Frater Corp. v. State Division of Tax Appeals

• Decision Date: 03 October 1963
• Docket Number: No. A--559,A--559
• Citation: 80 N.J.Super. 427,194 A.2d 11
• Parties: FRATER CORPORATION, Appellant, v. STATE of New Jersey, DIVISION OF TAX APPEALS, Department of the Treasury and City of Newark, Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 427

80 N.J.Super. 427

194 A.2d 11

FRATER CORPORATION, Appellant, v. STATE of New Jersey, DIVISION OF TAX APPEALS, Department of

the Treasury and City of Newark, Respondents.

No. A--559.

Superior Court of New Jersey

Appellate Division.

Argued Sept. 16, 1963.

Decided Oct. 3, 1963.

Milton Lowenstein, Newark, for appellant (Kristeller, Zucker, Lowenstein & Cohen, Newark, attorneys).

Saul A. Wolfe, Newark, for respondent City of Newark (Norman N. Schiff, Corp. Counsel of City of Newark, attorney, Saul A. Wolfe, Newark, of counsel and on the brief).

Arthur J. Sills, Atty. Gen., attorney respondent Div. of Tax Appeals, filed a statement in lieu of brief pursuant to R.R. 1:7--4(b) (Alan B. Handler, Newark, of counsel).

Before Judges GAULKIN, LEWIS and LABRECQUE.

The opinion of the court was delivered by

LABRECQUE, J.S.C. (temporarily assigned).

Frater Corporation appeals from a judgment of the Division of Tax Appeals determining the assessment on its real property designated as 837--839 Broad Street, Newark, New Jersey, for the year 1961.

For the year in question Frater had appealed to the Essex County Board of Taxation from an assessment of land, $104,400; improvements, $23,300; total, $127,700. The County Board affirmed. An appeal to the Division of Tax Appeals resulted in a reduction to land, $86,000; improvements, $17,400; total, $103,400, based upon a finding that the true value of the property was $172,000; improvements, $34,700; total, $206,700. The parties agree that a 50% Common level was applicable for the year in question. The appeal to us seeks a reversal of the Division's refusal to grant a greater reduction.

The matter was heard before a single member of the Division pursuant to N.J.S.A 54:2--41.1. At the hearing no witnesses were called, the parties stipulating that the case should be determined on the basis of the written appraisals prepared by the experts for the taxpayer and the city. The attorney for the city also requested the commissioner hearing the case to take into consideration the Division's decision in the 1959 case involving the same property.

In 1959 the same premises had been assessed at land, $122,000; improvements, $25,000; total, $147,000. On appeal to the county board, a reduction to land, $97,500; improvements, $25,000; total, $122,500, was ordered. The city's appeal to the Division resulted in an affirmance. Since the common level for 1959 appears to have been 70%, the reduced assessment for that year was apparently premised upon a total true value of $175,000.

The property under appeal consisted of a commercial plot located between Branford Place and William Street, having a frontage on Broad Street of 45 feet, a depth of 171 feet and a rear frontage of 44 feet on Treat Place. The improvements consisted of two contiguous buildings, the first and more modern one, which fronted on Broad Street, being two stories in height and 60 feet deep, and the second or older building, fronting on Treat Place, being four stories high and 88 feet deep. The upper floors of the latter were not being utilized on the assessing date, but the ground floor had been altered and was being used as a workroom for one of the Broad Street tenants.

In the 1959 appeal the commissioner who heard the case held that the 45 feet of Broad Street frontage had a value of $2800 per front foot, or $126,000; that the land fronting on Treat Place had a value of $7700, and that the fair rental value of the premises was $30,300 annually as of the assessing date (October 1, 1958). The same commissioner heard the 1961 appeal. While he found the rental value to be the same, he determined that the parcel should be valued as a unit and that, so regarded, it had 61 1/2 effective front feet on Broad Street which he valued at $2800 per foot, or $172,000. The difference between the Division's land valuation in 1959 and that currently under appeal is asserted by the appellant to be the result of an arbitrary and improper method utilized by the commissioner in arriving at the 1961 value. Appellant contends that since the unit-foot value was the same for both years and the common level for 1961 was conceded to be 50%, the land assessment should have been reduced to 50% Of the 1959 land value, or $66,850. The assessment for the improvements is not in dispute.

A hearing before the Division of Tax Appeals is a De novo one in which the ultimate fact to be found is the true value of the property under appeal. Passaic v. Gera Mills, 55 N.J.Super. 73, 150 A.2d 67 (App.Div.1959), certification denied, 30 N.J. 153, 152 A.2d 171 (1959). This determination frequently calls for the testimony of experts in the field of land valuation. The task of coordinating and evaluating such testimony has been expressly committed to the Division. The weight to be accorded to the testimony of such experts is a matter left to the reasonable judgment of the Division, and that judgment, when supported by substantial evidence, will not be disturbed. Weston Electrical Instrument Corp. v. Newark, 11 N.J.Super. 493, 496, 78 A.2d 592 (App.Div.1951); Passaic v. Gera Mills, supra, 55 N.J.Super. at p. 89, 150 A.2d at p. 75.

The appellant argues that the method utilized in arriving at the value of its land was arbitrary and improper because it did not follow the method provided by Rule 10 contained in the Real Property Appraisal Manual for New Jersey Assessors (1955). Said Rule 10 provides:

'BUSINESS THROUGH LOT

To find the value of a through lot with two street fronts, compute from the high-value street to the standard depth or from half the depth whichever is greater and from the low-value street for the remaining depth, and add together for the total value.'

The manual in question was issued by the Local Property Tax Bureau of the Division of Taxation on December 1, 1955 and contains extensive data applicable to the assessment of real property. It bears the following foreword:

'This real property manual is for the guidance of those whose duty it is to apportion fairly the very heavy burden of proper taxes in New Jersey.

It is universally recognized that there is no substitute for a good initial assessment, one resulting from the exercise of sound judgment by a person qualified to make it, uninfluenced by personal considerations or political expediencies. * * *

Primarily, the fair apportionment of the burden of local taxes is the responsibility of the assessor. This manual has been prepared in the belief that it will assist him in the discharge of his difficult task of valuing, on a sound and uniform basis, the many types of real property to be found in his district. * * *'

It is conceded that the Local Property Tax Bureau is a department of the Division of Taxation, N.J.S.A 54:4--26 requires assessors to follow such forms and methods as may be prescribed by the Director of the Division of Taxation, including, without limitation, a listing of the use of each parcel assessed, the taxable value of the land, of the buildings and improvements separately on each parcel, and the sum of...