Hackensack Water Co. v. Twp. of N. Bergen

• Decision Date: 22 October 1940
• Parties: HACKENSACK WATER CO. v. TOWNSHIP OF NORTH BERGEN.
• Court: New Jersey Supreme Court

15 A.2d 899

18 N.J.Misc. 627

HACKENSACK WATER CO.

v. TOWNSHIP OF NORTH BERGEN.

New Jersey State Board of Tax Appeals.

Oct. 22, 1940.

Syllabus by the Board.

1. Assessments are presumably correct, in that it is incumbent upon the taxpayer to come forward with proofs to the contrary. Where such proof outweighs in probative force any rebutting evidence adduced by the taxing district, the assessment will be modified accordingly.

2. Where there is an unexplained substantial increase in the assessment of specific property for a particular year, together with proof of no concomitant change in the true value of the property, the presumption of correctness of the assessment is dissipated.

3. An assessor is generally competent to testify as to the value of property within his taxing district, but the probative weight of his testimony as to the true value thereof is negligible, where he has had no experience whatever in the building, maintenance, or repair of such property, or in the purchase or sale thereof.

4. In valuing the tangible personalty of a waterworks company occupying public streets and places by virtue of municipal or state permission, upon the basis of its reconstruction cost, no increment in such value should be taken which might reflect the value of the franchise of the company, since such franchise is subject to taxation exclusively under P.L.1938, Ch. 7, N.J.S.A. 54:31-15.1 et seq, and not by the taxing districts directly.

Proceedings by the Hackensack Water Company against the Township of North Bergen, in the matter of applications for reduction of assessments upon personal property for the years 1938, and 1939. From a judgment of the Hudson County Board of Taxation dismissing the applications, petitioner appeals.

Judgment reversed, and assessments ordered reduced in accordance with opinion.

Milton, McNulty & Augelli, and John Milton and Joseph Keane, all of Jersey City, for petitioner.

Nicholas S. Schloeder, of Union City, for respondent.

QUINN, President.

Petitioner operates a large water distribution system in the northeastern area of the state, its reservoirs and pipelines being spread throughout many municipalities. These appeals involve the determination of the true value of the personal property of the company situate in the respondent taxing district on October 1, 1937, and October 1, 1938.

The assessment for each of the tax years in question was made by the taxing authorities at $1,500,000. Appeals for a reduction thereof were dismissed by the Hudson County Board of Taxation.

Before proceeding to a detailed consideration of the proofs, we refer briefly to the principles which must control us in appraising them. The assessments enjoy the presumption of correctness not in any substantive sense, but merely in the aspect of making it incumbent upon the taxpayer to adduce proofs of value, which in turn must be met by countervailing proofs by the city sufficient to outweigh those of the petitioner, if the assessment is to be sustained. New Jersey Bell Telephone Co. v. City of Camden, Sup.Ct.1939, 122 N.J.L. 270, 4 A.2d 705.

The proofs before us must be appraised, furthermore, with respect to their evidentiary value upon the issue as to the true value of the property in question, in the statutory sense, i. e, upon the criterion as to the price in money which a willing seller could obtain for the property from a willing buyer at a fair sale as of the assessing date, under private contract. Turnley v. Elizabeth, Sup.Ct.1908 76 N.J.L. 42, 68 A. 1094; Universal Insurance Co. v. State Board of Tax Appeals, Sup.Ct.1937, 118 N.J.L. 538, 193 A. 915. And this standard has been held applicable to the valuation of tangible personalty in use for utility purposes, as herein. New Jersey Bell Telephone Co. v. Newark, Sup.Ct.1937, 118 N.J.L. 490, 193 A. 844, affirmed, Ct. of Errors and Appeals 1940, 124 N.J.L. 451, 12 A.2d 675; New Jersey Bell Telephone Co. v. Camden, supra.

In the present case, the usually applicable presumption of correctness of the assessment, in the limited sense noted above, is dissipated because of the rise in the assessment of the property from a valuation of $1,050,000 in the years preceding the tax years now under appeal, to the figure of $1,500,000 under attack in these proceedings, unexplained by anything in respondent's proof. Skouras Theatres Corporation v. State Board of Tax Appeals, Sup.Ct.1939, 123 N.J.L. 52, 8 A.2d 72; New Jersey Bell Telephone Co. v. Camden, supra, 122 N.J.L. at pages 272, 274, 4 A.2d 705. There is positive proof herein, adduced by petitioner and unrebutted by the taxing district, that there was no substantial change in the value of the property for the years 1938 and 1939, from that of the years immediately preceding.

Petitioner offered specific expert testimony as to the true value of its tangible personalty through Mr. Emile J. Fricker, assistant to the president of the company, whose testimony as to the reproduction cost of the property is fortified by thirty-two years of association with the company, and the attendant experience with the actual building, replacement, and repair of a substantial part of petitioner's system. Moreover, this witness was qualified at the hearing as particularly expert in the waterworks industry by reason of his activity in the national...