City of Hoboken v. State Bd. of Tax Appeals

• Decision Date: 25 July 1941
• Docket Number: No. 222.,222.
• Parties: CITY OF HOBOKEN v. STATE BOARD OF TAX APPEALS et al.
• Court: New Jersey Supreme Court

21 A.2d 348

127 N.J.L. 179

CITY OF HOBOKEN

v. STATE BOARD OF TAX APPEALS et al.

No. 222.

Supreme Court of New Jersey.

July 25, 1941.

Certiorari by the City of Hoboken against the State Board of Tax Appeals and the Hoboken Dock Company to review a judgment of the State Board of Tax Appeals in regard to assessment against the Hoboken Dock Company.

Determination of the State Board reversed, and judgment directed entered in conformity with opinion.

Argued January term, 1941, before CASE, DONGES, and HEHER, JJ.

John J. Fallon, of Hoboken (Frank P. McCarthy, of Jersey City, of counsel), for prosecutor.

Peter Bentley, of Jersey City (Herbert Clark Gilson, of Summit, of counsel), for defendant Hoboken Dock Co.

HEHER, Justice.

Concededly, the State Board of Tax Appeals erred in not including in the assessable tangible property cash on hand in the sum of $9,524.36. Ch. 165 of the Laws of 1933, Pamph.L. p. 346, N.J.S.A. 54:4-3.23, does not warrant the claimed exemption. City of Newark v. State Board of Tax Appeals, 118 N.J.L. 131, 191 A. 843.

The remaining question is whether the defendant corporation is entitled, under R.S. 1937, 54:4-14, N.J.S. 54:4-14, to a deduction of $65,000, as an outstanding obligation for moneys loaned to it by the First National Bank of Jersey City, and secured by Treasury Discount Bills issued by the United States, for which exemption from taxation was claimed and allowed. The issue was submitted to the State Tax Board on a stipulation of facts; and the conclusion was that there was no factual basis to the allegation that "the debt was incurred for the purpose of reducing respondent's taxes," and that, even if there were, there was no indication of bad faith "in the incurring of the debt * * * or in the purchase of the treasury bills," and the case of City of Hoboken v. State Board of Taxes and Assessments, 107 N.J.L. 35, 151 A. 364, affirmed Board of Com'rs of City of Hoboken v. State Board of Taxes, 108 N. J.L. 195, 156 A. 377, was controlling.

There is a preliminary procedural question presented for consideration. Depositions were permissible under the allocatur; and prosecutor adduced evidence on the issue thus arising. The property owner maintains that the taxing district should not now be heard on "the issue of an alleged fraud when that issue was not raised" below. The point is untenable.

The validity of the claimed deduction was mooted before the State Board, and decided; and, under R.S.1937, 2:81-8, N.J.S.A. 2:81-8, prosecutor was at liberty to adduce evidence here bearing upon that question. And it is now the duty of this court to make its own independent findings of fact upon all the evidence, and to adjudge accordingly. The statutory scheme plainly permits a full development of the facts in this court and a determination in consonance therewith, regardless of what has been done below. Royal Manufacturing Co. v. Rahway, 75 N. J.L. 416, 67 A. 940; Central R. R. Co. v. State Tax Department, 112 N.J.L. 5, 15, 169 A. 489; Atlantic City v. State Board of Tax Appeals, 123 N.J.L. 464, 9 A.2d 702.

This brings us to the consideration of the substantive question; and on this prosecutor is entitled to prevail. These are the undisputed facts: The assessment date was October 1, 1937. On the prior September 20th, when the Dock Company had a bank deposit of $14,000, it procured the loan of $65,000 from the named bank on its promissory note payable December 20, 1937, with interest at the rate of 1 1/2% per annum, and immediately devoted the proceeds to the purchase, through the bank, of United States Treasury Bills in the principal sum of $75,000, maturing on December 1, 1937, which were retained by the bank as security for the note....