Reference Doc: https://git.kernel.org/cgit/linux/kernel/git/stable/linux-stable.git/tree/Documentation/filesystems/overlayfs.txt?id=refs/tags/v3.19
Ubuntu 14.04.3 LTS
uname -r: 3.19.0-30-generic
Reference Doc Mentions: "The lower filesystem can even be another overlayfs."... How?

My Example:
$ mkdir lower1 upper1 upper2 work1 work2 merged1 merged2
$ echo a > lower1/a.txt
$ echo b > upper1/b.txt
$ echo c > upper2/c.txt
$ sudo mount -t overlay overlay1 -olowerdir=./lower1,upperdir=./upper1,workdir=./work1 ./merged1
$ sudo mount -t overlay overlay2 -olowerdir=./merged1,upperdir=./upper2,workdir=./work2 ./merged2

$ ls merged2/
a.txt  b.txt  c.txt
$ cat merged2/a.txt 
cat: merged2/a.txt: No such device or address
$ cat merged2/b.txt 
cat: merged2/b.txt: No such device or address
$ cat merged2/c.txt 
c
$ ls merged2/
a.txt  b.txt
$ cat merged1/a.txt 
a
$ cat merged1/b.txt 
b