On appeals and certifications from the Appellate Division, Superior Court.
For reversal and remandment -- Justices Heher, Oliphant, Wachenfeld, Burling and Brennan. For affirmance -- None. The opinion of the court was delivered by William J. Brennan, Jr., J. Oliphant, J., concurring in result.
[10 NJ Page 423] When the Director of the Division of Taxation levied class II railroad property tax assessments for 1949 under R.S. 54:29 A -17 upon the main terminal in Jersey City and Hoboken and the 11th Street freight station in Hoboken of the Delaware, Lackawanna & Western Railroad Company, reducing by approximately 10% the assessments thereon which had been uniformly made per acre from 1939 to 1948, both the cities and the railroad appealed to the Division of Tax Appeals, R.S. 54:29 A -31, making the State a party respondent, R.S. 54:29 A -32. The railroad contended that despite the reductions the assessments were still excessive. The cities contended that the assessments were insufficient and indeed should have been made in amounts exceeding the 1939-1948 valuations. The Division of Tax Appeals, after extended hearings before a panel of the Division, R.S. 54:2-18, and the taking of voluminous evidence, principally testimony of expert witnesses, entered judgments canceling the reductions made by the Director. Appeals and cross-appeals were then taken by the railroad and the cities to the Appellate Division which entered judgments sustaining the judgments of the Division of Tax Appeals upon the main terminal (unanimously as to the segment thereof known as the Little Ferry tract and one judge dissenting as to the remainder, and bulk, of the terminal) but reversing the judgment in respect of the 11th Street freight station, restoring the Director's assessment thereon. 16 N.J. Super. 543 (1951). The cases are here on the appeals, or certifications granted on petition therefor, of the several parties including the State, from the judgments entered in the Appellate Division.
The Appellate Division considered that it was obliged to sustain judgments of the Division of Tax Appeals "unless the evidence preponderates against" the valuations determined by that body. 16 N.J. Super., at p. 550. The court accordingly reviewed the record for evidence supporting the determinations of the Division of Tax Appeals. The conclusion reached was that the valuations for the main terminal were sustained by evidence but not those for the tracts comprising the 11th Street freight station. The opinions upon valuations of the opposing groups of experts were deemed to be of "slight help," "their partisanship is too evident." The reasoning of the majority as to the bulk of the main terminal was that there "has been a steady shrinkage in the value of money" since 1941 and the majority, therefore, "in the absence of compelling evidence" was unwilling to overrule the Division of Tax Appeals, as so to do was viewed to be tantamount to holding that "the Lackawanna Terminal tract, contrary to the universal trend, decreased in value during that period." The valuation of the Lower Ferry segment was unanimously sustained on the strength of evidence of sales of nearby steamship piers in 1946 and 1948. The judgments as to the tracts making up the 11th Street freight station were unanimously reversed upon findings that there was no evidence to sustain the determinations of the Division of Tax Appeals and some support for the Director's values in evidence of sales by the railroad of parcels contiguous to those tracts.
Our review of the record persuades us that the cases must be remanded to the Division of Tax Appeals for further proceedings. There is a fatal defect in the record. The parties have not had the benefit of findings of fact by the Division of Tax Appeals as required by R.S. 54:2-16. The deficiency was not remedied in the Appellate Division by an independent determination by that court of the basic facts and the making of its own assessments based thereon. However, we have held that usually the better appellate practice in cases presenting complex questions of value such as this is not to exercise the power conferred by Article VI,
Section V, paragraph 3 of the Constitution of 1947 and Rule 3:81-13 independently to review the facts and make the assessment. City of Newark v. West Milford Tp., Passaic County, 9 N.J. 295, 301 (1952). Appellate courts should not inject themselves into the field of original valuation in such cases except in very exceptional circumstances. Cf. Kendrick Coal & Dock Co. v. Com'r. of Internal Revenue, 29 F.2d 559 (C.C.A. 8, 1928). The valuation of property in railroad use particularly presents "highly technical" problems for experts. Long Dock Co. v. State Board of Tax Assessors, 86 N.J.L. 592 (E. & A. 1914), reversing Long Dock Co. v. Hendrickson, 85 N.J.L. 536 (Sup. Ct. 1914). The coordination and evaluation of such expert evidence is often a matter of considerable difficulty because of the unique problems entailed in the valuation of properties in railroad use and the increment in value, if any, resulting from the assemblage and consolidation of several tracts, Pennsylvania Railroad Co. v. Jersey City, 98 N.J.L. 283 (E. & A. 1922). The task of coordination and evaluation of such evidence has been expressly committed by the Legislature to the Division of Tax Appeals, a body contemplated to bring an informed judgment from specialized experience to the nice balancing and ultimate resolution of the many complex factors involved.
Therefore, as the Appellate Division did not choose to make its own findings and assessments, justice to the parties and considerations of the principles governing judicial super-intendance of this important administrative agency required that the cases be returned to the Division of Tax Appeals for new determinations based upon adequate findings of fact in compliance with its clear duty under R.S. 54:2-16 to "reduce to writing its findings of fact" underlying its "decision" and to enter of record such "findings" together with its "decision."
We have said that the statutory "requirement of findings is far from a technicality and is a matter of substance." In the Matter of the Arbitration between N.J. Bell Telephone Co. v. Communications Workers of America, etc., 5 N.J. 354, at 375 (1950). And we have consistently
refused to sustain the determinations of administrative agencies which have failed to supply such findings in violation of a statutory requirement. Pennsylvania Railroad Co. v. N.J. State Aviation Commission, 2 N.J. 64 (1949); Central R.R. Co. of New Jersey v. Department of Public Utilities, 7 N.J. 247 (1951); In the Matter of the Arbitration between N.J. Bell Telephone Co. v. Communications Workers, etc., supra. The validity of such requirement is sufficiently sustained in practical considerations and we need not inquire too closely for a constitutional basis. Davis on Administrative Law (1951), pp. 521 et seq.; Feller, Prospectus for the Further Study of Federal Administrative Law, 47 Yale L.J. 647 (1938); Saginaw Broadcasting Co. v. Federal C. Comm., 68 App. D.C. 282, 96 F.2d 554 (Ct. App. D.C. 1938), certiorari denied sub nom. Gross v. Saginaw Broadcasting Co., 305 U.S. 613, 59 S. Ct. 72, 83 L. Ed. 391 (1938). Feller, supra, at p. 666, observes:
"It would profit us little to try to find a rational constitutional basis for the requirement. It should suffice that the practical basis is sound enough. The requirement is an excellent one. The advantages of carefully drawn findings are immense. They induce a sense of responsibility on the part of the administrative officer; their formulation aids immeasurably in the formulation of the decision; they limit the issues to be decided on review and save the time of litigants and the courts. All these advantages flow from findings carefully drawn; if they are merely perfunctory they are completely useless."
Moreover, we have stressed that upon appellate review of judgments of the Division of Tax Appeals upon questions of valuation
"The duty of the appellate court under these rules in this class of cases is to review the evidence and render such decision as it deems proper in the light of that evidence but not to disturb the judgment of the Division of Tax Appeals unless the evidence is persuasive that the administrative tribunal ...