Cent. R. Co. of N.J. v. State Tax Dep't

• Decision Date: 07 December 1933
• Docket Number: No. 119.,119.
• Citation: 169 A. 489
• Parties: CENTRAL R. CO. OF NEW JERSEY v. STATE TAX DEPARTMENT et al.
• Court: New Jersey Supreme Court

169 A. 489

CENTRAL R. CO. OF NEW JERSEY

v. STATE TAX DEPARTMENT et al.

No. 119.

Court of Errors and Appeals of New Jersey.

Dec. 7, 1933.

Appeal from Supreme Court.

Proceeding by the Central Railroad Company of New Jersey for a writ of certiorari to the State Tax Department and others to review a tax levy by the State Board of Taxes and Assessments. From a judgment dismissing the writ (109 N. J. Law, 395, 162 A. 889), prosecutor appeals.

Affirmed.

Collins & Corbin, of Jersey City, for appellant.

William A. Stevens, Atty. Gen., for respondents.

PERSKIE, Justice.

This appeal brings up for review a judgment of the Supreme Court, dismissing the writ of certiorari to review the tax levied by the state board of taxes and assessment on appellant's main stem, tangible personal property and franchise, more commonly designated as first, third, and fourth class property, for the year 1931.

The appellant contends that the tax in question was levied at a rate in excess of the rate provided by law, and, therefore, the tax is excessive; that the tax unlawfully discriminates against appellant and denies it the equal protection of the laws in violation of the Fourteenth Amendment to the Constitution of the United States; that the tax to the extent that it is in excess of the lawful tax, deprives appellant of its property without due process of law, in further violation of the Fourteenth Amendment to the Federal Constitution; that the remedy suggested by the Supreme Court to meet the requirements of the equal protection of the laws and the due process of law is inapplicable, and, in any event is no remedy at all under the decisions of the United States Supreme Court; and that the Supreme Court could and should have either reduced the tax or remitted the matter to the state tax department with instructions to reduce it.

The respondents deny the applicability of these contentions to the instant case. The appellant's objections are the outgrowths of its alleged basic or fundamental grievance, namely, that the "average rate of taxation" was not computed by the use of true values.

The legislative provisions relative to the manner of ascertaining this rate are contained in P. L. 1888, c. 208, p. 269 (4 Comp. St. 1910, p. 5260, § 445 et seq.) and in chapter 82, p. 121, of the Laws of 1906 (4 Comp. St. 1910, p. 5279, § 482 et seq.), and also in chapter 4, p. 14 of the Laws of 1922 (2 Cum. Supp. to Comp. St. 1924, p. 3547, § 208—447d). In substance said chapter 82 of the Laws of 1906 provides that the assessor in every taxing district of the state shall prepare and forward annually to the state board of assessors (now state tax commissioner) a certificate, under oath, showing the true value of all property, real and personal, located in his taxing district other than the property of railroad and canal companies, but including the assessed values of so-called second class railroads and canal property; that the aggregate value of all the property, real and personal, so certified, shall be deemed to be the aggregate value of the general property in the state; that in each taxing district the amount obtained by multiplying the value of all the property in such taxing district by the rate of taxation therein shall be deemed to be the total taxes in said taxing district; that the aggregate of the said total taxes so ascertained shall be deemed to be the aggregate taxes of the state. The act further provides that the "average rate of taxation" shall be computed and determined by the said board (now state tax commissioner) by dividing the aggregate taxes by the aggregate value of the general property in the state and that the rate so arrived at shall be entered upon the records of the board (now state tax commissioner) and shall constitute the "average rate of taxation" for the year.

Notwithstanding the clear provisions of the law of arriving at the "average rate of taxation" on its property in question, appellant asserted and sought to establish an organized and determined effort of local assessors to assess local property at less than its true value. The practice or the method employed by local assessors throughout the state to bring about this result, it is charged, was to assess all property other than that of the appellant at not more than 60 per cent. of its true value. It is claimed that the property of the appellant was assessed at 100 per cent. of its true value. The result was that the average tax rate, so computed, amounted to $4,081 per $100 of value. It is further contended that, if the average tax rate had been computed according to the true value of all property subject to local taxation throughout the state, as provided by law, the rate would not have been more than $2,093 per $100 of value.

It therefore seems sound in logic and clear in reason that appellant must stand or fall on its ability to sustain by competent and satisfactory proof the basic or fundamental grievance asserted by it. For, if the foundation falls, all reasons based on that foundation must likewise fall.

We therefore pass over all other questions and approach the inquiry, namely, Did the appellant, by proper and satisfactory proof, sustain its basic or fundamental grievance? We think not.

Appellant endeavored to fashion its proof to comply with the character of the evidence that seems to appear in the class of cases of which Louisville & Nashville Railroad Co. v. Greene et al., 244 U. S. 522, 37 S. Ct. 683, 61 L. Ed. 1291, Ann. Cas. 1917E, 97, is typical. But was the testimony in the instant case sufficiently definite, positive, or certain in quality or quantity to overcome the presumption of the correctness of the assessments made? We do not think so. In the case of Estell v. Hawkens, 50 N. J. Law, 122, at page 125, 11 A. 265, 267, it was held:

"* * * The presumption is in favor of the correctness of the estimation made by the assessor, the sworn officer, and before a tax can be disturbed on the ground alleged, the burden is put upon the objector to show by his proofs a clear error in such estimation.

"When the testimony does not decidedly bear against the correctness of the assessor's action, the court cannot disturb it."

In Michigan Central R. Co. v. Powers, 201 U. S. 245, 26 S. Ct. 459, 463, 50 L. Ed. 744, Justice Brewer, speaking for the court, held:

"* * * There is always a possibility of misconduct on the part of officials, but legislation would be seriously hindered if it may not proceed upon the assumption of a proper discharge of their duties by the various officials. And it must be remembered that, in view of the vast multitude of local taxing boards (as stated in one of the briefs of counsel for appellant, there are about 1,300 local assessment districts), the action of any single board could have but little influence upon the railroad rate. Beyond the assumption that these local officers will act from a sense of duty is the further fact that their action affects directly and principally the special communities for which they act, and that, generally speaking, is a sufficient guaranty. * * *"

It would serve no useful purpose to reanalyze the testimony upon which the state board of tax appeals based its judgment. Suffice it to point out that the testimony was fully and most carefully analyzed by the state board of tax appeals. Mr. Weaver, its president, speaking for the board, in part, held:

"Great latitude was allowed appellants in their proofs so that everything might be brought before the Board, but a careful reading of the testimony establishes no more or no less than in certain taxing districts there are some under-valuations and in other taxing districts there are some over-valuations. The proofs were general and not specific; they failed to show anything with respect to the great mass of taxable property. The evidence offered only affected small portions or sections of fourteen of the twenty-one counties of the State. Many of appellants' witnesses failed to fix any time when they based their determination of the alleged ratio of assessed value to true value. The time to be established was of October 1st, 1930. The Supreme Court has said: 'Each assessment of property for taxation is a separate entity distinct from the assessment of the previous or subsequent years; assessments are made each year.' United New Jersey Railroad & Canal Company v. State Board of Taxes and Assessment et al., 101 N. J. Law, 303, 128 A. 427."

"Many of appellants' witnesses failed to show any sales or other bases in the year 1930 for their determination; some few showed sales for the year 1930 ranging in number from seven to twenty-one. The testimony further shows that sales made were mostly of active or desirable property, but the great bulk of property was inactive and this condition was state wide. Judicial notice must be taken of the fact that the real estate market has been inactive for several years and many properties are now assessed for more than their true value. In fact it is almost impossible to determine what true value now is or has been since 1928. The testimony showed that some portions of the State, like Camden County, were undervalued and others were over-valued."

The character of the testimony offered could not justify a possible finding that there existed an organized and determined effort on the part of local assessors to assess, systematically or intentionally, local property at less than its true value, as asserted by appellant.

The asserted claim of the appellant that its property is assessed at 100 per cent. of its true value, and that all other property is not so assessed, is unconvincing. It lacks persuasion. The record is barren of any proper or satisfactory evidence which would tend to show that appellant's property was valued at a higher level than that of local assessable property generally. See Skagit County v. Northern Pacific Railway Co. (C. C. A.) 61 F.(2d) 638, 86 A. L. R. 1012. We are bound by the...