For the prosecutor, Samuel Backer and Daniel J. Dowling.
For the defendants Carolina Boardwalk Corporation and Childs Company, Selick J. Mindes.
Before Justices Parker, Bodine and Perskie.
The opinion of the court was delivered by
PARKER, J. The substantial question in this controversy is, what was the fair taxable value of the land and building occupied in part or whole by the Childs boardwalk restaurant in Atlantic City as of October 1st, 1936? The local assessors valued the land at $256,650, the building at $135,300: total $391,950. The owners appealed to the County Board of Taxation, which refused any reduction of the valuation; on further appeal to the State Board of Tax Appeals, that body, acting by three of its members, fixed a valuation of land, $218,000, improvements, $120,000: total $338,000, or a reduction of $53,950. The city of Atlantic City sued out the present writ to review the judgment of the state board.
The case is an outstanding example of the growing tendency in the matter of reviewing tax valuations, to minimize the presentation of facts and evidence before the two state bodies to which the legislature has specially committed the task of reviewing valuations, namely the County Boards of Taxation and the present State Board of Tax Appeals. The printed book in the present case does not show what testimony was
taken before the County Board of Taxation nor, indeed, that any testimony was taken at all before that body. So far as relates to the hearing before the State Board of Tax Appeals, what we find in the return is, the testimony of only one witness taking up some eight pages of the printed book; and for the taxing authorities, the testimony of two witnesses consisting of twelve pages. It was on this testimony that the state board based its decision; and the case being brought to this court by certiorari, there was a rule for the taking of depositions, which is expressly permitted by statute, and resulting in a mass of depositions by eighteen witnesses taking up some two hundred and seventy pages of the printed book. To a case of this kind, the pertinent criticism of the Court of Errors and Appeals in the case of Central Railroad Company of New Jersey v. State Tax Department, 112 N.J.L. 5 (at pp. 15, 16), is peculiarly applicable. The court said in that case: "The State Board of Tax Appeals based its judgment on the proof submitted to it. It could not and of course should not do otherwise. The Supreme Court, and now we, are asked to review the judgment of that tribunal on proofs which were never before it." We have, of course, considered the case in the light of all the testimony before us; but deem it unnecessary to review it in detail. In our view, the testimony taken before the state board was quite insufficient to warrant the reduction that it ordered, and this apart from the fact that several rulings of that board with regard to the admission of testimony before it were palpably erroneous. True, the reasons in the present case do not specifically allege error in that regard; but in examining the testimony we cannot be blind to the effect of the errors in question as bearing on the determination of the state board.
The property in question is the Childs Restaurant property in Atlantic City on the northwesterly corner of South Carolina avenue and the boardwalk, having a frontage of one hundred and ten feet on the boardwalk and a depth on South Carolina avenue of two hundred and forty-one feet. These measurements are given in the record itself. The sole witness for the owners before the state board gave a general estimate
of valuation without going particularly into detail. He based his estimate in part on a depth of one hundred and seventy-five feet instead of two hundred and forty-one feet. He based his estimate of obsolescence on the hypothesis that the building was eleven years old at the time of the original assessment instead of nine years; he declined at first to make any estimate of the valuation of boardwalk frontage by the foot; and shortly afterwards, under cross-examination, admitted that he was wrong both as to depth and obsolescence, but adhered to his total valuation. The following extract from his testimony is illustrative: "Q. What value per front foot do you place on this property? A. I didn't place a value per front foot. Q. What is your opinion of the value per front foot? A. I haven't figured any opinion, as to the value per front foot. I gave it as a whole. Q. How did you arrive at it? A. I just arrived at the $200,000. Q. Yes, but how did you arrive at that figure? A. What I thought the building and land was worth, as of October 1." Pressed further on cross-examination he stated a valuation of $2,000 a front foot. He was recalled for further cross-examination and asked a question with regard to a boardwalk property a short distance away which had been sold in 1935. An objection was made, stating no ground; the board sustained the objection; counsel undertook to explain the purpose and was stopped by a peremptory ruling. Another question was asked on the same line with regard to the condition of the buildings as compared with those of the Childs property. Again there was an objection, stating no ground. The objection was sustained. Another question, as to whether the witness knew the sale price of the other property. That was objected to and objection was sustained. The result of all this was that the state board refused to listen to a cross-examination with regard to property fairly comparable with that under consideration and deprived itself of such facts as would have been developed by that cross-examination.
As against the vacillating and (to our mind) unreliable testimony of this witness, the city produced before the board a local architect, experienced ...