Central R. Co. of New Jersey v. Martin

• Decision Date: 16 June 1933
• Docket Number: No. 5103,5104.,5103
• Parties: CENTRAL R. CO. OF NEW JERSEY v. MARTIN, State Tax Com'r, et al. LEHIGH VALLEY R. CO. OF NEW JERSEY et al. v. SAME.
• Court: U.S. Court of Appeals — Third Circuit

65 F.2d 613 (1933)

CENTRAL R. CO. OF NEW JERSEY v. MARTIN, State Tax Com'r, et al.

LEHIGH VALLEY R. CO. OF NEW JERSEY et al. v. SAME.

Nos. 5103, 5104.

Circuit Court of Appeals, Third Circuit.

June 16, 1933.

Maximilian M. Stallman, of Newark, N. J., Robert J. Bain, of Jersey City, N. J., and Alexander H. Elder and Jervis Langdon, Jr., both of New York City, for appellants.

William A. Stevens, Atty. Gen. (Duane E. Minard, Asst. Atty. Gen., Edward P. Stout, of Jersey City, N. J., and John Solan, of Trenton, N. J., of counsel), for appellees.

Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

BUFFINGTON, Circuit Judge.

In the court below the Central Railroad Company of New Jersey and the Lehigh Valley Railroad, owning property in New Jersey, each filed a bill in equity against the State Tax Commissioner, State Comptroller of the Treasury, the State Treasurer, and the State Attorney General, praying for relief against alleged unjust discrimination in the assessment and collection of taxes. No answer was filed by the defendants, who moved to dismiss the bills, which that court did. Thereupon an appeal was taken in each case. There having been no answer filed, we, for present purposes, take the averments of the bills as proven: That there has been unjust discrimination, in that property of other taxpayers has been assessed at 65 per cent. of its value, while the plaintiffs' property has been assessed on 100 per cent. valuation; that this has been "consistently, systematically, intentionally and notoriously" done; that they offered to prove these facts to the state taxing authorities and were refused relief. Such being the case before it, was the court below in error in dismissing the bills?

That such an intentional, discriminatory, and unfair assessment is a violation of federal constitutional rights is clear. See Sioux City Bridge v. Dakota County, 260 U. S. 441, 43 S. Ct. 190, 191, 67 L. Ed. 340, 28 A. L. R. 979, where, quoting from Sunday Lake Iron Co. v. Wakefield, 247 U. S. 350, 38 S. Ct. 495, 62 L. Ed. 1154, it is said: "`The purpose of the equal protection clause of the Fourteenth Amendment is to secure every person within the state's jurisdiction against intentional and arbitrary discrimination, whether occasioned by express terms of a statute or by its improper execution through duly constituted agents. And it must be regarded as settled that intentional systematic undervaluation by state officials of other taxable property in the same class contravenes the constitutional right of one taxed upon the full value of his property. Raymond v. Chicago U. T. Co., 207 U. S. 20, 35, 37 28 S. Ct. 7, 52 L. Ed. 78, 12 Ann. Cas. 757.' Analogous cases are Greene v. Louisville & Interurban R. Co., 244 U. S. 499, 516, 517, 518, 37 S. Ct. 673, 61 L. Ed. 1280 Ann. Cas. 1917E, 88; Cummings v. Merchants' Nat. Bank, 101 U. S. 153, 160, 25 L. Ed. 903; Taylor v. Louisville & N. R. Co., 31 C. C. A. 537, 88 F. 350, 364, 365, 372, 374; Louisville & N. R. R. Co. v. Bosworth (D. C.) 209 F. 380, 452; Washington Power Co. v. Kootenai County (C. C. A.) 270 F. 369, 374."

To the same effect are: Greene v. Louisville & I. R. Co. 244 U. S. 499, 37 S. Ct. 673, 61 L. Ed. 1280, Ann. Cas. 1917E, 88; Montana Nat. Bank v. Yellowstone County, 276 U. S. 499, 48 S. Ct. 331, 72 L. Ed. 673; Cumberland Coal Co. v. Board of Revision of Tax Assessments, 284 U. S. 23, 52 S. Ct. 48, 76 L. Ed. 146; Iowa-Des Moines Nat. Bank v. Bennett, 284 U. S. 239, 52 S. Ct. 133, 76 L. Ed. 265.

Such violation existing, the right is to have the discriminatory assessment of 100 per cent. reduced to the 65 per cent. level of other taxpayers, or, as the Supreme Court, citing Taylor v. Louisville & N. R. Co. (C. C. A.) 88 F. 350, and Greene v. Louisville & I. R. Co., 244 U. S. 499, 37 S. Ct. 673, 61 L. Ed. 1280, Ann. Cas. 1917E, 88, held in Sioux City Bridge Co. v. Dakota County, 260 U. S. 446, 43 S. Ct. 190, 192, 67 L. Ed. 340, 28 A. L. R. 979: "This court holds that the right of the taxpayer whose property alone is taxed at 100 per cent. of its true value is to have his assessment reduced to the percentage of that value at which others are taxed." Later on it was held in Iowa-Des Moines Nat. Bank v. Bennett, 284 U. S. 239, 52 S. Ct. 133, 136, 76 L. Ed. 265: "The right invoked is that to equal treatment; and such treatment will be attained if either their competitors' taxes are increased or their own reduced. But it is well settled that a taxpayer who has been subjected to discriminatory taxation through the favoring of others in violation of federal law cannot be required himself to assume the burden of seeking an increase of the taxes which the others should have paid. Cumberland Coal Co. v. Board of Revision 284 U. S. 23, 52 S. Ct. 48, 76 L. Ed. 146, supra; Greene v. Louisville & I. R. Co., 244 U. S. 499, 514-518, 37 S. Ct. 673, 61 L. Ed. 1280, Ann. Cas. 1917E, 88; Chicago Great Western Ry. Co. v. Kendall, 266 U. S. 94, 96, 98, 45 S. Ct. 55, 69 L. Ed. 183; Sioux City Bridge Co. v. Dakota County 260 U. S. 441, 43 S. Ct. 190, 67 L. Ed. 340, 28 A. L. R. 979, supra. Nor may he be remitted to the necessity of awaiting such action by the state officials upon their own initiative. Montana National Bank v. Yellowstone County 276 U. S. 499, 48 S. Ct. 331, 72 L. Ed. 673, supra."

But assuming for present purposes that the taxpayer who had been unjustly and intentionally discriminated against had resorted to the state courts for redress, it is clear that those courts concede their inability to grant relief. This they cannot do on two stated grounds. First, the constitution of New Jersey providing for the assessment of property on the basis of actual value, the courts of that state are unable, by reason thereof, to reduce and assess the plaintiffs' property on the 65 per cent. basis of their neighbors'; and, second, the Legislature of the state has provided no machinery for raising the 65 per cent. assessment of the plaintiffs' fellow taxpayers up to the 100 per cent. assessment of the plaintiffs.

As to the first proposition, the Court of Errors and Appeals, in Long Dock Co. v. State Board of Taxes & Assessment, 90 N. J. Law, 702, 101 A. 368, affirms the judgment of the New Jersey Supreme Court (89 N. J. Law, 108, 97 A. 900, 903),...