For the Trustees for the Support of Public Schools, David T. Wilentz.
For Vincent J. Murphy, Receiver of Taxes, Raymond Schroeder and Joseph A. Ward.
Before Justices Case, Donges and Porter.
The opinion of the court was delivered by
DONGES, J. Two writs of certiorari were allowed to have determined a single question, namely, whether certain real estate in the City of Newark, owned by the Trustees for the Support of Public Schools, is subject to taxation by the municipality. One writ issued out by the Trustees to have determined the validity of assessments for taxation of said property for the years 1935, 1936, 1937, 1941, 1942 and 1943. The claim of the city that the property is subject to taxation is based on R.S. 54:4-3.3, which sets forth certain classes of property which are exempt from taxation, and then provides: "But this exemption shall not include real property
bought in for debts or on foreclosure of mortgages given to secure loans out of public funds or out of money in court, which property shall be taxed unless devoted to public uses."
The other writ is sued out by the municipality to review a determination of the Essex County Board of Taxation dismissing the municipality's petition that said property omitted from the tax rolls of the City of Newark for the year 1940 be added to said rolls.
It is stipulated by the parties that on March 23d, 1868, Joseph L. Hewes and John M. Phillips executed a mortgage to the Commissioners of the Sinking Fund of New Jersey for $25,000; on January 25th, 1869, another mortgage was executed by said parties to said Commissioners for $15,000; that on May 12th, 1903, the State Treasurer, who was vested with the powers of the Commissioners (Pamph. L. 1891, p. 136), assigned the two mortgages to the Trustees for the Support of Public Schools (Pamph. L. 1903, pp. 60, 366); after default, the mortgages were foreclosed, and by deed dated August 12th, 1935, the sheriff of Essex County conveyed said property to said Trustees, who continue to own same.
This case is in all essential respects similar to State v. Rutherford, 98 N.J.L. 465, where Mr. Justice Swayze, speaking for the Court of Errors and Appeals, said: "The substantial claim on the part of the prosecutor is that under the constitution, article 4, section 7, paragraph 6, the property of the trustees for public schools is not subject to local taxes."
That paragraph of the constitution reads as follows:
"The fund for the support of free schools, and all money, stock and other property, which may hereafter be appropriated for that purpose, or received into the treasury under the provision of any law heretofore passed to augment the said fund, shall be securely invested, and remain a perpetual fund; and the income thereof, except so much as it may be judged expedient to apply to an increase of the capital, shall be annually appropriated to the support of public free schools, for the equal benefit of all the people of the state; and it shall not be competent for the ...