Any mortgagee of, or person having a charge upon, immovable property, or any transferee from such mortgagee or charge-holder, may purchase or otherwise acquire the rights in the property of the mortgagor or owner, as the case may be, without thereby causing the mortgage or charge to be merged as between himself and any other mortgagee or charge-holder upon the same property;
and no such other mortgagee or charge-holder shall be entitled to foreclose or sell such property without redeeming the prior mortgage or charge, or contributing to the payment of the same.
Legal Commentary & Landmark Judgments: Section 101
Section 101 codifies the rule against merger in case of subsequent encumbrance, establishing that any mortgagee or charge-holder acquiring the equity of redemption does not extinguish the mortgage unless merger is clearly intended or for their benefit.
When a bank acquires mortgaged property through settlement, recite in the conveyance that the mortgage is expressly preserved as a shield under Section 101 against intervening encumbrances.