LEGAL PRINCIPLE: EQUITY AND TRUSTS — Merger — Mortgages — Deeds of Same Nature Not Merged by Further Advances
PRINCIPLE STATEMENT
Deeds of mortgage are securities of the same nature. Further advances do not cause merger unless intended. Exhibits D1 and 5 complement the original mortgage in regard to the amount secured.
RATIO DECIDENDI (SOURCE)
Per Uwaifo, JSC, in Owoniboys Tech. Services Ltd v. Union Bank of Nig. Ltd (2003) NLC-1681999(SC) at p. 33; Paras A–C.
"In the present case, there was no question of the principle of merger operating because all the said exhibits 4, D1 and 5 are deeds of mortgage which are securities of the same nature in legal valuation. They were not intended to merge in the sense that takes place between a lower and higher legal securities except that it is necessary to say that exhibits D1 and 5 complement exhibit 4 in regard to the amount of money secured."
EXPLANATION / SCOPE
Mortgages of the same nature do not merge by further advances. The principle applies to equity and trusts. Merger requires intention. The rule preserves multiple securities. The court will examine the documents. The principle is well-established.
