Branch Branking & Trust Co. v. Home Federal Savings & Loan Ass'n of Eastern North Carolina

COZORT, Judge.

In this appeal we consider whether the mortgage estate on land held in trust by a first lienholder merged with the fee simple estate obtained by the lienholder when it accepted and recorded a deed from the mortgagor conveying the encumbered land to the lienholder, thus allowing a junior lienholder to obtain clear title to the land by purchasing it at a sheriffs sale. We hold the doctrine of merger does not apply in this case and that the junior lienholder’s title is subject to the first lienholder’s deed of trust. Relevant facts and procedure follow:

On 24 November 1980, George…