State Bd. of Assessors v. State

• Decision Date: 29 May 1886
• Citation: 4 A. 578,48 N.J.L. 146
• Parties: STATE BOARD OF ASSESSORS v. STATE. (CENTRAL R. R. OF N. J. and others, Prosecutors.)
• Court: New Jersey Supreme Court

4 A. 578

48 N.J.L. 146

STATE BOARD OF ASSESSORS

v. STATE. (CENTRAL R. R. OF N. J. and others, Prosecutors.)¹

Court of Errors and Appeals of New Jersey.

May 29, 1886.

On error from supreme court.

The Attorney General and Messrs. Gummere and Collins, for plaintiff in error.

Messrs. De Forrest, Kaercher, Gowen, Williamson, Bedle, Robeson, McArthur, McCarter, and Drake, for defendants in error.

RUNYON, Ch. The judgments of the supreme court which are brought up for review by the proceedings in these cases set aside and annul, as being entirely void, the assessment and tax levied upon the respective defendants, under the act "for the taxation of railroad and canal property," approved April 10, 1884. P. L. 1884, p. 142. The ground upon which those judgments are based is that the act is in contravention of the constitutional requirement adopted in the amendments of 1875, that "property shall be assessed for taxes, under general laws and by uniform rules, according to its true value." The act, after providing that all the property of any railroad or canal company not used for railroad or canal purposes shall be assessed and taxed by the same assessors, and in the same manner, and at the same rate, as the taxable property of other owners in the same municipal division or taxing district, creates a state board of assessors to assess all the property of railroad and canal companies used for railroad or canal purposes, including their franchises; and directs that the board shall ascertain the true value of such property, and that in so doing they shall ascertain separately—First, the length and value of the main stem of each railroad, and of the water-way of each canal, and the length of such main stem and water-way in each taxing district; second, the value of the other real estate used for railroad or canal purposes in each taxing district, including the road-bed, (other than main stem,) water-ways, reservoirs, tracks, buildings, water-tanks, riparian rights, docks, wharves, and piers, and all other real estate except lands not used for railroad or canal purposes; third, the value of all the tangible personal property of each railroad and of each canal company; and, fourth, the value of the franchise. It then declares that the term "main stem" is to be held to include the road-bed not exceeding 100 feet in width, with its rails and sleepers and the passenger depots; and that the term "water-way" is to be held to include the towing path and berme bank. It defines also the terms "taxing districts" and "tangible personal property" as used in the act. It provides that the state board of assessors shall be governed by the valuation of the local assessors, if lower than theirs, in ascertaining the value of the real estate used for railroad or canal purposes not included in the main stem or water-way, and that the local assessors shall certify to the board a description of the property of any railroad or canal company within their taxing district, both that which is not used for railroad or canal purposes, and that used for such purposes, excepting the main stem and water-way as defined by the act; also their valuation of those properties, and the local rate of taxation for county and municipal purposes. If, in any taxing district, there should be several branch lines of railroads belonging to or controlled by one company, or operated under one management, the assessors are to designate one of them as main stem, and the others are to be treated as "other real estate used for railroad purposes." The board are to compute the tax upon the entire assessed valuation of each railroad and canal company as ascertained by them, and the taxation is to be as follows: The company is to pay, upon the valuation, to the state, for state purposes, one-half of 1 per cent. annually, and, in addition thereto, the local rate for county and municipal purposes on the valuation of the real estate, other than main stem or water-way, that is used for railroad or canal purposes, in the taxing district; but such local rate is not to exceed 1 per cent. of such last-mentioned valuation. The act provides that the sum of the estimates or computations for each company shall constitute the tax to be paid by it, and that if, upon complaint, the board shall find that the amount of the state tax and local rate, as limited in the act, combined, exceed the amount which the company would have to pay if assessed at and required to pay full local rates alone, then they shall reduce the whole tax to the amount which the company would be required to pay at the last-mentioned rate; and, in order to ascertain that amount, (but for no other purpose,) they may apportion the value of the franchise among the local taxing districts. Of the taxes assessed under the act the one-half of 1 per cent. is to be appropriated to state purposes, and the money received for tax upon property separately assessed in the different taxing districts is to be allotted to those districts, giving to each the amount derived from the property of each railroad or canal company therein. The foregoing are all of the provisions of the act which it is necessary or important to state for the consideration of the question which is now before the court.

In this connection it will be proper to refer briefly to the history of the legislation, other than such as is contained in special charters, by which taxes have been imposed upon railroad and canal companies in this state.

By the act of 1866 (Revision, p. 1150) it was provided that all real and personal estate within this state, whether owned by individuals or by corporations, except such as was owned by corporations which, by their charters, were expressly exempted from taxation, should be liable to taxation at the full and actual value thereof.

The railroad tax law of 1873, (Revision, p. 1166,) after reciting that, for the encouragement of railroad enterprise, laws creating and regulating railways in this state usually provide for the payment by them, in consideration of their charter privileges, of a fixed rate upon their capital stock, or the cost of their works, in lieu of all other public impositions whatsoever; and that it was nevertheless intended that the property of such corporations, being largely acquired for or through the growth and extension of their prosperity, should contribute to the charges and expenses essential for municipal and county purposes; and that it was desirable, in order to the avoidance of litigation and future dissatisfaction, that such municipal and county taxation should be authorized, and that it should be permanently fixed and regulated,—provided that railroad companies occupying and using railroads in this state, whether as lessees or otherwise, should pay, upon the cost, equipment, and appendages of their respective railroads, a state tax after such rate of taxation as might have theretofore been fixed by law upon such companies, or, in default thereof, after the rate of one-half of 1 per centum upon such cost; and that they should pay upon all the real property by them occupied, used, or owned for the purposes of their roads or otherwise, excepting the main stem or road-bed and track, not exceeding 100 feet in width, and excepting also a tract of land not exceeding 10 acres at the termini, a county and municipal tax, for the benefit of the counties, townships, and cities, respectively, where such real property was situated, after the rate of 1 per centum upon a valuation thereof, and of all the improvements thereon not by way of repairs then or thereafter to be made. The act provided for the voluntary surrender, by any railroad company, of any privilege which it might claim of exemption from taxation under its charter, and for its acceptance in lieu thereof of the taxation provided by the act. The act was in force when the amendments to the constitution were adopted, among which was the before-mentioned provision that property shall be assessed for taxes under general laws and by uniform rules, according to its true value. It will have been seen that, under the act of 1873, the property was assessed for taxes for state purposes, not according to its true value, but according to its cost; and, as to taxes for county and municipal purposes, it was assessed upon a valuation. The cost for the assessment of the tax for state purposes was to be ascertained by a return thereof, on oath or affirmation, by the president of the company to the comptroller of the state; and the valuation for the assessment of tax for county and municipal purposes was to be fixed by a commissioner appointed by the governor. The act gave an action to the state against the corporation for false return in case the comptroller should be dissatisfied with the return of the president.

By the general railroad law (Revision, p. 925) passed in 1873, it was provided that the companies incorporated thereunder should pay to the state an annual tax of one-half of 1 per cent. upon the cost, equipment, and appendages of their road, including the cost of their road-bed, and such other taxes as might be assessed from time to time by a general law applicable to all railroads over which the legislature should have power for that purpose, at the time of passing such law, and that they should be regularly assessed and pay tax for the value of their real estate, (except the road-bed, 100 feet wide,) and the improvements thereon, and their personal property, as taxed at the time when that act was approved, in the city or cities, township or townships, wherein it lay, at the same time and rate, and in the same manner, and for the same purposes, and by the same person or persons, as the other taxes assessed in such cities or townships.

The act of 1876 (Revision, p. 1168) provided that all railroad companies and corporations occupying or using railroads in this state, whether as lessees or otherwise, liable to be taxed as such by a general law taxing...