Freund, Cafiero and Artaserse. The opinion of the court was delivered by Freund, J.A.D. Artaserse, J.s.c. (temporarily assigned) (dissenting).
This is an appeal from a judgment of the Monmouth County District Court in favor of defendant Mae B. Koopman, on plaintiffs' action to replevin two broilers, three ranges, and two shelves it had sold pursuant to a conditional sales contract.
Defendant Mae B. Koopman, the owner of a restaurant called the Buttonwood Manor, leased it together with its coal burning stoves and other fixtures to Buttonwood Manor, Inc. in July 1953. Thereafter, on April 25, 1955 Buttonwood represented itself to be the owner of the premises and purchased the broilers, ranges and shelves from plaintiffs under a conditional sales contract which reserved title to these items in the plaintiffs until full payment of the contract price, and further provided that the items should remain personal property and not become a part of the freehold.
The contract was filed with the county clerk on April 30, 1955, but before that date the purchased items were installed and the existing coal burning stoves were removed and junked. Such installation comprised merely placing the five individual broiler and range units side by side upon the concrete kitchen floor, interconnecting their respective gas pipes one to the next, and then connecting the gas pipe of one by means of a coupling connector to the restaurant service gas pipe. Thus, while the several units were interconnected, only the first was physically connected to the restaurant service gas pipe and its connection was severable without physical injury to the freehold by merely removing the coupling. Lastly, the shelves were connected directly onto the units. There is no evidence that defendant consented either to the installation of these articles or to the title reservation in the conditional sales contract.
Buttonwood defaulted in the payments under the contract and thereafter was adjudged bankrupt in a federal proceeding. Pursuant to an order of the referee in bankruptcy, the items here in question were ordered to be sold at public sale, "subject to the lien of James F. Collins & Co., in the sum of $891.84." They were sold to defendant, the highest
bidder, for $10. Defendant, at the sale, which was advertised and well attended, registered no objection to the announced lien. Indeed, she purchased other items, including an icemaker and a slicing machine, for nominal bids, subject to large outstanding liens. Also, she purchased Buttonwood's leasehold interest in the restaurant and, after confirmation of the sale, took possession of the restaurant. But she has refused to make any payments under the conditional sales contract or to deliver the items to plaintiffs.
The trial court found factually that "the merchandise covered by the conditional sales agreement was purchased by the lessee to replace existing coal burning stove in the kitchen of the restaurant building and that the units * * * were placed upon the concrete floor and not physically attached to any part of the building other than by a coupling connection" to the restaurant gas service pipe. Nevertheless, it concluded that since the cooking equipment was a necessary and integral part of the restaurant business, it was bound by the institutional test prevalent in this State, that the equipment could not be removed without material injury to the freehold. Hence, the relief plaintiffs seek was denied. The defendant died subsequent to the commencement of this action and her co-executors have been substituted as parties-defendants.
On this appeal plaintiffs' argument is twofold: that defendant should be estopped from contesting the validity of plaintiffs' lien; and that the ranges, broilers and shelves are not affixed to the realty so as to become part thereof and hence may be replevined. The latter argument will be considered first.
R.S. 46:32-10, which corresponds to section 4 of the Uniform Conditional Sales Act, provides that
"Every provision in a conditional sale reserving property in the seller after possession of the goods is delivered to the buyer, shall be valid as to all persons, except as otherwise provided."
Further, R.S. 46:32-14, corresponding to section 7, provides that:
"If the goods are so affixed to realty, at the time of the conditional sale or subsequently, as to become a part thereof and not to be severable wholly or in any portion without material injury to the freehold, the reservation of property as to any portion not so severable shall be void after the goods are so ...