assembly.”
     4
       This common law rule is sometimes referred to as the
“stranger rule.” 9 Thompson on Real Property § 82.09(c)(2)
(David A. Thomas ed., 2d Thomas ed. 1999).

       Pursuant to a statute enacted in 1925, England
changed the “stranger rule.” Now, “a reservation of a
legal estate” vests the interest being conveyed in the
person designated whether that person is the grantor or
not. Halsbury’s Laws of England ¶ 1531 (Current Serv.
Binder 2, Additional Materials/Deeds at p. 134 (1999))
(citing Law of Property Act, 1925, 15 & 16 Geo. 5, ch. 20,
§§ 65(1), (3) (Eng.)).
     5
       In contrast to a “reservation,” an “exception”
excludes or withdraws a pre-existing right from the
property conveyed that would otherwise pass to the grantee.
Terry v. Tinsley, 140 Va. 240, 246, 124 S.E. 290, 292
(1924). Frequently, the words “reserved” and “excepted”
are used interchangeably. Id.



                               6
167, 171-72, 501 S.E.2d 141, 143-44 (1998) (discussing

necessity for words of grant or conveyance in deed).     Thus,

a grantor’s words of reservation could create a property

interest in favor of the grantor but not in favor of a

third person, or “stranger,” to the deed.

     Assuming, without deciding, that Mrs. Shirley intended

to convey a life estate in the subject property to

Katherine in the 1990 deed, Mrs. Shirley’s method of

conveyance conflicts with the common law rule and thus

cannot prevail.   See Fitzgerald, 194 Va. at 929, 76 S.E.2d

at 207.   Katherine was a “stranger” to the 1990 deed.

Therefore, Mrs. Shirley’s words of reservation did not

convey an interest in the property to Katherine.

     As the parties acknowledge, this Court has not

previously addressed the “stranger rule” and its

applicability in Virginia. 6   However, pursuant to Code § 1-


______________________
     6
       To the extent that Katherine relies on this Court’s
decision in McGrue v. Brownfield, 202 Va. 418, 117 S.E.2d
701 (1961), to suggest that we have previously considered
and/or abrogated this common law rule, such reliance is
misplaced. Although the property interest at issue in that
case was a life estate reserved by a grantor for herself
and her son, the questions presented on appeal concerned
only the mental capacity of the grantor and whether
adequate consideration was given for the conveyance. The
validity of the reservation was not challenged.

     Similarly, in Austin, 219 Va. at 936, 252 S.E.2d at
591-92, the grantor conveyed a life estate in real property



                               7
10, we conclude that the rule continues “in full force” in

this Commonwealth and is “the rule of decision.”    Code § 1-

10.   It is not “repugnant to the principles of the Bill of

Rights and the Constitution,” and has not been “altered by

the General Assembly.”   Id.

      We have, however, recognized that while Code § 1-10,

“aside from its express limitations, appears to adopt

English common law ‘generally, and without a

qualification,’ this is not in fact the case.”     Weishaupt

v. Commonwealth, 227 Va. 389, 399, 315 S.E.2d 847, 852

(1984) (quoting Foster v. Commonwealth, 96 Va. 306, 309, 31

S.E. 503, 504 (1898)).   Accordingly, we stated the

following principle with regard to the adoption of the

English common law in this Commonwealth:

      Such of [English common law] doctrines and principles
      as are repugnant to the nature and character of our
      political system, or which the different and varied
      circumstances of our country render inapplicable to
____________________
to her son and, in the same deed, provided that her
grandson “shall have the right to live in the residence”
during his life. Again, the “stranger rule” was not an
issue on appeal.

     However, in Lee v. Bumgardner, 86 Va. 315, 10 S.E. 3
(1889), the common law rule at issue today was implicated.
In that case, this Court held that when a deed reserved the
right to raise ore to the owners of a certain furnace, not
parties to the deed, the right to raise the ore remained in
the grantor until the grantor subsequently conveyed the
right to the owners of the furnace by a separate
instrument.



                               8
     us, are either not in force here, or must be so
     modified in their application as to adapt them to our
     condition.

Foster, 96 Va. at 310, 31 S.E. at 505.

     Using this principle, this Court has abrogated or

modified English common law in only a few instances.      E.g.,

Weishaupt, 227 Va. at 404, 315 S.E.2d at 855 (abolishing

husband’s immunity from prosecution for rape of wife that

occurred when husband and wife were separated but not yet

divorced); Surratt, Adm’r v. Thompson, 212 Va. 191, 193-94,

183 S.E.2d 200, 202 (1971) (abolishing interspousal

immunity in automobile torts); Smith v. Kauffman, Adm’r,

212 Va. 181, 186, 183 S.E.2d 190, 194 (1971) (abolishing

parental immunity in automobile accident cases); Midkiff v.

Midkiff, 201 Va. 829, 833, 113 S.E.2d 875, 878 (1960)

(abolishing immunity in automobile accident case between

two unemancipated brothers).   Unlike the situations

addressed in those cases in which we recognized changes in

familial relationships, we find nothing in the nature,

character, and circumstances of either our political system

or country that vitiates the underlying reason for the

common law “stranger rule.”    Instead, modification or

abrogation of that rule by this Court would adversely

impact the public policy favoring certainty of title to

real property.


                               9
     Therefore, “we will apply the law as it now exists,

because we believe that a decision whether to abrogate such

a fundamental rule as the one under consideration is the

function of the legislative, not judicial, branch of

government.”   Williamson v. The Old Brogue, Inc., 232 Va.

350, 354, 350 S.E.2d 621, 624 (1986). 7   This is particularly

so when, as here, any change in the common law rule would

affect not only inchoate but also vested property rights.

If, at times, application of the common law rule at issue

frustrates a grantor’s intent, as Katherine argues it does

in this case, such frustration could be alleviated if the

grantor directly conveys the desired property interest to

the third party before conveying the fee, subject to the

already existing interest in the third party.

Alternatively, the grantor could reserve the interest to




______________________
     7
       Other jurisdictions likewise adhere to the common law
rule at issue in this appeal. E.g., Estate of Thomson v.
Wade, 509 N.E.2d 309, 310 (N.Y. 1987); In re Condemnation
by County of Allegeny of Certain Coal, Oil, Gas, Limestone
and Mineral Properties, 719 A.2d 1, 3 (Pa. Commw. Ct.
1998); Tallarico v. Brett, 400 A.2d 959, 964 (Vt. 1979);
Pitman v. Sweeney, 661 P.2d 153, 154 (Wash. Ct. App. 1983);
Jolynne Corp. v. Michels, 446 S.E.2d 494, 502 (W. Va.
1994); but see Auzmus v. Nelson, 743 P.2d 377, 380 (Alaska
1987); Willard v. First Church of Christ, Scientist,
Pacifica, 498 P.2d 987, 991 (Cal. 1972); Nelson v. Parker,
687 N.E.2d at 190; Townsend v. Cable, 378 S.W.2d 806, 808
(Ky. 1964).



                              10
the grantor, and then convey the reserved interest to the

third party.   See Nelson v. Parker, 687 N.E.2d at 189. 8

     For these reasons, we will affirm the judgment of the

circuit court. 9

                                                     Affirmed.




______________________
     8
       Mrs. Shirley could also have named Katherine as a
grantee in the 1990 deed and used words of grant to convey
a life estate to Katherine. Obviously, in that situation,
Katherine would not have been a “stranger” to the deed.
     9
       We will not address Katherine’s argument with regard
to Code § 55-22 because she did not present that argument
before the chancellor. See Rule 5:25; Morgen Indus., Inc.
v. Vaughan, 252 Va. 60, 67-68, 471 S.E.2d 489, 493-94
(1996).



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