Baldwin Const. Co. v. Essex County Bd. of Taxation

• Decision Date: 30 October 1953
• Docket Number: No. A--230,A--230
• Citation: 100 A.2d 341,28 N.J.Super. 110
• Parties: BALDWIN CONST. CO. et al. v. ESSEX COUNTY BOARD OF TAXATION et al. . Appellate Division
• Court: New Jersey Superior Court — Appellate Division

Page 110

28 N.J.Super. 110

100 A.2d 341

BALDWIN CONST. CO. et al. v. ESSEX COUNTY BOARD OF TAXATION et al.

No. A--230.

Superior Court of New Jersey.

Appellate Division.

Argued Oct. 19, 1953.

Decided Oct. 30, 1953.

James Rosen, Deputy Atty. Gen., argued the cause for the appellants (Theodore D. Parsons, Atty. Gen., Benjamin M. Taub, Deputy Atty. Gen., attorneys for appellant Essex County Board of Taxation; Donald Karrakis, East Orange, attorney for appellant City of East Orange).

Herbert J. Hannoch and Blair Reiley, Newark, argued the cause for the respondents. Joseph L. Lippman, Hannoch, Lasser, Weinstein & Myers, Martin & Reiley, Selick J. Mindes, Levy & Krauss, Sanderson & Engle and Bernard Shurkin, Newark, attorneys for various respondents in the consolidated appeals.

Before Judges EASTWOOD, JAYNE and FRANCIS.

The opinion of the court was delivered by

FRANCIS, J.A.D.

In the exercise of the authority conferred by N.J.S.A. 54:3--17 et seq., and 54:4--46 et seq., the Essex County Board of Taxation undertook to 'revise, correct and equalize' the assessed valuation of real and personal property in the City of East Orange. To accomplish this, on March 20, 1952 it issued a single order to the assessor, directing substantial increases in the 1952 assessments of a large number of parcels of real estate.

Respondents, being some of the owners affected by the order, filed a complaint in lieu of prerogative writ in the Law Division of this court against appellants, Essex County Board of Taxation and City of East Orange, charging that the methods used by the tax board in arriving at the various increases in the assessments were arbitrary, unreasonable and not uniform in their application to all the property in the city and that the increases resulted, not in the accomplishment of the statutory mandate to bring about the taxation of All property in the county or in the taxing district equally and at its true value, but in assessments which discriminated against them and caused them to bear an unequal and disproportionate share of the tax burden. The relief sought was a judgment that the order of the tax board is void and that the increases in the assessments are discriminatory and void.

In support of their action in bypassing the county tax board and the Division of Tax Appeals, the property owners alleged that since the county board had made the orders in question, an adequate review of their validity could not be obtained in that agency, and that under the law no authority existed in either board to grant relief against discriminatory assessments unless such assessments were above true value. It was further asserted as a practical basis for intervention by the courts that the prosecution of individual appeals before the boards by the large number of taxpayers affected, would necessitate repetitious testimony and prohibitive cost for any one of them.

The tax board and the city moved to dismiss the action on the ground that the administrative remedies of appeal to the county and state tax boards had not been exhausted. The motion was denied. Baldwin Const. Co. v. Essex County Board of Taxation, 21 N.J.Super. 370, 91 A.2d 224 (Law Div. 1952).

Thereupon answers were filed and some discovery proceedings engaged in. The county board then moved for summary judgment, contending that under Rule 3:81--8 (now R.R. 4:88--8) review of its final action, as a state administrative agency, was by appeal to the Appellate Division.

Again the application was denied in large measure upon the same ground as the earlier motion, namely, that under Rule 3:81--14 (now R.R. 4:88--14) the exhaustion of administrative review was not necessary because manifestly the interests of justice required initial resort to the courts. Ibid., 24 N.J.Super. 252, 93 A.2d 800 (Law Div. 1952). Apparently the major factor which brought about this conclusion was the doubt which, the court felt, exists as to the authority of either the county or state tax board of remedy discriminatory assessments, where doing so would reduce such assessments below the true value of the property.

On appeal, this ruling was affirmed Per curiam on certain terms. Ibid., 27 N.J.Super. 240, 99 A.2d 214 (App.Div.1953). Thereafter, the cause was reargued at our suggestion.

In 1908 the rule was reaffirmed in New Jersey that if a taxpayer's property is assessed at true value, the fact that the property of others in the same district is assessed at less than true value provided no ground for reducing his assessment below true value. In such a situation, his only redress is to apply for an increase in the valuations of the others. Royal Mfg. Co. v. Board of Equalization, 76 N.J.L. 402, 70 A. 978 (Sup.Ct.1908), affirmed 78 N.J.L. 337, 74 A. 525 (E. & A. 1909); Maxson v. Segoine, 53 N.J.L. 339, 21 A. 852 (Sup.Ct.1891), affirmed 54 N.J.L. 212, 25 A. 963 (E. & A. 1891); State, etc. v. Koster, 38 N.J.L. 308 (Sup.Ct.1876); State, etc. v. Taylor, 35 N.J.L. 184 (Sup.Ct.1871); State v. Dickerson, 25 N.J.L. 427 (Sup.Ct.1856). The view that no other relief could be given, no matter how manifest the discrimination, stemmed from the direction of the 1844 Constitution that 'property shall be assessed for taxes * * * according to its true value' (Art. IV, § VII, par. 12), and from the legislative prescription that 'each county board of taxation shall secure taxation of all property in the county at its true value, in order that all property * * * shall bear its full, equal and just share of taxes.' N.J.S.A. 54:3--13.

Recognition of the Royal case persisted down to 1946, when Hillsborough Township v. Cromwell, 326 U.S. 620, 66 S.Ct. 445, 90 L.Ed. 358, was decided. There it was declared that the constitutional safeguard of the Fourteenth Amendment of the United States Constitution, against the taking of property without due process of law and in denial of the equal protection of the law, is not satisfied by a doctrine which imposes upon a taxpayer, who is subjected to discrimination in the matter of assessment of his property, the burden of seeking an increase in the valuations of the properties of the other members of his class.

Since that time, although there have been statements in the opinions of our courts giving heed to the broader vista for relief opened to the taxpayer (Jersey City v. Division of Tax Appeals, 5 N.J.Super. 375, 69 A.2d 331 (App.Div.1949), affirmed 5 N.J. 433, 75 A.2d 865 (1950); Hackensack Water Co. v. Township of North Bergen, 8 N.J.Super. 139, 73 A.2d 597 (App.Div.1950); Delaware, Lackawanna & Western R. Co. v. City of Hoboken, 16 N.J.Super. 543, 85 A.2d 200 (App.Div.1951), reversed on other grounds, 10 N.J. 418, 91 A.2d 739 (1952)), there has been no specific overruling of the Royal case. At the oral argument the parties urged that such action be taken because there remains doubt at the administrative agency level as to its present status.

Deferring, as we must, to the decision of the United States Supreme Court with respect to the operation of the Fourteenth Amendment, we hold that the Royal case is no longer the law of this State, so far as it limits the relief obtainable by a victim of unequal treatment in the matter of assessment, to an increase in the assessments of the other taxpayers of his class up to true value, through proceedings instituted and carried on by him.

This declaration results inevitably in the inquiry which is at the heart of the present case. What relief can such a taxpayer obtain, particularly in the county tax boards and in the Division of Tax Appeals? It has been said that he would 'have the opportunity to prove the fact before one or other of the tax boards' (Jersey City v. Division of Tax Appeals, supra, 5 N.J.Super. at page 385, 69 A.2d at page 336), that 'his right to equal treatment requires that his assessment be reduced to the Same percentage of true value that is imposed on others * * *,' and that he 'may raise the question of discrimination and...