If two estates in the same property shall unite in the same person in his individual capacity, the lesser estate shall be merged into the greater.
(Orig. Code 1863, § 2253; Code 1868, § 2245; Code 1873, § 2271; Code 1822, § 2271; Civil Code 1895, § 3106; Civil Code 1910, § 3682; Code 1933, § 85-710.)
Law reviews.- For article, "Descendible Future Interests in Georgia: The Effect of the Preference for Early Vesting," see 7 Ga. L. Rev. 443 (1973). For comment on Lathem v. Smith, 188 Ga. 472, 4 S.E.2d 27 (1939), see 2 Ga. B.J. 44 (1939).
JUDICIAL DECISIONSANALYSIS
General Consideration
Purpose of doctrine of merger.
- Doctrine of merger of estates is designed primarily for the benefit of one who acquires an interest in property greater than one possessed in the first instance, and will not be held to apply, against one's will, to one's disadvantage. Seaboard Air-Line Ry. v. Holliday, 165 Ga. 200, 140 S.E. 507 (1927); Pope v. Hammond, 168 Ga. 818, 149 S.E. 204 (1929); Landrum v. Carey, 185 Ga. 76, 194 S.E. 362 (1937); Gosnell v. Waldrip, 158 Ga. App. 685, 282 S.E.2d 168 (1981).
Merger incomplete without title.
- Because at the time the appellee executed the deed to the appellant the appellee had no title to the easement which the appellee attempted to convey to appellant, the appellant's claim of title by estoppel was completely without merit. Elrod v. Elrod, 272 Ga. 188, 526 S.E.2d 339 (2000).
Doctrine of merger has its foundation in the convenience of the parties interested; therefore whenever the rights of strangers, not parties to the act, that would otherwise work an extinguishment of the particular estate, require it, the two estates will still be considered as having a separate continuance. Fraser v. Martin, 195 Ga. 683, 25 S.E.2d 307 (1943).
Doctrine applies to rights other than rights in land.
- While in strict technical meaning, the doctrine of merger of estates appears to have been derived from the principles applicable to feudal tenures, and hence have relation only to estates in land, the term "merger" is applicable to rights other than rights in land. Bostwick v. Felder, 73 Ga. App. 118, 35 S.E.2d 783 (1945).
Doctrine of legal merger is now practically extinct both in England and the United States, equitable principles being generally applied by the courts of both countries. Pope v. Hammond, 168 Ga. 818, 149 S.E. 204 (1929).
Merged estate liable for debts.
- When the lesser estate was destroyed by merging in the greater, the limitations and restrictions thrown around the lesser as to its not being subject to levy and sale were also removed when it ceased to exist; having become an absolute estate or estate in fee, it is subject to the debts of the owner, just as other estates held in the same manner. Lowe v. Webb, 85 Ga. 731, 11 S.E. 845 (1890).
Cited in Marshall v. Dixon, 82 Ga. 435, 9 S.E. 167 (1889); Ferris v. Van Ingen & Co., 110 Ga. 102, 35 S.E. 347 (1900); Coleman & Burden Co. v. Rice, 115 Ga. 510, 42 S.E. 5 (1902); Thompson v. Sanders, 118 Ga. 928, 45 S.E. 715 (1903); Muscogee Mfg. Co. v. Eagle & Phenix Mills, 126 Ga. 210, 54 S.E. 1028, 7 L.R.A. (n.s.) 1139 (1906); Wellhouse v. Central Leases, Inc., 41 Ga. App. 731, 154 S.E. 708 (1930); Thomas v. Couch, 171 Ga. 602, 156 S.E. 206 (1930); Dodson v. Trust Co., 216 Ga. 499, 117 S.E.2d 331 (1960); Wallace v. City of Atlanta, 228 Ga. 166, 184 S.E.2d 576 (1971); Summers v. Allison, 127 Ga. App. 217, 193 S.E.2d 177 (1972); Tomkus v. Parker, 236 Ga. 478, 224 S.E.2d 353 (1976); Nash v. Miller, 212 Ga. App. 513, 441 S.E.2d 924 (1994); Legacy Cmtys. Group, Inc. v. Branch Banking & Trust Co., 310 Ga. App. 466, 713 S.E.2d 670 (2011), aff'd in part, rev'd in part, 290 Ga. 724, 723 S.E.2d 674, vacated in part, 316 Ga. App. 496, 729 S.E.2d 612 (2012).
Requirements for Merger
Necessity of being in same person.
- One estate cannot be merged in another unless both estates are owned by the same person in the same right. Pool v. Morris, 29 Ga. 374, 74 Am. Dec. 68 (1859); Seaboard Air-Line Ry. v. Holliday, 165 Ga. 200, 140 S.E. 507 (1927).
Doctrine of merger of estates rests upon actualities, not upon mere possibilities. Coincidence of two independent estates, presently held by one and the same person or class of persons, is a necessary prerequisite to merger. Luquire v. Lee, 121 Ga. 624, 49 S.E. 834 (1905).
No merger can take place until such identity of person and of present interest in point of fact exists. Luquire v. Lee, 121 Ga. 624, 49 S.E. 834 (1905); Seaboard Air-Line Ry. v. Holliday, 165 Ga. 200, 140 S.E. 507 (1927).
Absolute proprietary interest in at least one estate required.
- If there is to be a merger of two estates, the person in whom the two estates unite must have an absolute proprietary interest in at least one of the two separate estates. An example of such a merger as is intended by this statute would be where one owning in one's own right and individual capacity a remainderman's interest in certain property, secures the outstanding life estate in the same property, thereby merging the life estate, the lesser, in the remainderman's estate, the greater. Bostwick v. Felder, 73 Ga. App. 118, 35 S.E.2d 783 (1945) (see O.C.G.A. § 44-6-2).
Estates must be coextensive and commensurate.
- In order for legal and equitable estates to merge, the estates must be coextensive and commensurate. Seaboard Air-Line Ry. v. Holliday, 165 Ga. 200, 140 S.E. 507 (1927).
Fractional legal estates and fractional equitable estates cannot merge when fractions are not the same. An equitable undivided interest in an equity of redemption cannot merge with the legal fee. Seaboard Air-Line Ry. v. Holliday, 165 Ga. 200, 140 S.E. 507 (1927).
Intent of Parties
An intent not to merge will be presumed and will control. Gosnell v. Waldrip, 158 Ga. App. 685, 282 S.E.2d 168 (1981); Tompkins v. United States, 946 F.2d 817 (11th Cir. 1991).
Intent as affecting merger.
- Merger does not, in general, take place when the person in whom the two estates meet intends that it shall not take place. Knowles v. Lawton, 18 Ga. 476, 63 Am. Dec. 29, overruled on other grounds, Williams v. Terrell, 54 Ga. 462 (1855); Edmonds v. Beatie, 62 Ga. App. 246, 8 S.E.2d 559 (1940).
Intention of the holder of two estates in the same property that they shall not merge generally prevents merger. Landrum v. Carey, 185 Ga. 76, 194 S.E. 362 (1937).
When a property owner did not intend that a covenant merge when the owner acquired a larger estate, that intention controlled and the covenant did not merge. Desai v. OK Oil, Inc., 233 Ga. App. 855, 505 S.E.2d 271 (1998).
Intent is controlling consideration.
- Wherever a merger will operate inequitably, it will be prevented. The controlling consideration is the intention, express or implied, of the person in whom the estates unite, provided the intention is just and fair, and a merger will not be permitted contrary to such intent. Fraser v. Martin, 195 Ga. 683, 25 S.E.2d 307 (1943); Gosnell v. Waldrip, 158 Ga. App. 685, 282 S.E.2d 168 (1981).
Merger of estates does not occur if the result would extinguish a loan, contrary to the expectations and intentions of the parties. In re Gaites, 466 F. Supp. 248 (M.D. Ga. 1979).
Equity presumes intent consistent with party's best interests.
- If there is no expression of intention with respect to a merger, it will be sought for in all the circumstances of the transaction, and may be gathered not only from the acts and declarations of the owner of the several independent rights, but from a view of the situation as affecting one's interests, at least prior to the presence of some right in a third person. Equity will presume such an intent as is consistent with the best interests of the party. Fraser v. Martin, 195 Ga. 683, 25 S.E.2d 307 (1943).
Merger cannot be defeated by other parties.
- When it is manifest that the person in whom the two estates meet intends that the merger shall take place, it cannot be defeated by other parties. Wilder v. Holland, 102 Ga. 44, 29 S.E. 134 (1897); Muscogee Mfg. Co. v. Eagle & Phenix Mills, 126 Ga. 210, 54 S.E. 1028, 7 L.R.A. (n.s.) 1139 (1906).
Burden of proof that no merger was intended.
- If two estates in the same property united in the same person in the same capacity, and it is contended that no merger took place, the person making such contention, if entitled to do so, must allege and prove facts negativing the existence of such merger. Muscogee Mfg. Co. v. Eagle & Phenix Mills, 126 Ga. 210, 54 S.E. 1028, 7 L.R.A. (n.s.) 1139 (1906); Pitts Banking Co. v. Fenn, 160 Ga. 854, 129 S.E. 105 (1925); Franklin Mtg. Co. v. McDuffie, 43 Ga. App. 604, 159 S.E. 599 (1931).
When one person is the owner of different estates in the same land, the burden of showing that no merger took place is on the party asserting that a merger did not take place. Landrum v. Carey, 185 Ga. 76, 194 S.E. 362 (1937).
Question is one of fact.
- Question of intention on the part of a person acquiring both the equitable interest in land and the legal title thereto is one of fact. Franklin Mtg. Co. v. McDuffie, 43 Ga. App. 604, 159 S.E. 599 (1931).
Courts of Equity
Doctrine of merger is not favored.
- In equity the rules of law are not followed, and the doctrine of merger is not favored. Equity will prevent or permit a merger as will best subserve the purposes of justice and the actual and just intent of the parties, whether express or implied. Fraser v. Martin, 195 Ga. 683, 25 S.E.2d 307 (1943).
Court will act according to intent of parties.
- Since a court of equity is not bound by the legal rules of merger, it will prevent or permit a merger of estates according to the intent of the parties, either actually proved or implied from the fact that the merger would be against the interest of the party in whom the several estates or interests have united. Pope v. Hammond, 168 Ga. 818, 149 S.E. 204 (1929); Fraser v. Martin, 195 Ga. 683, 25 S.E.2d 307 (1943).
Whether a merger of estates occurs is governed by the intentions of the parties and principles of equity. In re Gaites, 466 F. Supp. 248 (M.D. Ga. 1979).
General rule at law is that the mortgage becomes merged in the deed, the latter conveying a greater estate than the mortgage; but in equity the lesser security is not merged in the greater when it appears that the holder of both intended that a merger should not take place. The intent controls. Ferris v. Van Ingen & Co., 110 Ga. 102, 35 S.E. 347 (1900); Pitts Banking Co. v. Fenn, 160 Ga. 854, 129 S.E. 105 (1925).
In equity there are exceptions to the rule propounded by law, one of which is that the lesser is not merged in the greater when it appears that the person in whom the two estates meet intends that it shall not take place. Fraser v. Martin, 195 Ga. 683, 25 S.E.2d 307 (1943).
Mortgages
Presumptively a mortgage is merged when the mortgagee takes from the mortgagor a warranty deed absolute in form to the mortgaged property. Furthermore, such a deed is presumptively one of bargain and sale. Pitts Banking Co. v. Fenn, 160 Ga. 854, 129 S.E. 105 (1925).
An absolute deed conveying land as security for a debt is a security of a higher nature than a mortgage for the same debt on the same premises, and when the mortgage is entered satisfied, and surrendered up because of the execution of such deed, the transaction operates as a novation and amounts to a merger. Pitts Banking Co. v. Fenn, 160 Ga. 854, 129 S.E. 105 (1925); Bostwick v. Felder, 73 Ga. App. 118, 35 S.E.2d 783 (1945).
Merger extinguishes mortgage.
- When the mortgagee purchases the mortgaged property from the mortgagor, the mortgage is extinguished by merger. Pitts Banking Co. v. Fenn, 160 Ga. 854, 129 S.E. 105 (1925).
When the mortgagee purchases the equity or redemption under a junior lien, the whole estate is vested in the mortgagee; and both the mortgage and the debt upon which it is founded are extinguished, unless the actual value of the mortgaged property is ascertained by foreclosure and sale, or express stipulation between the parties. Pitts Banking Co. v. Fenn, 160 Ga. 854, 129 S.E. 105 (1925); Franklin Mtg. Co. v. McDuffie, 43 Ga. App. 604, 159 S.E. 599 (1931); Wrenn v. Massell Inv. Co., 56 Ga. App. 802, 194 S.E. 263 (1937).
Interest under first mortgage is merged into title of purchaser. Bank of Stephens v. Growers Fin. Corp., 168 Ga. 108, 147 S.E. 113 (1929).
If the owner of the equitable or beneficial interest in land acquires the outstanding legal title, conveyed by one's predecessor in title to a third person to secure a debt, the equitable interest and the legal title become merged, and the debt for which the legal title was held as security is extinguished, unless there is an agreement to the contrary, or it is the manifest intention of the party in whom such equitable and legal estate unite that there should be no merger. Franklin Mtg. Co. v. McDuffie, 43 Ga. App. 604, 159 S.E. 599 (1931).
Intent not to merge.
- If the holder of a security deed subsequently receives a warranty deed subject to the loan evidenced by the security deed to the land conveyed in the former deed, but does not surrender or cancel the note or the deed securing the note, a merger of the two estates being against the interest of such holder, and inequitable, and there being no evidence of an intent upon one's part to effect a merger, an intent not to merge will be presumed, and a court of equity will decree that no merger was effected. Fraser v. Martin, 195 Ga. 683, 25 S.E.2d 307 (1943).
Effect of such intent.
- When the mortgagee became the purchaser of the equity of redemption in the two halves of the mortgaged lot of land, and the facts were such as to require the presumption that the purchaser intended the equity of redemption in one of the halves to merge; but the equity of redemption in the other not to merge, the decision was that as to the first mentioned half, there was a merger; and as to the other half, none. Jackson v. Tift, 15 Ga. 557 (1854).
Holder of security interests from different debts.
- Merger of estates in one holding only security interests in the property as the result of two different debts has never been permitted. Bostwick v. Felder, 73 Ga. App. 118, 35 S.E.2d 783 (1945).
No merger of judgment lien and subsequent security interest.
- When a judgment creditor accepted a bill of sale as security for a second loan (the judgment being on the first loan) which the creditor had made to the debtor, and obtained thereby only a security interest in the property covered by the bill of sale, such security interest being subject to the prior judgment lien in the absence of any stipulation to the contrary, the security interest instead of being in itself a proprietary interest in the property, is but incidental to the ownership of the debt secured, and so long as that debt retains its identity the security will also retain a distinct identity, and no merger of the lien in the bill of sale occurred. Bostwick v. Felder, 73 Ga. App. 118, 35 S.E.2d 783 (1945).
Security title does not merge with subsequent title subject to a life estate, acquired by deed. Drake v. Barrs, 225 Ga. 597, 170 S.E.2d 684 (1969).
Illustrative Cases
Single trustee who is sole beneficiary.
- If there is but a single trustee who is also the sole beneficiary, merger of legal and equitable interests results. Smith v. Francis, 221 Ga. 260, 144 S.E.2d 439 (1965).
Plural trustees, one of whom is sole beneficiary.
- When there are plural trustees, one of whom is the sole beneficiary, there is no merger and the trust is valid. Smith v. Francis, 221 Ga. 260, 144 S.E.2d 439 (1965).
Two life estates for two separate persons.
- Two life estates in the same property being for the lives of two separate persons cannot merge as one life estate within the meaning of this statute. McDaniel v. Bagby, 204 Ga. 750, 51 S.E.2d 805 (1949) (see O.C.G.A. § 44-6-2).
Debt secured by two parcels of property was not extinguished prior to foreclosure under the doctrine of merger of estates by the voluntary surrender of one of the parcels of property. Reeves v. Sanderlin Agric. Servs., 249 Ga. App. 882, 549 S.E.2d 837 (2001).
Intervening judgment lien.
- There is no merger by a security deed holder taking a quitclaim deed and transfer of tax executions after judgment lien has intervened. Pope v. Hammond, 168 Ga. 818, 149 S.E. 204 (1929).
Merger of homestead and reversionary interest.
- When the sole beneficiary of a homestead estate acquires an absolute title to the reversionary interest in the property out of which the homestead estate was carved, and it does not appear that it was the intention of such beneficiary to keep the two estates separate, the lesser, or homestead estate, would become merged in the absolute estate, and the property would be subject to the payment of the debts of the person in whom the two estates united. Goodell v. Hall, 112 Ga. 435, 37 S.E. 725 (1900); Pitts Banking Co. v. Fenn, 160 Ga. 854, 129 S.E. 105 (1925).
Merger of life estate, power of disposition, and reversion.
- When one had vested in oneself a life estate annexed to which was a power of disposition by will, which was derived from the will of one's grandfather, and one had also vested in one the reversion which was undisposed of by one's grandfather's will; the life estate, coupled with the power, became merged into the greater estate, that is, the fee represented by the reversion. Wilder v. Holland, 102 Ga. 44, 29 S.E. 134 (1897).
Merger of life estate and absolute fee.
- Merger of estates occurs if two or more persons having, as tenants in common, a life estate in realty, acquire in common the absolute fee thereto. Lowe v. Webb, 85 Ga. 731, 11 S.E. 845 (1890); Stringfellow v. Stringfellow, 112 Ga. 494, 37 S.E. 767 (1900); Bardwell & Co. v. Edwards, 117 Ga. 824, 45 S.E. 40 (1903); Luquire v. Lee, 121 Ga. 624, 49 S.E. 834 (1905).
When the possible remaindermen hold a life estate together with X, but the remainder is limited to those only who survive X, the uncertainty of knowing who will actually survive would alone prevent the merger of the estates. Luquire v. Lee, 121 Ga. 624, 49 S.E. 834 (1905).
Merger of life estate and year's support.
- Having a life estate in the use of the property by reason of the homestead, and having afterwards acquired an absolute estate in the same property by reason of its being set apart to the wife as a year's support, the life estate, being the lesser, is merged in the absolute estate. Lowe v. Webb, 85 Ga. 731, 11 S.E. 845 (1890).
Equitable title of decedent and year's support were merged into an absolute estate by deed to the widow and children. Hines v. Moore, 168 Ga. 451, 148 S.E. 162 (1929).
Merger of easement upon union of dominant and servient estates.
- When there is a union of an absolute title to and possession of the dominant and servient estates in the same person, it operates to extinguish any such easement absolutely and forever for the single reason that no man can have an easement in one's own land. Muscogee Mfg. Co. v. Eagle & Phenix Mills, 126 Ga. 210, 54 S.E. 1028, 7 L.R.A. (n.s.) 1139 (1906).
Merger doctrine operated to extinguish a purported perpetual easement. Because one could not have an easement in one's own land, a common grantor's attempt to create an easement across one portion of the grantor's property for the benefit of another portion while the grantor still owned both was ineffective, and the purported easement was invalid. Gilbert v. Fine, 288 Ga. App. 20, 653 S.E.2d 775 (2007), cert. denied, 2008 Ga. LEXIS 232 (Ga. 2008).
Merger in class.
- It is doubtless true that if the entire interest in a life estate is held by a class of persons, under a deed or will which does not provide for survivorship, and subsequently the estate in remainder is vested in all of the members of this class, as tenants in common, by inheritance or otherwise, the life estate becomes merged into the greater estate which they acquire. But if it is vested in a lesser number than the whole, they do not merge. Luquire v. Lee, 121 Ga. 624, 49 S.E. 834 (1905).
Merger of water rights with estates.
- When four persons formed a water company, there was no legislative restriction preventing a merger of rights running in favor of some of the lots purchased for the benefit of others, when all became the property of one person, although before the incorporation. Muscogee Mfg. Co. v. Eagle & Phenix Mills, 126 Ga. 210, 54 S.E. 1028, 7 L.R.A. (n.s.) 1139 (1906).
When lessee has only right of possession and use of the leased premises, not a proprietary interest therein, there is no "merger of estates" when the lessee purchases the subject property. Life Chiropractic College, Inc. v. Carter & Assocs., 168 Ga. App. 38, 308 S.E.2d 4 (1983).
Equitable exception to merger doctrine did not apply.
- Equitable exception to the merger doctrine did not apply. Whether merger operated against the interest of the common grantor was irrelevant, as the common grantor was not a party to the action and was not harmed by the trial court's ruling; furthermore, it would be inequitable to find that the plaintiffs' property was subject to an easement for the defendants' benefit when the deed from the common grantor to the plaintiffs did not mention such an easement. Gilbert v. Fine, 288 Ga. App. 20, 653 S.E.2d 775 (2007), cert. denied, 2008 Ga. LEXIS 232 (Ga. 2008).