Rek Inv. Co. v. City of Newark

• Decision Date: 17 October 1963
• Docket Number: No. A--462,A--462
• Parties: REK INVESTMENT COMPANY, Petitioner-Appellant, v. The CITY OF NEWARK, Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 552

80 N.J.Super. 552

194 A.2d 368

REK INVESTMENT COMPANY, Petitioner-Appellant, v. The CITY OF NEWARK, Respondent.

No. A--462.

Superior Court of New Jersey

Appellate Division.

Argued Sept. 9, 1963.

Decided Oct. 17, 1963.

Jack Okin, Newark, for petitioner-appellant (Okin & Okin, Newark, attorneys).

Saul A. Wolfe, Newark, for respondent City of Newark (Norman N. Schiff, Corp. Counsel of City of Newark, attorney).

Arthur J. Sills, Atty. Gen., for respondent Division 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).

Rek Investment Company appeals from a judgment of the Division of Tax Appeals fixing the assessment on its real property at 756--62 Broad Street, Newark, for the year 1961.

For the year in question Rek had appealed to the Essex County Board of Taxation from an assessment of land, $268,900; improvements, $45,700; total: $314,600. The county board reduced the assessment to land, $215,500; improvements, $17,500; total: $232,500. Rek thereupon sought a further reduction by appealing to the Division of Tax Appeals. No cross-appeal was filed by the city, although it was the appellant in a companion appeal involving the 1960 assessment on the same parcel, made when it was owned by Rek's grantor. The appeals were tried together and the Division determined that the true value of the property for each year was $525,900. Based upon an agreed common level of 50%, judgment was entered increasing the assessment for 1961 to land, $248,000; improvements, $15,000; total $263,000. The present appeal was then filed. An appeal to this court involving the 1960 assessment was also filed but was subsequently withdrawn.

Briefly stated, Rek contends that the Division was without jurisdiction to increase the assessment and that it was bound by the price at which the property had been sold to it just prior to the beginning of the tax year. Additionally, it asserts that a key factual finding was not supported by the evidence.

Rek first urges that upon an appeal to the Division of Tax Appeals by a taxpayer who has been successful before the county board but seeks a further reduction in its assessment, the Division is without jurisdiction to increase the assessment in the absence of a cross-appeal seeking such relief. Since there was no such cross-appeal here, it argues that the Division was limited to granting a further reduction or affirming the county board.

With this conclusion we are unable to agree. It is true that the Division of Tax Appeals is a statutory tribunal and may proceed only in the manner permitted by law. City of Passaic v. Gera Mills, 55 N.J.Super. 73, 94, 150 A.2d 67 (App.Div.1959), certification denied 30 N.J. 153, 152 A.2d 171 (1959). But it is likewise clear that the Division is the body charged with the obligation to hear and determine appeals from county boards of taxation. N.J.S.A. 54:2--33. To accomplish this task, it is vested with power to determine the true value of real property and to fix the assessment thereof, based upon true value or the common level of assessments to true value in the municipality. N.J.S.A. 54:4--2.25; 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, 581, 136 A.2d 666 (App.Div. 1957).

We presume that the appeal before us was filed under N.J.S.A. 54:2--39, which applies to appeals by one who was an appellant before the county board. It reads, in part, as follows:

'Any appellant who is dissatisfied with the judgment of the county board of taxation upon his appeal may appeal from that judgment to the Division of Tax Appeals in the Department of the Treasury by filing a petition of appeal to the division, in manner and form to be by said division prescribed, on or before December 15 following the date fixed for final decisions by the county boards, and the division shall proceed summarily to hear and determine all such appeals and render its judgment thereon as soon as may be.'

However, it may have been filed pursuant to N.J.S.A. 54:2--35, which permits appeals from county board determinations by parties affected. It provides as follows:

'Any action or determination of a county board of taxation may be appealed for review to the Division of Tax Appeals in the State Department of Taxation and Finance, under such rules and regulations as it may from time to time prescribe, and It may review such action and proceedings and give such judgment therein as it may think proper.' (Emphasis added)

Both of the quoted statutes are of long standing. The predecessor of the Division of Tax Appeals interpreted its powers thereunder in the following language 'Under either or both of these sections, the action of the county board, viewed either as an affirmance of the assessments, or as a dismissal of the appeals, was appealable to this board, and an appeal brings the entire assessment, De novo, before this board, and not merely any special aspect thereof to which the county board may have confined its attention. * * *' Pope v. Borough of Red Bank, 19 A.2d 208, 210, 19 N.J.Misc. 383, 385 (Div. of Tax Appeals, 1940).

Under the Division's rules, a petition of appeal from a county board of taxation to the Division may not fix any sum as the value of the property under appeal but must contain a general prayer that the assessment be increased or decreased to the true value thereof. Rule 16:8--6.140(d) (Rules of Division of Tax Appeals, 1959). If discrimination is alleged, the common level of assessments to true value must be set forth with a general prayer that the assessment be increased or decreased to the common level of assessments. Id.

The hearing before the Division of Tax Appeals is a De novo one in which the ultimate fact sought to be determined is the full and fair value of the property. City of Passaic v. Gera Mills, supra, 55 N.J.Super., Super., at p. 83, 150 A.2d at p. 72; N.J.S.A. 54:4--23. Where assessments in a municipality are not at full value, it also becomes the duty of the Division to determine the common level. In re Appeals of Kents 2124 Atlantic Ave., Inc., 34 N.J. 21, 166 A.2d 763 (1961).

The duty thus cast upon the Division cannot be circumscribed by the manner in which the appellate elects to word its petition of appeal. Upon the filing of a real property appeal, the amount of the assessment, whether based upon true value or the common level, is placed in issue. The prior action of the county board, while entitled to a presumption of correctness, North Bergen Twp., Hudson County v. Dieckmann's Estate, 37 N.J.Super. 221, 117 A.2d 190 (App.Div.1955), does not attain the status of a 'floor' or 'ceiling' beyond which the assessment cannot be fixed. Once the presumption is overcome, the Division must appraise the conflicting testimony and make a determination. Id., 37 N.J.Super. at p. 223, 117 A.2d at p. 191. It would be inconceivable that having determined true value it would find its hands tied because the appellant asked for a Reduction to true value, whereas, to achieve that desirable result, an Increase was necessary.

In Hackensack v. Rubinstein, 37 N.J. 39, 178 A.2d 625 (1962), our Supreme Court held that upon an appeal to the Division to increase an assessment which had been filed pursuant to N.J.S.A. 54:2--35, a cross-appeal was not necessary in order to vest the Division with authority to entertain the charge that the assessment was already too high and should be reduced. We are not impressed with the appellant's suggestion that the court's action referred to was prompted by and depended upon the fact that the taxpayers had received tardy notice of the city's appeals and hence had been unable to file cross-appeals. On the contrary, the court specifically held:

'* * * But this (lapse of time for appeal) fact does not preclude presentation or consideration of their assertions at the Division hearing. Once the Division obtains jurisdiction, '(r)eview of assessed valuation, by a hearing De novo, is * * * (its) principal function * * * in individual tax appeals. On such review the true value of the subject property is the ultimate factual finding.' * * *.' (37 N.J., at p. 52, 178 A.2d, at p. 631; insert added)

By the same reasoning we hold that on the taxpayer's appeal for a further reduction pursuant to N.J.S.A. 54:2--39, notwithstanding the absence of a cross-appeal the Division had jurisdiction to increase the assessment appealed from where such action was necessary to bring the assessment to equalized true value. Cf. Delaware L. & W.R. Co. v. City of Hoboken, 10 N.J. 418, 91 A.2d 739 (1952); N.J.S.A. 54:29A--33.

It is next urged that the Division acted arbitrarily and illegally in determining the true value of the subject premises to be $525,900, in view of the sale of the premises to Rek in 1960 for $425,000. In short, it contends that since there was an actual Bona fide sale, the sale price and binding upon the assessor and hence upon the Division.

N.J.S.A. 54:4--23 provides:

'All real property shall be assessed to the person owning the same on October 1 in each year. The assessor shall ascertain the names of the owners of all real property situate in his taxing district, and after examination and inquire, determine the full and fair value of each parcel of real property situate in the taxing district at such price as, in his judgment, it would sell for at a fair and bona fide sale by private contract on October 1 nest preceding the date on which the assessor shall complete his assessments, as hereinafter required. * * *'

On October 1, 1960 the property in question was owned by The Fannie E. Rippel Foundation. Pursuant to a contract made in the spring of...