Chase Nat. Bank v. Richmond Cedar Works

NORTH COTT, Circuit Judge

(dissenting).

In view of the established rule that an after-acquired property clause in a mortgage must be strictly construed against the mortgagee, Cleveland Trust Company v. Consolidated Gas, E. L. & P. Co., 4 Cir., 55 F.2d 211, I cannot agree that the clause in the mortgage here can be construed as covering a, planing mill and lumber yard, not in existence when the mortgage was given, constructed on real estate expressly excluded from the mortgage and located three-quarters of a mile from the saw-mill and lumber yard of the mortgagor.

At the time of the execution of the mortgage no planing mill was owned or operated by the mortgagor and no mention is made of a planing mill in the mortgage. At that time the mortgagor corporation was engaged in -the manufacture of lumber and it had not found it necessary to finish its lumber in order to facilitate the sale of its product. There could have been no thought of including an after-erected planing mill in the mortgage. The lumber yard expressly covered by the mortgage was not in any way changed and still exists as it was when the mortgage was executed.

If the after-acquired property clause here is to be construed to cover the planing mill, erected to facilitate the marketing of the manufacturing company’s product, why would it not be a logical sequence, in the event it was deemed best in order to further facilitate such marketing, to erect a furniture manufacturing plant, to hold that the clause would cover the latter plant?

I am of the opinion that the court below was right in holding that the property in question is not appurtenant to or used in the operation of or in connection with any real property described in the mortgage. The decree of the court below should be affirmed.