On appeal from the Supreme Court.
For the plaintiff-appellant, Lum, Tamblyn & Fairlie (John M. Leavens, of counsel).
For the defendant-respondent, Frank A. Boettner (Walter B. Reilly, of counsel).
The opinion of the court was delivered by
BROGAN, CHIEF JUSTICE. The sole question raised by this appeal concerns the right of a taxpayer, who has paid taxes as assessed, though he disputes the amount of the assessment, to have interest on tax moneys refunded by the taxing district when the valuations fixed by the taxing districts have, on taxpayer's appeal, been reduced by reviewing tax tribunals.
Taxes were levied on the property of the plaintiff corporation for the year 1934. The plaintiff paid the tax during the year 1934 in quarterly installments, pursuant to the provisions of the General Tax act of 1918. Pamph. L., p. 847, as supplemented and amended. The taxpayer appealed to the Essex county board of taxation, where its appeals were dismissed without prejudice, and further appealed to the state board of tax appeals, which reduced the valuation and corrected the assessments. The result was that the taxes paid by the plaintiff for 1934 were reduced by the sum of $16,454.20. The defendant taxing district tendered the plaintiff this amount which the plaintiff refused to accept unless interest on the over-payment was added. This was refused by the taxing district. Suit at law was instituted in the Supreme Court and the trial judge held that the plaintiff should have a judgment for the amount of the over-payment but without interest.
It is argued by the plaintiff-appellant that the obligation to refund carries with it the right to have interest on the amount abated and, on the other hand, the respondent municipality argues that interest cannot be recovered when taxes are abated unless the statute provides for it.
The appellant, in support of its position that interest should be allowed on the amount of taxes abated, relies on the cases
of Jersey City v. Riker, 38 N.J.L. 225; Jersey City v. O'Callaghan, 41 Id. 349, and Ocean Grove, &c., v. Bradley Beach, 91 Id. 364. We do not consider these cases applicable.
In the Riker case plaintiff had been assessed for benefits resulting from the construction of a sewer. He paid the assessment and, subsequently, on certiorari prosecuted by him, the assessment proceeding was set aside and a reassessment ordered wherein a much smaller assessment was fixed. He brought suit to recover the difference between what he had paid under the first assessment and the amount fixed on reassessment. The plaintiff's claim was resisted on the ground that he had voluntarily paid the tax assessed and could not maintain a suit for reimbursement.
The court held that the payment first made, having nothing either in theory or in fact upon which to rest, i.e., proceeding under which it was collected having been set aside, the plaintiff was entitled to recover and, the assessment being vacated by judicial action, an assumption was raised under the law to refund the money. The question of interest was not involved.
The O'Callaghan case was decided on like principles, but the plaintiff's claim in that case was even stronger and the action was to recover the amount, with interest, of an assessment paid by the plaintiff to the municipality. An amount was assessed for benefits to the property of the plaintiff also because of the construction of a sewer. A second taxpayer assailed the validity of the proceedings and, on Certiorari, the assessment as to him was set aside. Then the city, on its own motion and under the statute, caused the entire assessment proceeding to be vacated and started anew with the result that the second assessment levied against the plaintiff for benefits was about $1,000 less than the previous one which he had paid. The plaintiff sued to recover the difference between the first and second assessment. There, too, the court found that the defendant's ...