Opinion ID: 1352228
Heading Depth: 3
Heading Rank: 1

Heading: Merger of Estates

Text: As Dynamic has noted, the facts in this case provide the basis for two merger arguments. The first is the theory of merger of estates. Generally, when one person obtains both a greater and a lesser interest in the same property, and no intermediate interest exists in another person, a merger occurs and the lesser interest is extinguished. 3 R. POWELL, THE LAW OF REAL PROPERTY § 459 (1990 Rev.). Thus, merger may occur when a mortgagee's interest and the fee title are owned by the same person. Id. The potential for merger arises whenever a mortgagee acquires the mortgagor's equity of redemption. However, even if a merger would otherwise occur at law, contrary intent or equitable considerations may preclude this result under appropriate circumstances. 2 L. JONES, THE LAW OF MORTGAGES § 1080 (8th ed. 1928). This court has long recognized these general rules of merger of estates. Bowman v. Cook, 101 Ariz. 366, 419 P.2d 723 (1966); Hathaway v. Neal, 31 Ariz. 155, 251 P. 173 (1926). We assume, therefore, no one arguing to the contrary, that when Mid Kansas acquired title on the foreclosure of its second lien, its rights under that lien were merged in the title. See Bowman, 101 Ariz. at 367, 419 P.2d at 724. The question before us, however, is somewhat different. Today we must consider if Mid Kansas's rights under the first lien were affected when it acquired title by foreclosure on its second lien.