Court Opinion

ID: 9727439
Source: CourtListenerOpinion
Date Created: 2023-08-26 13:37:14.463674+00
Date Added: 2024-06-11T18:25:37.896167
License: Public Domain

Dissenting Opinion by
Me. Justice Musmanno:
Does the single word “appurtenances” in a mortgage of real estate include not only a brewery located thereon, but also more particularly the machinery necessary for the operation, of .the. brewery.? . This is the *472specific and objective question which was raised in this case.
On December 26, 1947, George F. Reichneder borrowed $30,000 from the First National Bank of Mt. Carmel, Pennsylvania, and tendered for security a mortgage on a certain piece of land described by metes and bounds with the accompanying phraseology: “Together with all and singular the hereditaments and appurtenances whatsoever unto the hereby granted premises belonging and in any wise appertaining, and the reversion and remainder, rents and issues, and profits thereto.”
Three years later Reichneder conveyed the property to Joseph R. Aimetti and on the same day, by bill of sale, sold separately to him the machinery, equipment and other chattels on the mortgaged premises.
Aimetti, who now became the terre-tenant, borrowed, on July 20, 1950, $6,000 from the Berwick National Bank and $25,300 from Dale C. Andres, giving them separate chattel mortgages on the brewery, in security for the loans.''
On April 9,1951, the First National Bank of Mount Carmel entered a judgment on the mortgage bond executed by Reichneder and issued a fieri facias thereon. The sheriff of Northumberland County levied on and sold at public sale the real estate and the machinery, equipment and other chattels, making up the brewery. Andres who had in the meantime become also the owner of the chattel mortgage held by the Berwick National Bank, objected to the sale of the brewery and when his objections were ignored and the sheriff’s sale consummated, filed a' petition for a rule to show cause why the sheriff’s sale: should not be set aside. After hearing on the petition and the answer, which was filed in behalf of the First National Bank of Mount Carmel, the lower court discharged the rule.
*473Andres appealed to this Court, and not without cause. Under the mortgage given by Reiehneder to the Mount Carmel Bank there was no warrant in law for the sale of the machinery, equipment and chattels contained in and essential for the purpose of manufacturing the product of the brewery. All that Reichneder mortgaged was the real estate with “hereditaments and appurtenances.” There is nothing in the facts of this case which justifies the classification of machinery used in the manufacture of beer as an hereditament or an appurtenance. The mortgage not only made no reference to a brewery but did not even mention buildings. When a conveyance of bare real estate carries the stereotyped phrase “hereditaments and appurtenances” the appurtenances usually refers to such easements and servitudes as custom and time may have imposed on the land.
The learned court below called the Reiehneder an industrial mortgage but the record does not support such a designation. The court also excluded the relevancy of the Chattel Mortgage Act of June 1, 1945, P. L. 1358, 21 PS 940, by saying: “While the Act may make some change in the mortgaging of chattels where the chattel mortgage is placed on machinery and equipment of an industrial plant in cases where there is no plant mortgage, nevertheless, where a real estate mortgage is already on an industrial plant, as a going concern, none of the ingredients of the plant necessary to make it a going industrial concern, may be mortgaged as a chattel.” (Italics supplied).
But this language presupposes what is not in the case at all, namely, that the Reiehneder mortgage is a plant mortgage. If a real estate mortgage is to cover everything on the land, the efficiency of the Chattel Mortgage Act is drastically reduced because it would then exclude from its provisions an undetermined per*474centage of real estate proprietors owning valuable personal property in no way connected with the use of the land on which it rests.
The majority of this Court approves the fallacious reasoning of the court below and by so doing, practically makes every mortgage of real estate an industrial mortgage, so long as it has a business upon it, no matter of what character. Thus, a peanut roaster modestly whistling its fragrant wares on an otherwise bare tract of land converts that land into industrial property and subjects everything else coming onto the land to the designation of industrial equipment.
The Majority Opinion quotes confidently from the classic opinion written by the celebrated Chief Justice Gibson in Voorhis v. Freeman, 2 W. & S. 116, but, unfortunately for the Majority Opinion, the Voorhis case is entirely different from the one at bar. The. mortgage in the Voorhis case specifically mentioned: “A lot or piece of ground with one iron rolling mill establishment situate thereon, with the buildings/apparatus, steam engine, boilers, bellows, etc., attached to the said establishment.” (Italics supplied)
The mortgage in the case before us makes, we repeat, no mention at all of a brewery, or even a building.
The Majority Opinion also quotes from Commonwealth Trust Company of Pittsburgh v. Harkins, 312 Pa. 402, but that ease is likewise clearly distinguishable, since the mortgage there involved contained the clause: “Together with all. and singular the buildings, improvements . . . hereditaments, and: appurtenances whatsoever thereunto', belonging.” . “Appurtenances” there obviously referred'to the'buildings and not the land alone. ' This was emphasized by this Court: “The mortgage, itself by its very, terms'.shows that it bound more than, "buildings and. land. - After 'describing the *475lot of ground by metes and bounds, it proceeds with the usual clause, ‘Together with all and singular the buildings, improvements . . . hereditaments and appurtenances whatsoever thereunto belonging.’ Building and appurtenances under the situation before us would include all machinery and fixtures going to make up the establishment as a completed plant:” Blaine v. Chambers, 1 S. & R. 169. (Italics supplied)
The mortgage in the case of Roos et al. v. Fairy Silk Mills, 334 Pa. 305, also cited by the Majority Opinion with approval, contained this description: “ ‘. . . all that certain two-story factory building and lot or lots of ground upon which the same is erected . . . Together with all and singular the buildings, rights, liberties, privileges, hereditaments and appurtenances to the same belonging, or in anywise appertaining, and the reversions, remainders, rents, issues and proñts thereof’.” In that case the Supreme Court said: “The words of the descriptive clause in the mortgage before us convey ‘all that two-story factory building and lot.’ This of itself gives notice of an ‘industrial mortgage.’ ”
Practically all the cases mentioned by the Majority Opinion are contradistinguished from the case at bar where the word “appurtenances” cannot possibly refer to any industrial establishment. The lower court goes so far as to say: “While there is no mention in the mortgage itself that the said mortgage is placed upon an industrial plant and while there is no mention of the machinery and equipment as such, nevertheless we conclude that the mortgage in this case is an industrial mortgage, the ordinary appurtenance clause of the said mortgage being sufficient to cover the machinery and equipment and supplies necessary to carry on the brewery in this case, as a going concern.” That this overreaches itself is demonstrated by the fact that within the word “appurtenances” the court below, as *476the majority here concede, erroneously included desks, chairs and typewriters, in addition to bottles, kegs, soakers and crowners. It even stretched the mortgage tent to cover five trucks on the assumption that since a brewery must have some means of transportation, the trucks therefore must have been included in the bank’s mortgage.
The Majority Opinion excludes the office furniture and the trucks from the operation of the mortgage, but does not exclude the bottles, kegs, soakers and crowners. The majority say that the trucks should be excluded because they travel outside the mortgaged premises, but so also do the bottles and the kegs. Once the principle of industrial mortgage is established in the sense intended by the majority, everything on the premises must be included. Who is to draw the line between the personalty that is mortgaged and the personalty that is not? If bottles are needed to contain the beer, and thus form an integral part of the manufacture of the beer, the trucks are equally needed to distribute the beer because without distribution the beer factory is of no consequence whatsoever. This arbitrary division between beer kegs and beer trucks is bound to cause much perplexity in future disputes of this kind. All of it unnecessary. The requirement that a mortgage, (in order for it to be regarded an industrial mortgage) must make some mention of the industry upon it, is not an unreasonable requirement.
Where real estate is involved the world has the right to rely on the documentary record which here in no way hinted, much less clearly revealed, that the real estate-mortgage covered a brewery with all its machinery, bottles and kegs.
Permitting parol evidence as to the intent of the original parties to a mortgage may radically alter a mortgage whose language is clear and thus impart *477sanction to what has always been severely reprobated by the law, namely, an unrecorded agreement or a secret lien. Anyone contemplating purchase of land has the right to be guided and assured by the record. The decision of the majority, if allowed unchecked and normal expansion, may well jeopardize the reliability of our recording system which safeguards titles to real estate. Diluvial chaos will result if deeds and mortgages recorded in the courthouses of the land are to have attached to them oral conditions and modifications enforcible after the rights of third parties without notice have intervened. It was to stave off that kind of disorder that the Statute of Frauds and other similar legislation erected barriers to preserve inviolate the provisions of contracts solemnly entered into and affirmed by sealed instruments.
Here there was no question of culpable deception or undue influence. The mortgage in question was prepared by counsel for the mortgagee. If the parties intended to include machinery, equipment and other personal property within the scope of the mortgagee’s security, it would have been a simple matter to so indicate. If it was the intention to make of this mortgage an industrial mortgage the most fundamental prudence would have dictated the inclusion, after description of the real estate, of some such phrase as “having erected thereon a brewery”. In that event it would not be necessary to place “appurtenances” on a Procrustean bed in order to stretch it to cover the meaning advanced by the appellee, and adopted by this Court.
The court below heard considerable testimony as to the circumstances surrounding the execution of the real estate mortgage and the chattel mortgages. The differences and contradictions as to what was really said were as marked as the different views expressed *478by witnesses to a traffic accident. The witnesses upholding the view of the Bank testified that it was understood the mortgage was to cover the brewery, the machinery and equipment. The chattel mortgage witnesses testified that it was understood the personal property on the land was free from any previous mortgage lien. The court weighed this evidence and concluded that “all of the articles included in the sheriff’s sale were included under the lien of the mortgage of the First National Bank of Mount Carmel and were all contained in the manufacturing establishment.” But the parol testimony, as between the parties to this suit, was irrelevant and inadmissible, and the conclusions, therefore, supererogatory. In the absence of evidence of fraud or mutual mistake the appellees were estopped, at least as against third parties, from denying the quite obvious and transparent meaning of the mortgage which they drew up and accepted.
If the principle enunciated in the majority opinion becomes law, and it will be law unless modified by statute or other decisions of this Court, this will mean that no title searcher can be certain of the nature of a mortgage unless he physically inspects the land involved. And, even after the inspection, he will still not be certain, because the mortgagor and mortgagee may have had an unrecorded oral agreement, which agreement in itself will be subject to all the interpretations, conclusions and nuances of meaning attendant upon rival appraisals of contested questions of fact. And all this is an invitation to uncertainty, costly litigation and disorganization in the world of real estate supposedly mapped out precisely with the latitude of reason and the longitude of pragmatic thought.
Mr. Justice Bell joins in this dissent.