Merger - Definition - Law Dictionary Home Dictionary Definition merger

Definition :

Merger [fr. mergo, Lat., to sink], an annihilation, by act of law, of a particular in an expectant estate consequent upon their union in the same person without an intervening estate in another person--thus accelerating into possession the expectant which swallows up the particular estate. It is the drowning of one estate in another, and differs from suspension, which is but a partial extinguishment for a time; while extinguishment, properly so termed, is the destruction of a collateral thing in the subject itself out of which it is derived. 'In order that there may be a merger, the two estates which are supposed to coalesce must be vested in the same person at the same time and in the same right' [Re Radcliffe, (1892) 1 Ch 231, per Lindley, LJ]. An estate tail, however is an exception to the rule; for a man may have in his own right both an estate tail and a reversion in fee; and the estate tail, though a less estate, will not merge in the fee, 2 Bl. Com. 177.

The doctrine of merger probably results from the maxim, Nemo potest esse dominus et tenens; or perhaps from the inconsistency, but for it, of one person owning two estates in fact, whilst one of them, in law, includes the time or duration of both. 'Perhaps,' remarks Preston (3 Conv. 22), 'the rule that nemo potest esse dominus et tenens does not clearly, and beyond all controversy, furnish a principle to which the learning can be exclusively referred; yet of all other rules none affords principles to which the cases on merger bear a nearer affinity.'

When the same person has a legal estate in the fee, and is also entitled to the trust or beneficial ownership of that estate, the trust will merge in the legal ownership, but, on the other hand, the legal estate can never be extinguished in the equitable ownership.

Merger is either absolute or qualified, for an estate as against one person may be extinguished, whilst as against another it may still have existence.

Before the passing of the (English) Real Property Act, 1845 (8 & 9 Vict. c. 106) (repealed and reproduced by the (English) Law of Property Act, 1925, s. 139), the doctrine worked great hardship in cases where the immediate reversion on a lease was a leasehold term; leaseholds, however long their term, being considered an inferior or less estate than a freehold, e.g., if the leasehold reversion became merged in an estate for life or other freehold estate, any sub-lease was terminated, the rent of the sub-lease and all remedies for it were lost. The Act of 1845, s. 9, declared that when the reversion on a lease became merged, the next estate was to be deemed the reversion, if the surrender or merger took place after the 1st October, 1845. See also SEVERANCE and APPORTIONMENT.

In order to effect a merger, the following circumstances must concur:-

(1) There must of necessity be two estates atleast in the same property, or in the same part of the same property, which must vest in the same person.

Merger, however, will operate between three or more estates, as well as between two.

(2) The several estates must be immediately expectant upon each other; the more remote estate must be without any intervening vested estate or contingent remainder created in the same instant of time and by the same means which originated the other estate; and the determination or acquisition of an intermediate estate may be the cause of merger, as between estates kept distinct by means of such intermediate estate.

(3) The estate in reversion or remainder must be larger than the preceding estate, for there cannot be a merger as between equal estate of freehold.

Under s. 88 of the (English) Law of Property Act, 1925, a foreclosure by a mortgagee will merge the mortgage term into and vest the fee simple in the mortgagee subject to any prior mortgage term, and a similar consequence, mutatis mutandis, follows upon foreclosure of a leasehold term (ibid., s. 89).

By the (English) Law of Property Act, 1925, s. 185, reproducing the (English) Judicature Act,1873, s. 25 (4), it is provided that there shall not, after the commencement of that Act, be any merger by operation of law only of any estate the beneficial interest in which would not be deemed to be merged or extinguished inequity. In equity merger is, and always has been, a question of the intention of the parties, Capital, etc., Bank v. Rhodes, (1903) 1 Ch 652.

As to the merger of charges on property, the general rule is that if the benefit of the charge and the property subject to it vest in the same person, equity will treat the charge as kept alive or merged according to whether it be of advantage or of no advantage to the person in whom the two interests have vested that the charge should be kept alive, Manks v. Whiteley, (1911) 2 Ch 458, sub-title, Whiteley v. Delaney, 1914 AC 132; and see (English) Law of Property Act, 1925, s. 185, reproducing (English) Judicature Act, 1873, s. 25 (4); and also s. 116 of the (English) Law of Property Act, 1925, which enacts that, subject to the above rule in equity, a mortgage term when discharged by payment shall become a satisfied term and shall cease; and consult Coote on Mortgages, 8th Edn. pp. 1455 et seq.

When an engagement has been made by simple contract, and then the same engagement is made by deed, the simple contract is merged and extinguished in the deed. If an action is brought and judgment recovered, the right of action is said to be merged in the judgment, see Aman v. Southern Railway Co., (1926) 1 KB 59.

The merger of a misdemeanour in a felony is abolished by the (English) Criminal Procedure Act, 1851 (14 & 15 Vict. c. 100), s. 12, by which a prisoner tried for misdemeanour is not entitled to be acquitted of it if the facts proved amount in law to a felony.

Merger in law is defined as the absorption of a thing of lesser importance by a greater, whereby the lesser ceases to exist, but the greater is not increased; an absorption or swallowing up so as to involve a loss of identity and individuality. (See Corpus Juris Secundum, Vol. LVII, pp. 1067-1068), Kunhayammed v. State of Kerala, (2000) 6 SCC 359: AIR 2000 SC 2587 (2601). (Constitution of India, Article, 136)

Merger, at law is defined to be where a greater estate and a lesser coincide and meet in one and the same person, in one and the same right, without any intermediate estate, Words and Phrases, Permanent Edn., Vol. 27 at p. 124.

Merger, generally is defined as the absorption of a thing of less importance by a greater whereby the lesser ceases to exist but the grater is not increased, and rights are said to be merged when the same person who is bound to pay is also entitled to receive, Pacific States Savings & Loan Co. v. Strobeck, 33 P 2d 1063, 1066, 139 Cal App 427.

Merger, is the counter-part of surrender. Under a surrender the landlord acquires the lease, whereas merger is the consequence of the tenant retaining the lease and acquiring the reversion, or of a third party acquiring both lease and reversion. The principle is the same in both surrender and merger; the lease is absorbed by the reversion and destroyed.

For merger to be effective, the lease and the reversion must be vested in the same person in the same right with no vested estate intervening, Megarry's Manual of the Law of Real Property, 8th Edn.

Merger, means that where a lesser and a greater estate in the same land come together and vest, without any intermediate estate, in the same person and in the same right, the lesser is immediately annihilated by operation of law. It is said to be 'merged' that is, sunk or drowned, in the greater estate', Cheshiri and Burn's Modern Law of Real Property, 16th Edn., p. 993.