Cent. R. R. of N. J. v. State

• Decision Date: 20 December 1886
• Citation: 7 A. 306,49 N.J.L. 1
• Parties: CENTRAL R. R. OF N. J. and another v. STATE BOARD OF ASSESSORS.
• Court: New Jersey Supreme Court

7 A. 306

49 N.J.L. 1

CENTRAL R. R. OF N. J. and another

v. STATE BOARD OF ASSESSORS.

Supreme Court of New Jersey.

December 20, 1886.

(Syllabus by the Court.)

On certiorari from taxes assessed by the State Board of Assessors.

B. Williamson, Joseph D. Bedle, George R. Kaercher, and Robert W. de Forest, for plaintiffs.

Atty. Gen. Stockton and Barker Gummere, for the State.

BEASLEY, C. J. The two companies above named have been selected, for the purposes of this opinion, as the representatives of the numerous prosecutors of the writs of certiorari now before the court, because in these two cases most of the important questions are presented for decision which are common to this entire class of litigants. It is to be understood, therefore, that whatever is adjudged touching such general topics must be taken as a determination of the subject in each respective case.

The prosecutors of these writs are before the court seeking a review of certain assessments of taxes made upon their property by the State Board of Assessors under the statute entitled "An act for the taxation of railroad and canal property," approved April 10, 1884, (P. L. 1884, p. 142.) It is the sixteenth section of this enactment that imposes on this court its present duty, by giving to the company assessed, on the one side, and to the attorney general, on the other, the right to a certiorari, and by declaring that upon such writ relief may be had "as well in cases where it is claimed that the amount of tax is excessive or insufficient, as in cases where it is claimed that the principle upon which the assessment is made is erroneous." By force of this provision the court is now appealed to, in behalf of these companies, to declare that certain parts of their assessments are erroneous, either because they are founded on exorbitant valuations of their property which have been induced by error of judgment, or by the adoption of false principles of appraisal, or because the taxes themselves have been put upon them in disregard of the constitution of this state, or of that of the United States.

Before, however, entering upon the consideration of these topics, it appears to us proper to premise that the mode adopted in bringing these procedures before the court must not be taken as an approved precedent for future action. In the present instances the course taken has been this: The State Board made its assessments, and the companies, feeling themselves aggrieved, appealed to the board for a review, as they were entitled to do by force of a provision to that effect in the statute. From the adjudication thus resulting the proceedings were removed to this court by these certiorari, and thereupon, in pursuance of authority given by a rule of court, testimony was taken; and it is upon that testimony that the cases have been heard and are now to be decided by us. From this statement it is evident that, as the matter stands, we are trying these matters de novo, and are not altogether reviewing the action of the State Board. We do not think that the statute justifies such a proceeding. It does not appear to have been the legislative design to throw upon us such a burden as this, or to convert the court into a board of assessors to ascertain the values of this vast mass of multifarious property, founding its judgment on evidence taken under its authority, and for the first time introduced into the case. Our interpretation of this part of the statute is that it requires the substantial case to be laid in extenso before the State Board, and exceptions to be there taken, and that it is the case so made, so far as it has been excepted to, that is removable to this court for review. In our opinion, no general rule to take new evidence should be allowed by this court, either on the allowance of the certiorari or upon its return. This is evinced by the general adjustments of the section giving this remedy, and particularly by the fact that a certiorari is not permitted "unless the applicant has applied to the board to review the assessment." The result, in the present instance, should serve as a warning to the court against any endeavor to try these cases anew on these appellate proceedings, as we have in our hands several volumes of arithmetical details, which, to understand in their various applications, would require months of labor. With these preliminary remarks, we will proceed to dispose of the principal matters to which our attention has been called in the briefs of the several counsel.

Objection is made, in various respects, to the valuations of property which have been returned by the State Board. The first exception in this vein is that, instead of ascertaining the true value of the lands of these companies, the board, after ascertaining such value, multiplied the sum thus settled by the numbers two or three, and adopted the product as the market or true value of the property. It is insisted that, by this course, these officers have assessed these lands at two or three times their real value. But we have failed to see either the illegality or injustice of this part of the proceeding. The problem is not what land for agricultural or building purposes is worth, but what a narrow strip of land, with valuable easements annexed to it, adapted to railroad uses, will bring in the market. That such strip of land, to be applied in such a manner, cannot be bought at the price that the adjacent lands sell for by the acre, is at once obvious. When a railroad is located so as to pass through a building plat, or a farm, the damage done to the part of the land not appropriated is generally many times the value of the land so taken, estimating its value by the acre, and consequently the owner of the required land will not sell it except at a price that will compensate him as well for the land he sells as for the damage sustained by the residue of his property. There is no reason to suppose that the land thus acquired, if sold in the market, for railroad purposes, will not bring a sum equal to the cost of its acquisition. The consequence is that even if we assume these valuations to have been made in the manner alleged by the plaintiffs, and which fact is disputed by the counsel for the state, still it is plain that the State Board could not have reasonably estimated the lands in question by the measure of the value of the adjacent lands; and, as there is nothing before us from which we can perceive that the result which has been attained by the methods used by the board is manifestly wrong or exorbitant, the appraisals in question cannot be annulled or reformed.

But it is again objected that the State Board, in estimating the value of these roads and structures, took, as the absolute standard of value, either the original cost of acquisition and construction, less wear and tear, or the cost of reproduction. We think this premise is not to be conceded, for there is no evidence from which it can reasonably be inferred that so fallacious a measure of value was adopted. It is common knowledge that what a thing has cost is no infallible criterion of its market value. It is therefore to the highest degree improbable that the officers composing this board, who have manifested so conspicuously both capacity and knowledge with reference to the multiform and intricate subjects embraced in these suits, could have fallen into an error so utterly puerile. That the board ascertained the cost of acquisition and construction is beyond doubt. It could scarcely perform its functions intelligently without doing so; for such cost, though not an incontestable evidence of exchangeable value, is, nevertheless, almost always an important particular in the mass of circumstances laying the basis of a rational judgment touching the value of anything as an article of sale. That the State Board used "cost" in the way thus indicated is clear; but it is not shown that it was used as an absolute measure. The inference drawn by counsel that, because the cost ascertained and proved by the engineers, who were the witnesses called by the state, very often agree in amount quite closely with the valuations found by the board, therefore the standard of cost was adopted by the board, is, we think, not warranted. Such approximations between these respective valuations were to be expected; for no reason is perceived why the property of a successful railroad is not worth about the sum that it would cost to replace it, allowance being made for its depreciation from use.

Again, it is urged that it is not practicable to make a constitutional valuation of property, for the purpose of taxation, by the distributive method defined in this statute. The statutable direction referred to is that the State Board shall value separately (1) the main stem, consisting of a strip 100 feet in width, with its superincumbent structures; (2) the other real estate used for railroad purposes; (3) the tangible personal property; (4) the franchises. But we think that this general objection we are not called upon to consider, inasmuch as, in our opinion, the court of errors has passed upon the question, and declared this contention to be untenable. This system of disjunctive valuations lies at the basis of this act. It could not be executed on any other plan. Consequently, when the act was vindicated on constitutional grounds, the system, thus essential to it, was likewise vindicated.

But it is further said that, admitting the constitutionality of the system just mentioned, the methods of valuation applied to the franchises of these companies are illegal, and their results unjust and oppressive. The State Board has in its return specifically stated the mode it pursued in valuing this species of property. This is the language of the return: "And the said board do further certify and return that, for the purpose of ascertaining the value of the franchise of the several corporations whose franchises were taxable under the...