On certiorari to judgment of the State Board of Tax Appeals.
For the prosecutor, John J. Fallon (Frank P. McCarthy, of counsel).
For the defendant Hoboken Dock Company, Peter Bentley (Herbert Clark Gilson, of counsel).
Before Justices Case, Donges and Heher.
The opinion of the court was delivered by
HEHER, J. Concededly, the State Board of Tax Appeals erred in not including in the assessable tangible property cash on hand in the sum of $9,524.36. Chapter 165 of the Laws of 1933 (Pamph. L., p. 346) does not warrant the claimed exemption. City of Newark v. State Board of Tax Appeals, 118 N.J.L. 131.
The remaining question is whether the defendant corporation is entitled, under R.S. 1937, 54:4-14, to a deduction of $65,000, as an outstanding obligation for moneys loaned to it
by the First National Bank of Jersey City, and secured by treasury discount bills issued by the United States, for which exemption from taxation was claimed and allowed. The issue was submitted to the State Tax Board on a stipulation of facts; and the conclusion was that there was no factual basis to the allegation that "the debt was incurred for the purpose of reducing respondent's taxes," and that, even if there were, there was no indication of bad faith "in the incurring of the debt * * * or in the purchase of the treasury bills," and the case of City of Hoboken v. State Board of Taxes and Assessments, 107 N.J.L. 35; affirmed, 108 Id. 195, was controlling.
There is a preliminary procedural question presented for consideration. Depositions were permissible under the allocatur; and prosecutor adduced evidence on the issue thus arising. The property owner maintains that the taxing district should not now be heard on "the issue of an alleged fraud when that issue was not raised" below. The point is untenable.
The validity of the claimed deduction was mooted before the State Board, and decided; and, under R.S. 1937, 2:81-8, prosecutor was at liberty to adduce evidence here bearing upon that question. And it is now the duty of this court to make its own independent findings of fact upon all the evidence, and to adjudge accordingly. The statutory scheme plainly permits a full development of the facts in this court and a determination in consonance therewith, regardless of what has been done below. Royal Manufacturing Co. v. State Tax Department, 112 Id. 5, 15; Atlantic City v. State Board of Tax Appeals, 123 Id. 464.
This brings us to the consideration of the substantive question; and on this prosecutor is entitled to prevail. These are the undisputed facts: The assessment date was October 1st, 1937. On the prior September 20th, when the Dock Company had a bank deposit of $14,000, it procured the loan of $65,000 from the named bank on its promissory note payable December 20th, 1937, with ...