I think judgment should be directed for the defendant. The coal company bought the property of the improvement company, subject to the existing mortgage. That mortgage provided that a sinking fund should be maintained from which $12,000 per annum of the bonded indebtedness should be paid. The property was mining property the value of which was diminished as the product was removed. The sinking fund provision was what might be termed an automatic scheme for the payment' and redemption of a certain number of bonds yearly. The plaintiff now demands that a new *544bond be issued for one that has been redeemed, paid, satisfied and canceled.
It seems to me the defendant would be violating its duty in sanctioning such an issue. It is no answer to say that 252 bonds of the $3,000,000 issue provided for in plaintiff’s mortgage were reserved for the purpose of taking up a prior mortgage.. A fair interpretation of that provision is that if the plaintiff obtained outside money and paid the prior bonds it should then have the right to have issued a corresponding amount to take their place.
It was not intended that new bonds should be issued as fast as the prior bonds were automatically paid through depletion of the mines of the improvement company. Such a course diminishes the security of the holders of the second bonds, for when the value of the mines of the improvement company has been sufficiently diminished by the sinking fund provision to pay off a bond a new one is placed on the diminished property.
While the holder of a second bond gets the benefit of ■ the satisfaction of a prior one, he is compelled to share his lien with a new and substituted bond. This could not have been the intention of the parties and is not a fair interpretation of the agreement.
I vote, therefore, that judgment be rendered for defendant.
Judgment ordered for plaintiff as directed in opinion. Settle order on notice.