Central R. Co. of N. J. v. Neeld
| Decision Date | 17 February 1958 |
| Docket Number | No. A--62,A--62 |
| Citation | 139 A.2d 110,26 N.J. 172 |
| Parties | The CENTRAL RAILROAD COMPANY OF NEW JERSEY, a corporation of the State of New Jersey, Plaintiff-Respondent, v. Aaron K. NEELD, Director, Division of Taxation in the Department of the Treasury, State of New Jersey, Defendant, and City of Jersey City, a municipal corporation of the State of New Jersey, Defendant-Appellant. The PENNSYLVANIA RAILROAD COMPANY, a corporation of the Commonwealth of Pennsylvania, Plaintiff-Respondent, v. Aaron K. NEELD, Director, Division of Taxation, etc., Defendant, and Jersey City, City of Hoboken, City of Camden, and Town of Secaucus, all municipal corporations of the State of New Jersey, Defendants-Appellants. LEHIGH VALLEY RAILROAD COMPANY, a corporation of the State of Pennsylvania, Plaintiff-Respondent, v. Aaron K. KEELD, Director, Division of Taxation, etc., Defendant, and Jersey City, and City of Newark, municipal corporations, Defendants- Appellants. The DELAWARE, LACKAWANNA AND WESTERN RAILROAD COMPANY, a corporation, Plaintiff-Respondent, v. Aaron K. NEELD, Director, Division of Taxation, etc., Defendant, and Cities of Hoboken, Jersey City and Newark, and Town of Secaucus, municipal corporations, Defendants-Appellants. ERIE RAILROAD COMPANY, a corporation of the State of New York, Plaintiff- Respondent, v. Aaron K. NEELD, Director of the Division of Taxation, etc., Defendant, and Jersey City, a municipal corporation of the State of New Jersey, City of Hoboken, a municipal corporation of the State of New Jersey, Township ofWeehawken, a municipal corporation of the State of New Jersey, and Town of Secaucus, a municipal corporation of the State of New Jersey, Defendants-Appellants. |
| Court | New Jersey Supreme Court |
Leo Rosenblum, Jersey City, and Herbert H. Fine, Newark, for appellants (Ezra L. Nolan, Corp. Counsel, Jersey City, attorney for defendant-appellant City of Jersey City; James Rosen, Newark, attorney for defendant-appellant Weehawken Tp David Pollack, Secaucus, attorney for defendant-appellant Town of Secaucus; Vincent P. Torppey, Corp. Counsel, Newark, attorney for defendant-appellant City of Newark; Norman Heine, Camden, attorney for defendant-appellant City of Camden; Herbert H. Fine, Newark, attorney for City of Hoboken).
Raymond J. Lamb, Joseph C. Glavin, Jersey City, and Augustus Nasmith, Newark, for respondents (Emory, Langan, Lamb & Blake, Jersey City, attorneys for plaintiffs-respondents Erie R. Co. and Lehigh Valley R. Co.).
The opinion of the court was delivered by
These are five consolidated appeals from interlocutory orders of the Law Division denying the defendants' motions to dismiss the complaints filed by the plaintiff railroad companies. Leave to appeal was granted by the Appellate Division (R.R. 2:2--3(a)) and we certified on our own motion (R.R. 1:10--1(a)).
Prior to December 10, 1956 the defendant Aaron K. Neeld, Director, Division of Taxation in the Department of the Treasury, made his preliminary determinations of the value of various Class I and Class II properties of the plaintiff railroads, including properties located in the defendant municipalities. See R.S. 54:29A--17, N.J.S.A. In accordance with R.S. 54: 29A--18, N.J.S.A., petitions were filed on January 14, 1957 by all of the railroads alleging that the valuations were excessive and discriminatory, and by most of the municipalities alleging that the valuations were below true value. On January 29, 1957 hearings were held by the Director and the railroads stressed that he was obligated to eliminate discrimination in his Class II railroad assessments by reducing the level of assessments 'to the general ratio of assessments in the taxing districts.' In response the Director indicated that, under the law as he then conceived it, he was in all events required to assess Class II properties at true value. On March 5, 1957 the railroads filed actions in the Law Division in which they sought (1) a declaration that the Director had the power and duty to assess their Class II properties according to the 'average ratio of assessed to true value' employed by the defendant municipalities in assessing other real property within their borders, and (2) an order enjoining the Director from certifying his final valuations until he had eliminated the alleged discrimination between the Class II properties and other real property. In these actions there were motions for summary judgment and for dismissal of the complaints; on March 13, 1957 the Law Division dismissed the complaints in an order which set forth that, since the Supreme Court had on March 11, 1957 decided in Delaware, Lackawanna and Western R.R. Co. v. Neeld, 23 N.J. 561, 130 A.2d 6 (1957), that the Director had jurisdiction to make his final assessment as less than true value when necessary to prevent discrimination, it was unnecessary for the Law Division so to declare.
On March 15, 1957 the Director certified his 1957 assessments against the railroads' Class II properties in the defendant municipalities and filed findings and conclusions in which he recognized the Supreme Court's ruling that he was empowered and required to make his final assessments of Class II railroad property 'at the common level of assessment prevailing in the respective taxing districts,' but found that at no time during the hearings before him had any proof been adduced to show such common level of assessment. He pointed out that the Supreme Court had held that the average assessment ratio as shown on the Director's Table of Equalized Valuations (R.S. 54:1--35, N.J.S.A.) was not synonymous with and did not represent the common level of assessment in the taxing district and that the railroads had failed to introduce any proof as to true value or common level of assessment and that no yardsticks were presently available from which he could make a proper determination of common level of assessment. See Delaware, Lackawanna and Western R.R. Co. v. Neeld, supra, 23 N.J., at page 573, 130 A.2d 6. Cf. Switz v. Middletown Twp., 23 N.J. 580, 594, 130 A.2d 15 (1957); Jat Company, Inc., v. Division of Tax Appeals, 47 N.J.Super. 571, 581, 136 A.2d 666 (App.Div.1957); North Bergen Twp. v. Venino, 45 N.J.Super. 143, 147, 131 A.2d 792 (App.Div.1957). After referring to the public need for avoiding delay in his final certification and the availability of complete review in the Division of Tax Appeals (R.S. 54:29A--31, N.J.S.A.), he certified his valuations of Class II railroad properties at true value. In due course the railroads filed appeals to the Division of Tax Appeals from the Director's action and those appeals are now pending. In addition the railroads filed their present complaints in the Law Division seeking final judgments (1) declaring that the 1957 assessments against their Class II properties constitute illegal and unconstitutional discrimination against them and are null and void, and (2) ordering the Director to ascertain the general or common ratio of locally assessed properties in the municipalities and reducing his 1957 assessment to such general or common standard of assessment. The defendant municipalities moved to dismiss the complaints, but their motions were denied and their present appeal is from that action. In support of their appeal they now urge (1) that the Law Division's dismissal of the plaintiffs' earlier complaints on March 13, 1957 is Res judicata and precludes their present actions; (2) that the plaintiffs have failed to exhaust their administrative appeal to the Division of Tax Appeals as required by R.R. 4:88--14; and (3) that in any event the plaintiffs' actions should have been brought under R.R. 4:88--8 in the Appellate Division rather than in the Law Division.
We reject the appellants' contention that the dismissal order of March 13, 1957 is Res judicata and in itself precludes the railroads' present actions. The doctrine of Res judicata is well designed to preclude the relitigation of issues which have been fairly and finally determined, but it ordinarily does not come into play where the parties have not had an adjudication on the ultimate merits. See Meier Credit Co. v. Yeo, 129 N.J.L. 82, 86, 28 A.2d 227 (E. & A. 1942); Longo v. Reilly, 35 N.J.Super. 405, 410, 114 A.2d 302 (App Div.1955). Cf. McCarthy v. State, 1 Utah 2d 205, 265 P.2d 387, 49 A.L.R.2d 1031 (1953); 30 Am.Jur. Judgments, §§ 208, 209 (1940). The dismissal order of March 13 did not determine any of the ultimate merits of the present tax controversy. The earlier complaints presented somewhat different issues and were dismissed because the trial court considered that in view of the March 11 pronouncement of the Supreme Court in Delaware, Lackawanna and Western R.R. Co. v. Neeld, supra, there was then no just occasion for the declaratory and injunctive relief being sought by the railroads from the Law Division. The municipalities' motions for dismissal had included a ground based on the doctrine of exhaustion of administrative remedies, but there is nothing in the record to suggest that the dismissals were in anywise rested on that ground. Although we are satisfied that Res judicata principles have no real pertinence, the appellants may of course urge here, as they did below, that the present complaints should be dismissed because the railroads failed to exhaust the administrative appeal which is admittedly available to them under R.S. 54:29A--31, N.J.S.A., and is actually pending before the Division of Tax Appeals.
The doctrine that a litigant must first exhaust his administrative remedies before he seeks judicial review is widely recognized and has been the subject of extended discussion. See Davis, Administrative Law 614 (1951); Parker, Administrative Law 117 (1952); Berger, 'Exhaustion of Administrative Remedies,' 48 Yale L.J. 981 (1939); Stason, 'Timing of Judicial Redress from Erroneous Administrative Action,' 25 Minn.L.Rev. 560 (1941); Comment, ...
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