Deed of Trust Exception to Merger of Title Doctrine?

  Under the doctrine of merger of title an owner of an estate in land cannot also hold an easement in the same land. This doctrine is codified in two statutes: 1) Civil Code section 805 which states: “A servitude thereon cannot be held by the owner of the servient tenement;” and 2) Civil Code section 811 which provides that a servitude is extinguished by the vesting of the right of the servitude and the right to the servient tenement in the same person.

  The rationale for these statutes is to avoid nonsensical easements where they are unnecessary because the owner owns the estate. However, despite the statutory language, the doctrine of merger is not applicable in every case. It is only applied to prevent injustice where it serves the interests of the person holding the two estates in absence of a contrary intent. It is not applied where it would result in injustice, injury, or prejudice to a third person. An agreement that there will not be a merger is generally enforced.

  In Hamilton Court, LLC v. East Olympic, L.P, a foreclosed deed of trust was the instrument which contained the agreement that prevented a merger. The deed of trust provided for a merger of title only “if such transfer is made subject to the Trustor’s promissory note and this Deed of Trust and does not affect the priority of this Deed of Trust in any manner whatsoever.”

  In finding no merger the court reasoned that if the easement in question was extinguished by operation of law the security interest of the beneficiary under the deed of trust would no longer attach to the easement because it no longer existed. This would run afoul of the agreement that the merger of title not affect the priority of the deed of trust.

  In his concurring opinion, Justice Mosk suggested that there is an equitable mortgage or deed of trust exception to the merger of title doctrine because preventing merger when the dominant tenement is encumbered by a mortgage or deed of trust at the time ownership of the servient and dominant tenement unite in the same entity preserves the security.

  I consult with clients and accept cases involving easements, boundary disputes, and priority issues between deeds of trusts. For other types of cases I accept, please consult the My Practice page. If you are seeking a legal consult or representation, please give me a call at 818.971.9409. – Michael Daymude

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