Ferrante Equipment Co. v. Foley Machinery Co.
| Decision Date | 05 July 1967 |
| Docket Number | No. A--137,A--137 |
| Citation | 49 N.J. 432,231 A.2d 208 |
| Parties | , 4 UCC Rep.Serv. 513 FERRANTE EQUIPMENT COMPANY, a New Jersey corporation, Plaintiff-Appellant, v. FOLEY MACHINERY CO., a New Jersey corporation, Defendant-Respondent. |
| Court | New Jersey Supreme Court |
Peter W. Mitchell, Bernardsville, for plaintiff-appellant (Stern, Mitchell & Belson, Bernardsville, attorneys; Peter W. Mitchell, Bernardsville, on the brief).
Sidney Krieger, Newark, for defendant-respondent.
The opinion of the court was delivered by
The issue in this case is which of two lien holders has priority in a bulldozer.
The machine involved is self-propelled by a diesel engine. It does not have rubber tires but operates on two treads attached to the machine. It is an 'off-the-road' piece of equipment used for general excavation and land clearance.
Ultimately, this decision rests upon whether this machine is a 'motor vehicle' within the contemplation of the Garage Keepers and Automobile Repairmen Lien Act, N.J.S. 2A:44-20 et seq., N.J.S.A.
On April 27, 1964 Richard Heckle purchased the bulldozer from plaintiff, Ferrante Equipment Company, pursuant to a conditional sales contract. In order to perfect its lien, plaintiff filed a financing statement in the office of the Secretary of State, pursuant to N.J.S. 12A:9--401, N.J.S.A. Heckle made monthly payments to plaintiff until May 1965, when he defaulted in his payments. On June 8, 1965 Heckle brought the bulldozer to defendant, Foley Machine Company (Foley), to have the machine repaired. The repairs were completed, but the bill was not paid. On July 6, 1965 plaintiff demanded possession of the bulldozer, which was still in the possession of defendant, claiming that plaintiff had a lien on the bulldozer because Heckle had defaulted in his payments on the conditional sales contract. Defendant refused to give up possession of the bulldozer, claiming a lien on it in the amount of the value of the work and materials it provided.
Plaintiff instituted this action and obtained a writ of replevin ordering the sheriff to deliver the bulldozer to plaintiff. Thereafter, the sheriff took possession of the bulldozer and delivered it to plaintiff.
Defendant moved for a summary judgment and its motion was granted by the trial judge who held that the bulldozer was not a 'motor vehicle' within the meaning of the Garage Keepers Lien Act, 1 N.J.S. 2A:44--20 et seq., N.J.S.A., but rather that defendant had an artisan's lien which is superior to the lien acquired by plaintiff.
We certified plaintiff's appeal on our motion prior to argument in the Appellate Division.
We affirm on the ground that defendant has a common-law artisan's lien superior to plaintiff's security interest.
Plaintiff contends that a bulldozer is a motor vehicle within the contemplation of the Garage Keepers Lien Act and that establishments that repair and service such motor vehicles are limited to assert a garageman's lien and may not assert an artisan's lien. As a garageman's lien is expressly, by statute, subordinate to a perfected security interest, plaintiff claims it has a prior interest in the mortgaged property.
Defendant contends that it has an artisan's lien for the work and material provided in repairing the bulldozer and that because its lien is a common-law lien, defendant's lien is superior to that of plaintiff.
The artisan's lien is a common-law lien rather than a statutory lien. New Jersey recognizes the common-law possessory artisan's lien. See, e.g., White v. Smith, 14 N.J.L. 105 (Sup.Ct.1882).
In New Jersey there is no statute establishing an artisan's lien. However, such a common-law lien is clearly recognized by N.J.S. 2A:44--32, N.J.S.A., which states as follows:
'A lien held by a person upon chattels in his possession for labor or materials furnished in the repair or construction thereof, shall not be waived, merged or impaired by the recovery of a judgment for the moneys due for such labor or material, but the lien may be enforced by levy and sale under execution upon the judgment.'
Thus, the artisan's lien qualified as a lien arising under a rule of law as required by N.J.S. 12A:9--310, N.J.S.A., which provides as follows:
'When a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon goods in the possession of such person given by statute or rule of law for such materials or services takes priority over a perfected security interest unless the lien is statutory and the statute expressly provides otherwise.'
Under this statute, the holder of an artisan's lien takes priority over the holder of a perfected security interest under the Uniform Commercial Code, N.J.S. 12A:1--101 et seq., N.J.S.A. This was, likewise, true before the adoption of the Code. See Ruppert v. Zang, 73 N.J.L. 216, 62 A. 998 (Sup.Ct.1905). See also New Jersey Study Comment to N.J.S. 12A:9--310, N.J.S.A., p. 474.
To achieve the status of such a lien holder with respect to personal property, the artisan, by his labor and skill, must contribute to the improvement of the personal property. If the artisan improves, betters, or repairs the property and thus enhances the value of the property by his skill, labor or materials, he acquires the right to a specific lien on the property. He retains this interest in the property until paid. See Kalio Universal, Inc. v. B.A.M., Inc., 95 N.J.Super. 393, 231 A.2d 376 (App.Div.1967); Beck v. Nutrodynamics, Inc., 77 N.J.Super. 448, 451--452, 186 A.2d 715 (Cty.Ct.1962); see generally, Brown, Personal Property, § 108, pp. 511--26 (2d ed. 1955). The lien includes the right to retain possession of personal property until the debt is paid.
Under the Garage Keepers Lien Act, which was adopted in 1915 and which was entitled 'An Act for the better protection of garage keepers and automobile repairmen,' Foley can claim only the statutory lien on motor vehicles upon which it worked. See B.C.S. Corp. v. Frich, 19 N.J.Misc. 129, 18 A.2d 560 (D.Ct.1941). The Act gave the garage keeper a lien on a motor vehicle which he stores, maintains, keeps, repairs and for which he furnishes gasoline, accessories, and other supplies for motor vehicles.
The garage keeper's lien, thus, differs from the artisan's lien in many respects. The garage keeper's lien applies only to motor vehicles and it may be acquired even though the chattel's value is not enhanced, as long as some services or supplies mentioned in the Act are furnished. Crucible Steel Co. v. Polack Tyre & Rubber Co., 92 N.J.L. 221, 227, 104 A. 324 (E. & A. 1918). N.J.S. 2A:44--21, N.J.S.A. specifically provides that a garage keeper's lien is subordinate to any perfected security interest. If, however, the garageman works on property other than motor vehicles, he may still claim his common-law right to an artisan's lien.
Thus, if defendant has an artisan's lien, its lien is superior to that of plaintiff's but it would apply only to the labor and materials which enhanced the value of the bulldozer. It would, thus, not include any lien that defendant had for charges resulting from maintenance or storage of the bulldozer, or such services as gasoline, oil, grease, and other maintenance services.
As stated above, this decision rests upon whether the bulldozer is a motor vehicle within the contemplation of the Garage Keepers Lien Act. For if it is a motor vehicle, defendant has only a garage keeper's lien that is inferior to plaintiff's. If it is not a motor vehicle, defendant has an artisan's lien that is superior to plaintiff's. But, no definition of a 'motor vehicle' accompanies the Garage Keepers Lien Act. Under N.J.S.A. 39:1--1 a 'vehicle' is defined in include 'every device in, upon or by which a person or property is or may be transported upon a highway.' It also defines a 'motor vehicle' to include 'all vehicles propelled otherwise than by muscular power, excepting such vehicles as run upon rails or tracks.'
We are convinced that the Legislature meant to...
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