Long Dock Co. v. State Bd. of Assessors

• Decision Date: 21 May 1909
• Citation: 78 N.J.L. 44,73 A. 53
• Parties: LONG DOCK CO. v. STATE BOARD OF ASSESSORS et al. MORRIS & ESSEX R. CO. v. SAME. CENTRAL R. OF NEW JERSEY v. SAME.
• Court: New Jersey Supreme Court

73 A. 53

78 N.J.L. 44

LONG DOCK CO.

v. STATE BOARD OF ASSESSORS et al.

MORRIS & ESSEX R. CO.

v. SAME.

CENTRAL R. OF NEW JERSEY

v. SAME.

Supreme Court of New Jersey.

May 21, 1909.

Certiorari by the Long Dock Company against the State Board of Assessors and others, and by Morris & Essex Railroad Company against the same defendants, and by the Central Railroad of New Jersey against the same defendants, to review certain assessments. Assessments set aside.

See, also, 65 Atl. 244; 75 N. J. Law, 120, 67 Atl. 672.

These writs of certiorari bring up for review the action of the State Board of Assessors in placing a valuation upon the terminal lands of the prosecutors in Jersey City and Hoboken under the supplement to the act for the taxation of railroad and canal property approved March 4, 1908 (P. L. p. 15).

There is one question that is raised by the reasons filed in each case the precise nature of which will be made to appear by a brief recital of antecedent legislation and adjudication.

In 1884 the original statute for the taxation of railroad and canal property was enacted, by the provisions of which all the property of these corporations was to be assessed for taxation; property not used for railroad purposes being made assessable by local assessors, and all property that was so used being made assessable by a State Board of Assessors, who were required in ascertaining the true value of such property to ascertain the value (1) of the main stem, (2) of other real estate used for railroad purposes, called "second-class railroad property," (3) of tangible personal property, and (4) of the franchise. The revision of this act in 1888 (P. L. p. 209) did not vary these requirements.

The duty thus imposed was performed by the State Board of Assessors uninterruptedly from 1884 to 1905, when, by the provisions of the so-called "Perkins act" (Act May 18, 1906 [P. L. p. 571]), such duty as to second-class railroad property was transferred to the local municipal assessors, who made such assessments for the years 1906 and 1907

On March 3, 1908, the Perkins act was declared to be unconstitutional (United N. J. R. R. Co. v. Parker, 75 N. J. Law, 771, 69 Atl. 239), and on the following day the Legislature passed the remedial act under which the valuations and assessments now before us were made by the State Board of Assessors. This supplement, after reciting the foregoing facts and the further fact that the time within which the State Board of Assessors might make a proper assessment had by reason of the premises expired, enacted that the time for the performance by the State Board of Assessors of their duty under the revised act of 1888 with respect to the valuation and assessment of second-class railroad property for the years 1906 and 1907 be extended, and that within such extended time such duty should be performed.

In their performance of this duty which, saving as to time, was precisely the original and normal duty imposed on such board by the revised act of 1888, the State Board of Assessors placed upon the terminal lands of the respective prosecutors the valuationsshown by the returns to these several writs of certiorari. These valuations are now attacked by each of the prosecutors upon the ground that as part of the taxing scheme in question they are in excess of the true value of said lands. The returns to these writs bring up the preliminary assessments and the objections thereto filed with the State Board of Assessors, together with the exceptions to the final determination of the board. Upon the questions of fact a voluminous mass of testimony taken before the State Board is returned, upon the weight of which, as well as upon the legal questions involved, counsel representing the prosecutors and the two taxing districts affected have presented comprehensive arguments both orally and by briefs prepared both before and after the oral argument.

Argued February term, 1909. before GARRISON, BERGEN, and VOORHEES, JJ.

William H. Corbin, for Long Dock Company.

William D. Edwards, for Morris & E. R. Co. George Holmes and R. V. Linda-bury, for Central R. Co.

Warren Dixon, for Jersey City. Horace W. Allen, for city of Hoboken.

GARRISON, J. (after stating the facts as above). From the testimony brought up by these writs, we find two facts touching the valuation placed by the State Board of Assessors upon the terminal lands of the respective prosecutors to review which these suits have been brought: First, that as to the lands of each of the prosecutors such valuation is in excess of the value such lands have in exchange for money, i. e., their market value. Second, that the valuation of such lands by the State Board of Assessors in so far as it is in excess of their market value is based upon and represents the value imparted to such lands by their actual use for railroad purposes under the franchises of the respective corporations so using them.

In view of these findings of fact, the pertinent legal questions are: First, what is the nature of the duty imposed upon the State Board of Assessors by the supplemental act of March 4, 1908? And, second, in the performance of the duty imposed by that supplement is the State Board of Assessors to value second-class railroad property at its market, i. e., its money exchange value, or are they to include in such valuation the additional value that is imparted to such property by reason of its use under the franchise of the company so using it?

The first of these questions is answered by the act itself, viz., that the duty it requires of the State Board of Assessors is that required by the provisions of subdivision 2 of section 3 of the revised act of 1888. There is no suggestion in the supplemental act that the State Board is to perform any other or different duties under the recited section of the revised act than such board would have performed in due course if the Perkins act had never been passed. The sole question therefore is whether or not, in the valuation of second-class railroad property under subdivision 2 of section 3 of the act of 1888, the State Board of Assessors is to include in and enhance such valuation by an additional value that is imparted to such property by the circumstance that it is used under a railroad franchise.

We think that the increase of value over and above its market value that is imparted to second-class railroad property by reason of its use under a railroad franchise should not be included in the valuation of such property by the State Board of Assessors under section 3, subd. 2, of the act of 1888, and that the opposite course would be directly contrary to the scheme of such act; in other words, that it is absolutely essential to the integrity of the taxing scheme of this act that the valuation placed upon tangible real property under subdivision 2 of section 3 of the act shall not include any element of value that is imparted to it by the intangible property, i. e., the franchise, that is to be valued under subdivision 4 of the same section. The reason for this is we think clear.

It is matter of political history that the paramount object sought to be attained by the act of 1884 for the taxation of railroad and canal property was the taxation of the franchises of these corporations, and it is apparent from an examination of the provisions of the act that its predominating purpose in such taxation was that the money derived from that particular source, i. e., the taxation of railroad and canal franchises, should go to the state for state purposes whatever disposition might be made of the money derived under the act from the taxation of the tangible real property of these corporations situated in the various taxing districts.

To meet these requirements the act of 1884 imposed upon property used for railroad and canal purposes a single tax in the distribution or apportionment of which, as between the state and the taxing districts, so much of the entire tax as represented the value of the franchise (and certain of the tangible property) was to go to the state by which such franchise had been granted, and so much as was based upon the real property situate in the taxing districts was to go to those...