City of Passaic v. Botany Mills, Inc.

• Decision Date: 11 February 1960
• Docket Number: No. A--20,A--20
• Citation: 158 A.2d 205,59 N.J.Super. 537
• Parties: CITY OF PASSAIC, a municipal corporation, Petitioner-Appellant, v. BOTANY MILLS, INC., Respondent-Respondent. and Division of Tax Appeals, Department of the Treasury, Respondent. . Appellate Division
• Court: New Jersey Superior Court — Appellate Division

Page 537

59 N.J.Super. 537

158 A.2d 205

CITY OF PASSAIC, a municipal corporation, Petitioner-Appellant, v. BOTANY MILLS, INC., Respondent-Respondent and Division of Tax Appeals, Department of the Treasury, Respondent.

No. A--20.

Superior Court of New Jersey Appellate Division.

Argued Jan. 18, 1960.

Decided Feb. 11, 1960.

William N. Gurtman, Passaic, for petitioner-appellant.

Nicholas Martini, Passaic, for respondent-respondent.

Before Judges GOLDMANN, CONFORD and HANEMAN.

The opinion of the court was delivered by

CONFORD, J.A.D.

The City of Passaic appeals from a judgment of the Division of Tax Appeals in the State Department of the Treasury, which affirmed judgments of the Passaic County Board of Taxation reducing personal property tax assessments of Botany Mills, Inc. for the tax years 1955 and 1956. That concern was engaged in the manufacture and distribution of woolens and worsteds in Passaic.

Passaic's assessors assessed the personal property of the taxpayer at $2,150,000 and $1,450,000 for the respective tax years, 1955 and 1956. On appeal the county board reduced the assessments to $1,333,600 for 1955 and $1,040,642 for 1956. The appeals having been heard De novo before the State Division we have only the transcript of proceedings there, not the record of what transpired before the county board.

Passaic's appeal to the Division of Tax Appeals was heard before a panel of two of its members. The city proved the recent previous assessment history of Botany's personalty as being the following:

1949-1951, incl.-- $2,400,000

1952 2,450,000

1953 and 1954 2,350,000

The city then called Alfred J. Greene, Jr., an assessor of the city when the assessments in question were made. He testified that he and two associates visited and inspected Botany's plant in December 1953 in preparation for the making of its 1954 personal property assessment, and discussed the value of the property with Mr. Shaddock, president of the company. The latter 'revealed values' of the 'prior year' of 'approximately $25 million' and 'currently approximately $21 million.'

In preparation for the making of the 1955 assessment Mr. Greene conferred with a Mr. Gerlack, the then designated representative of Botany for that purpose, in November or December 1954. Mr. Gerlack could not give the current values, as such, but told Mr. Greene and his associates that there had been a reduction of approximately 10% From the valuations of the prior year, 'or somewhere around $19 million,' on the basis of Mr. Shaddock's 1953 estimate of $21 million.

A discussion with Mr. Gerlack in 1955 preparatory to fixing the 1956 assessment, together with other information, 'developed that the values had been reduced by approximately one-third.'

A Mr. Galik, associated with the assessing department of the city, who had accompanied Mr. Greene on each of the inspection visits and participated in the conferences referred to by him, substantially corroborated the latter's testimony as to the admissions of value of the personal property by the taxpayer's representatives. Galik also gave detailed results of an examination made by him of the operational status of each of the manufacturing departments of the company for year-end 1955, as compared with previous year. Some of the operations had ceased by then. Substantially all manufacturing operations terminated some time during the calendar year 1956.

The city further proved that it mailed forms to the taxpayer for specification under oath of its taxable personal property for each of the applicable tax years and that these were not filled out and returned by the company.

The city offered no other proofs in support of its appeals, the taxpayer none in refutation. Instead, the taxpayer moved to dismiss the appeals on the ground that the city had 'failed to sustain the burden imposed by law to override the judgment of the County Tax Board.' The panel reserved decision on the motion. Thereafter it reported to the Division its finding that the city had 'failed to produce sufficient evidence to disturb the judgment below,' primarily for the reason that the city's witnesses had made no evaluation of the property nor professed any qualifications therefor. It recommended a dismissal of the appeals, and that recommendation was adopted by the Division, concordant judgments being entered in due course.

Tangible personal property is generally assessable at its true value as of the prior October first by the taxing district wherein situated. N.J.S.A. 54:4--1, 54:4--9. Personal property consisting of stocks in trade and materials used in manufacturing is assessable at the 'average of such personalty' during the twelve months preceding the assessing date or the portion thereof that the property was in the possession of the taxpayer. R.S. 54:4--11, N.J.S.A.

While it was clear that the city did not profess to assess Botany's personal property at anything approaching true value, it took the position, both by its assessors and counsel, that it did not employ any common or uniform ratio of assessment (below full true value) for personal property, either as to this taxpayer or generally. The taxpayer did not argue or contend to the contrary, nor is any issue relating thereto raised on this appeal. Nevertheless, the parties stipulated that the Division might fix its judgment at 20% Of such true value as the Division might find. This stipulation was a nullity. The city and the taxpayer are not at liberty to stipulate for assessments contrary to the lawful standard, whatever that may be. See consolidated Cigar Corp. v. Brunner, 133 N.J.L. 77, 42 A.2d 631 (Sup.Ct.1945); New Jersey Bell Telephone Co. v. City of Newark, 136 N.J.Eq. 479, 42 A.2d 629 (E. & A. 1945). The Division of Tax Appeals may not be guided by any standard other than the statutory criterion of true value in determining tax appeals except where the taxpayer, alleging discrimination, proves the existence and general use by the assessors of a particular common level or ratio of value for the kind of property in question and the subjection of the property of the appealing taxpayer to a discriminatory assessment above that level. Gibraltar Corrugated Paper Co. v. North Bergen Tp., 20 N.J. 213, 119 A.2d 135 (1955); Jat Company, Inc. v. Division of Tax Appeals, 47 N.J.Super. 571, 136 A.2d 666 (App.Div.1957), certification denied 27 N.J. 278, 142 A.2d 262 (1958); and see In the Matter of the Appeals of Kents 2124 Atlantic Ave., Inc., 31 N.J. 266, 156 A.2d 700 (1959). As this is here neither charged nor shown the determination of this appeal must be founded upon the predicate that the Division was controlled by the statutory standard of full true value in dealing with the appeals before it.

We are thus brought to consideration of the question as to whether the proofs adduced by the city before the Division were sufficient to withstand the motion to dismiss its appeals. There is a presumption of correctness of a municipal tax assessment, and this extends to the judgment of the county board of taxation affirming an assessment on appeal. Meltzer v. Division of Tax Appeals, 134 N.J.L. 510, 48 A.2d 842 (Sup.Ct.1946). 'But it is the settled rule that this presumption is not in itself evidence, and its legal procedural consequences vanish in the face of substantial and trustworthy evidence Contra that goes uncontradicted.' Ibid. (134 N.J.L. at page 512, 48 A.2d at page 843). In a case where the court was considering the sufficiency of evidence adduced by a taxing district on an appeal to the Division from a reduction of an assessment by the county board of taxation it stated the rule as follows: 'The weight of the presumption so accorded the assessment or judgment of the county board is overcome where, on the hearing De novo on appeal, the appellate tribunal is presented with sufficient competent evidence to determine the true valuation of the property.' Riverview Gardens Section One v. North Arlington Borough, 9 N.J. 167, 175, 87 A.2d 425, 428, (1952). Taking the two statements just quoted, together, a complete and theoretically justifiable general standard is set forth for appraising the sufficiency of the proof adduced on appeal to the Division of Tax Appeals to meet the presumption of...