Delaware, L. & W. R. Co. v. City of Hoboken

• Court: New Jersey Superior Court — Appellate Division
• Writing for the Court: BIGELOW
• Citation: Delaware, L. & W. R. Co. v. City of Hoboken, 85 A.2d 200, 16 N.J.Super. 543 (N.J. Super. App. Div. 1951)
• Decision Date: 10 December 1951
• Docket Number: A--220,Nos. A--216,A--219,A--217,s. A--216
• Parties: DELAWARE, L. & W.R. CO. v. CITY OF HOBOKEN et al.

Page 543

16 N.J.Super. 543

85 A.2d 200

DELAWARE, L. & W.R. CO. v. CITY OF HOBOKEN et al.

Nos. A--216, A--217, A--219, A--220.

Superior Court of New Jersey, Appellate Division.

Argued Sept. 17, 1951.

Decided Dec. 10, 1951.

Raymond J. Lamb, Jersey City, argued the cause for the appellant and respondent, Delaware, L. & W.R. Co. (Markley & Broadhurst, Jersey City Attorneys; Edward A. Markley, Jersey City, and Donald R. Creighton, Hoboken, of counsel).

Milton B. Conford, Newark, argued the cause for respondents and cross-appellants, City of Hoboken and City of Jersey City (Dominick J. Marrone, Hoboken, attorney for City of Hoboken; John B. Graf, Jersey City, corporation counsel and attorney for City of Jersey City).

Benjamin C. Van Tine, Trenton, argued the cause for the State (Theodore D. Parsons, Atty. Gen.).

Before Judges JACOBS, EASTWOOD and BIGELOW.

BIGELOW, J.A.D. (for the court, and also dissenting in part).

In the greater part of this opinion I have the honor to speak for a unanimous court, but at the very end, and that is the most important part, my role becomes one of dissent. The dissent will be plainly designated in order that there may be no uncertainty in that regard.

This matter is before us on cross-appeals from the action of the Division of Tax Appeals settling the assessment of second-class railroad property of the Delaware, Lackawanna & Western Railroad Company lying in Hoboken and Jersey City. The Director of the Division of Taxation, pursuant to the Tax Law of 1948, L.1948, c. 40, §§ 8 and 9; N.J.S.A. 54:29A--17 and 18, assessed the property at $16,011,234. Both the taxpayer and the cities, dissatisfied, appealed to the Division of Tax Appeals, where the assessments were increased by $1,823,393 to $17,834,627. And now the parties are here. Before going at all into the facts, certain questions of law propounded to us may be considered.

The railroad company urges that the valuation found by the Director of the Division of Taxation is still presumably correct, despite the determination by the Appeals Division. The argument is based principally on a provision of the Railroad Tax Act of 1948 which empowers the Director (who in this respect has succeeded to the powers of the State Tax Commissioner) and anyone who is 'delegated by him to value and assess property in railroad use,' 'to use his personal knowledge and judgment as to the value of any property which he is required to assess, upon original assessment or upon review thereof.' N.J.S.A. 54:29A--67. (The review mentioned at the end of the passage is a review by the Director of his own assessment, and not a review thereof by some other authority or tribunal, such as the Division of Tax Appeals.) This authority of the Director--but not of his delegate--to use his personal knowledge and judgment, had been possessed by his predecessors in the function of assessing railroad lands since 1884. L.1884, p. 142, §§ 15 and 20. It is in substance the same as the authority of local assessors to use their knowledge and judgment in valuing taxable property under the General Tax Law. R.S. 54:4--23, N.J.S.A.; State v. Metz, 31 N.J.L. 378 (Sup.Ct.1865); State v. Tindall, 36 N.J.L. 97 (Sup.Ct.1872). And see 61 C.J., Taxation, § 790, p. 640. When the assessment of the township or other local assessor is reviewed on certiorari, the assessment is presumed to be correct and the objector has the burden of proving otherwise. State v. Abbott, 42 N.J.L. 109 (Sup.Ct.1880). It has been said that the proofs must show 'a clear error' in the valuation or the assessment will be upheld. Estell v. Hawkens, 50 N.J.L. 122, 11 A. 265 (Sup.Ct.1887). Likewise, there is a strong presumption that the assessment of railroad lands made by the Director is correct, when it is the subject of appeal or certiorari. Central R.R. Co. v. State Board, 4. N.J.L. 1, 7 A. 306 (Sup.Ct.1886); Long Dock Co. v. State Board, 82 N.J.L. 21, 81 A. 568 (Sup.Ct.1911) affirmed Long Dock Co. v. Strong, 84 N.J.L. 762, 88 A. 1103 (E. & A.1913). Although it has frequently been said that the great weight given to the valuation made by the Director--or his predecessors--is the result of his power to use his personal knowledge, we incline to believe that the true reason is the broad experience the Director and his staff have had in the feld of valuation of railroad properties. When we recall that the railroads which the Director must assess extend into every county and even into every considerable municipality of the State, it is evident that the personal knowledge of the Director plays a small part in his assessments, compared with the role of personal knowledge of municipal assessors.

But the assessment that we are called upon to review is not that of the Director; the assessment before us is the one made by the Division of Tax Appeals, and that is the assessment now presumed to be correct. Kearny v. Board of Equalization, 81 N.J.L. 106, 78 A. 1050 (Sup.Ct.1911); Colonial Life Ins. Co. v. State Board, 126 N.J.L. 126, 18 A.2d 625 (Sup.Ct.1941). This is in accordance with the principle that the burden is always on an appellant to show that the judgment of which he complains is erroneous. Donofrio v. Haag Bros., Inc., 10 N.J.Super. 258, 77 A.2d 42 (App.Div.1950); McGowan v. Peter Doelger Brewing Co., 10 N.J.Super. 276, 77 A.2d 46 (App.Div.1950). We go one step further. The question before us is not whether the Appeals Division gave sufficient weight to the appraisal of the Director. The question put to us by the Legislature is whether the final determination of the Appeals Division, in respect to the assessment, is 'illegal, excessive, insufficient, or that there has been illegal discrimination in the assessment.' If it is so made to appear, we 'correct, adjust and equalize such assessment and tax or refer same back' to the Director. L.1941, c. 291, § 37; N.J.S.A. 54:29A--37. The valuation of the Appeals Division must be sustained unless the evidence preponderates against it.

Before turning to our next topic, we would mark the differing natures of the actions of the Director and of the Division of Tax Appeals. The action of the Director is strictly administrative. He makes his assessment without notice to the taxpayer and without taking evidence, although he will review the assessment at the request of the taxpayer. N.J.S.A. 54:29A--18; L.1948, c. 40, § 9. But this review is 'a mere revision and not an appellate review.' Tuckerton R.R. Co. v. State Board, 75 N.J.L. 157, 67 A. 69, 70 ( Sup.Ct.1907). By contrast, the proceeding before the Appeals Division is judicial in nature and in method. The party aggrieved by the assessment of the Director files a complaint, a hearing on notice is had, proofs are submitted, and a determination of the appeal is made, based upon the evidence which has been submitted to the Appeals Division. The proceeding is a trial De novo. There is no room here for the undisclosed personal knowledge of the Director or of members of the Division. The determination must be supported by the record. Giordano v. City Commission, 2 N.J. 585, 67 A.2d 454 (1949). Until 1933, when an administrative appeal was first provided (L.1933, c. 305, § 2; R.S. 54:26--7, N.J.S.A.), the assessment made by the State Board of Assessors, or whatever might be the title of the administrative body charged with assessing railroad lands, was reviewed in the first instance in the Supreme Court on certiorari. There the assessment was accorded great weight, as we have pointed out--more weight probably than is now given to the determination of the Appeals Division, although that determination is presumed to be correct. In the instant case, only half of the members of the Division--those constituting the panel--heard the witnesses and the oral arguments of counsel; the other members of the Division had to rely on the typewritten transcript and briefs. We have before us all the proofs that were before the Division and in a form more convenient for study. But there seems to be no necessity for, and no advantage to be gained by, attempting to measure the strength of the presumption in favor of the assessment made by the Appeals Division.

The attorney General, intervening in behalf of the railroad appellants, argues that it was a prerequisite to a determination by the Division of Tax Appeals that they take the testimony of the Director in order to learn what was the basis of his valuation; that since neither of the parties produced the Director as a witness, the Division, on their own motion, should have taken his testimony. The testimony of the Director as to material facts within his own knowledge might have been presented to the Appeals Division, just as the testimony of a juror in a negligence case may be taken if it so happens that he saw the accident that is the subject of the trial. State v. Langhans, 94 N.J.L. 17, 110 A. 566 (Sup.Ct.1919), Id., 95 N.J.L. 213, 112 A. 191 (E. & A.1920). So the Director, if he personally examined the property of the railroad, could testify to what he saw; if he was cognizant of any sales of comparable properties, he might testify about the sales. As a witness to facts relevant to the fair value of the property, he would be on the same footing as any other witness and the admissibility of his testimony would be governed by the same rules. But the Director could not be questioned as to the operation of his mind in valuing the property--what factors were considered by him, what weight he gave them, what inferences he drew, and how he reached his conclusions. Long Dock Co. v. State Board, 86 N.J.L. 592, 597, 92 A. 439 (E. & A.1914); Chicago B. & Q.R.R. Co. v. Babcock, 204 U.S. 585, 27 S.Ct. 326, 51 L.Ed. 636 (1907). There is no indication that the Director had any knowledge that might properly have been the subject of testimony by him before the Division of Tax Appeals. If either litigant before the Appeals Division surmised that the Director had such knowledge, doubtless he...