On appeal from Division of Tax Appeals, Department of the Treasury.
For affirmance -- Justices Heher, Wachenfeld, Jacobs and Brennan. For reversal and remandment -- Chief Justice Vanderbilt, and Justices Oliphant and Burling. The opinion of the court was delivered by Wachenfeld, J.
These are 15 consolidated appeals from the Division of Tax Appeals in the Treasury Department certified here on our own motion. They involve the assessments on three parcels of land located within the waterfront terminal of the Lehigh Valley Railroad, commonly known as the "Black Tom" terminal, in Jersey City, and relate to the five years 1946 to 1950, inclusive.
Many years ago, National Storage Company, a wholly owned subsidiary of the railroad, acquired a waterfront tract of approximately 91 acres. Most of the land was leased to the parent company and developed by it as a railroad terminal. The three parcels in question, lots 3-C, 3-D and 3-E, each approximately one acre in area, were retained by National. At one time, all three had warehouses built upon them. The buildings on 3-D and 3-E were destroyed in the memorable "Black Tom" explosion in 1916 and were never rebuilt. The warehouse on 3-C, though damaged in the explosion, was repaired and restored to its accustomed use. On all the assessing dates in question, except October 1, 1949, the entire building was under lease to Greenwich Stores, Inc., a warehouse corporation. On the latter date, Greenwich still occupied all but the two upper stories of the five-story section, which, so far as the record shows, were then vacant and idle.
The recent tax history of the property helps clarify and explain the issues here presented. From 1943 to 1950, inclusive, all three parcels were assessed by the city at the rate of $29,000 per acre, the actual assessment on each varying according to its size. In each year prior to 1950, these
assessments were revised by the Hudson County Board of Taxation to $10,000 per acre, and in the final year to $20,000 per acre. The rates per acre are close approximations in each instance and are adopted by both sides for convenience in discussion.
Appeals were taken for the years 1943, 1944 and 1945 to the State Board of Tax Appeals, which affirmed the valuations determined by the county board.
Twelve of the assessments now under consideration, covering the years 1946 to 1949, were the subject of appeals taken by the city to the Division of Tax Appeals from judgments or assessment revisions of the county tax board. The 1950 assessments, set by the county board at the $20,000 per acre rate, were appealed to the Division by the National Storage Company. All 15 appeals resulted in a determination by the Division that the $10,000 per acre rate represented the true value of the properties in each of the years involved.
The city, as appellant in the cases relating to the years 1946 to 1949, introduced as its only witness a valuation expert, William C. Stewart. He testified to a true value of $37,000 per acre for all the tax years in question, including 1950. He regarded the parcels "as an integral part of the Black Tom Terminal area which, due to the ownership and location within the terminal area, could not be divorced from valuation of the entire terminal as I considered it." When asked whether he valued the property "in railroad use," he replied in the affirmative.
On motion, Stewart's testimony was stricken so far as it related to the 12 cases in which the city was the appellant. This ruling by the Division was based on the following provisions of the Railroad Tax Acts of 1941 and 1948:
R.S. 54:29 A -17: "On or before November first in each year the commissioner shall determine the true value, as of the preceding January first, of all property used for railroad purposes in this State. He shall, in such ...