On appeal from Division of Tax Appeals, Department of the Treasury, State of New Jersey.
No. A-153: For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Brennan. For reversal -- None. No. A-154: For reversal -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Brennan. For affirmance -- None. The opinion of the court was delivered by Burling, J.
These consolidated appeals from the Division of Tax Appeals in the Department of the Treasury, State of New Jersey (hereinafter called the Division) involve assessments of lands classified in the category of Class II railroad property. See N.J.S.A. 54:29 A -17. The assessments on Class II buildings and other improvements are not involved herein. One of the appeals was taken by the Township of Weehawken (hereinafter called Weehawken), a municipal corporation of New Jersey, from a Division judgment of dismissal of Weehawken's appeal of a 1953 assessment (A-154 September term 1954). The balance of the appeals were taken by the Erie Railroad Company (hereinafter called Erie), a corporation of the State of New York, using properties in New Jersey for railroad purposes, and relate to judgments of the Division which sustained or increased certain 1950, 1951, 1952 and 1953 assessments of Class II lands of Erie, situate within the territorial limits of the City of Hoboken, New Jersey (hereinafter called Hoboken) and Weehawken. (A-153 September term 1954).
The several appeals above adverted to, addressed to and consolidated by the Superior Court, Appellate Division, were certified by this court on its own motion prior to hearing there.
There are three principal parcels of Class II railroad land involved in these appeals. All of these parcels may be generally
characterized as Hudson River waterfront terminal lands. One was cursorily described in Erie's complaint filed with the Division as second-class Erie Railroad property in the City of Hoboken consisting of 1.862 acres of land "outside main stem, excess in southeast portion of Terminal Tract triangle extending from Weehawken Township to exterior line for piers." These lands were assessed by the Director, Division of Taxation (hereinafter called the Director) for each of the tax years 1950, 1951, 1952 and 1953 at $75,410. This parcel will be referred to herein as parcel No. 3. The other two parcels, designated throughout the tax appeal proceedings as parcels Nos. 1 and 2, lie in Weehawken. Weehawken parcel No. 1 was described in Erie's complaint filed with the Division as 69.847 acres of land "outside main stem, excess from east side of main stem of N.J. Junction R.R. to exterior line for piers," and was assessed by the Director for each of the tax years 1950, 1951, 1952 and 1953 at $2,828,803. Weehawken parcel No. 2, in respect to tax years 1950, 1951 and 1952, was described by Erie in its complaint as 9.642 acres of land "outside main stem, excess west of main stem of N.J. Junction R.R.," and was assessed by the Director for each of those tax years at $260,334. Weehawken parcel No. 2 was subjected to reclassification for the 1953 tax year, 2.032 acres being withdrawn from the Class II railroad property classification and assessed by local authorities as general lands. Therefore the Director's assessment for the tax year 1953 as to Weehawken parcel No. 2, namely $205,470, related to 7.610 acres of land "outside main stem, excess west of main stem of N.J. Junction R.R."
Erie appealed the assessments on all three parcels, for each of the four tax years, 1950, 1951, 1952 and 1953. Erie sought reduction of assessments, on Weehawken parcel No. 1, to $2,095,410 for each tax year; on Weehawken Parcel No. 2 to $188,983 for tax years 1950, 1951 and 1952, and (on the reduced acreage hereinbefore mentioned) to $149,900 for tax year 1953; and on parcel No. 3 (Hoboken) to $55,860.
Hoboken appealed the assessments on parcel No. 3 for tax years 1951, 1952 and 1953, contending that the parcel's true value for each of those tax years was $121,600.
Weehawken appealed the assessments on parcels No. 1 and No. 2 for tax years 1952 and 1953, contending that for tax years 1952 and 1953 the true value of parcel No. 1 was $3,841,585; for tax year 1952 the true value of parcel No. 2 was $289,260; and for tax year 1953, the true value of parcel No. 2 as reduced in size was $239,260.
The Erie, Hoboken and Weehawken appeals hereinbefore adverted to were consolidated for hearing in the Division of Tax Appeals. The taking of testimony commenced October 20, 1953, before Commissioners Hull, DeVoe and Weiner, who constituted the "railroad panel" of the Division of Tax Appeals, before whom all pending railroad tax appeals had been listed for hearing. The hearings encompassed 20 days, spread over a period of months terminating April 12, 1954. A report for the panel was prepared by Commissioner Hull, dated August 6, 1954. Commissioner Hull's written report contained detailed discussion of the appeals and evidence, expressed findings of fact and conclusions of law, and recommended judgments based thereon. The Division of Tax Appeals, on August 27, 1954, stating "the members of the Division of Tax Appeals having considered the evidence submitted by the parties," entered separate judgments in each of these tax appeals. The Division's docket entries demonstrate that Commissioner Hull's report "was unanimously approved and judgment was ordered entered accordingly."
The Division, in its judgments, dismissed Erie's appeals for all four tax years (1950-1953, inclusive); dismissed Weehawken's 1953 appeal on adjective grounds; granted Hoboken appeals as to tax years 1951, 1952 and 1953, establishing the assessment for each tax year at $83,790; granted Weehawken's appeal for the tax year 1952, setting the assessments for that year at $3,143,115 as to Weehawken parcel No. 1, and at $289,260 as to Weehawken parcel No. 2. Erie
appealed from the Division's judgments dismissing its tax appeals, and from the Division's judgments allowing increases in assessments on Hoboken's and Weehawken's appeals. Weehawken appealed from the Division's judgment dismissing its 1953 appeal. All these appeals were addressed to the Superior Court, Appellate Division, and were consolidated for hearing by order of that court made with the consent of all parties to the appeals and filed November 3, 1954. As hereinbefore noted, we certified the consolidated appeals for argument and disposition in this court. The arguments and briefs of Erie, Hoboken and Weehawken have been presented to us in two phases: Erie's appeals, A-153 September term 1954, and Weehawken's appeal, A-154 September term 1954. In the disposition of the consolidated appeals this sequence will be maintained. It is noted in passing that the respondents Director, Division of Taxation, and Division of Tax Appeals have filed a statement signifying their determination to file no briefs in these matters.
The questions involved in Erie's appeals include: (a) whether there were procedural defects requiring reversal, in connection with the course of determination pursued by the Division; (b) whether the Division adjectively made adequate findings of facts and determinations; (c) whether the Division erred in relation to matters of evidence, including, inter alia, resort to "trends" of increase in property values; (d) whether the Division must affirm an assessment in absence of substantial evidence of error therein; (e) whether the determinations made by the Division are supported by the evidence. In addition, on these appeals, Hoboken and Weehawken question the validity of an order made by the Superior Court, Appellate Division, on December 1, 1954, extending Erie's time for perfection of its course of appeal.
I. ADJECTIVE COURSE OF DETERMINATION.
The initial questions involved presented by Erie on these appeals broach three adjective issues: whether there should be a reversal of the judgments of the Division for failure of all three members of the railroad panel to sign their report, whether the panel report was invalid because it included recommendations, and whether the approval of the report submitted by Commissioner Hull constituted adoption thereof by the Division.
Erie accepts as valid the mechanics of the Division's assignment of these appeals to, and of hearing by, the railroad panel. The questions involved are devoid of any direct or implied attack thereon, and if there is any deficiency in that respect it must be deemed waived. Cf. R.R. 1:7-1(c). The portions of the record reproduced by Erie in the appendix to its brief, see R.R. 1:7-1(f), as necessary to a determination herein do not disclose any patent error in this respect.
The questions involved as presented by Erie hinge on construction and application of pertinent provisions of the applicable statute of this State.
The statute provides that a majority of the Division shall constitute a quorum and a vacancy "shall not impair the powers nor affect the duties of the board or of the remaining members." R.S. 54:2-10. The Division may "make such reasonable orders upon the final determination of * * * appeals as will effectuate the final determination thereof according to law. Such determination shall be evidenced by a judgment signed by at least four members, and filed with its secretary * * *." R.S. 54:2-14, as am. L. 1946, c. 161, sec. 3. (Emphasis supplied)
The statute further provides as follows:
R.S. 54:2-16, as am. L. 1941, c. 143, sec. 1:
"Hearings before the board shall be open to the public and its proceedings shall be conducted in accordance with such rules of evidence and procedure as the board from time to time may prescribe.
The board shall reduce to writing its findings of fact and its decision in each case. These findings and decisions shall be entered of record and a copy furnished to the appellant and the State Tax Department. All findings, decisions and reasons therefor of the board including the transcript of testimony, if any, shall be public records and open to the inspection of the public." (Emphasis supplied)
R.S. 54:2-18, as am. L. 1941, c. 143, sec. 2; L. 1946, c. 161, sec. 4:
"The Division of Tax Appeals in the State Department of Taxation and Finance may, as occasion shall require, by order, refer to two or more of its members, at least one of whom shall be an attorney-at-law, the duty of taking testimony in a matter pending before it, and to report on such matter and the testimony so taken, to the division, but no determination shall be made therein except by the division. Said reports shall be in writing and signed by the members, and shall include, in substance, the facts and particulars of the testimony so taken, which written reports shall be public records and open to the inspection of the public. Stenographic notes shall be made of all testimony so taken, but the members of the board shall be qualified to make their determination after receiving the report of the members hearing the testimony, and without the necessity that the stenographic notes so taken shall have been reduced to writing; provided, however, that the testimony shall be reduced to writing at the request of any member of the division required to make a determination in any such matter." (Emphasis supplied)
Erie asserts no error in the judgments of the Division as such. The judgments in each matter stated the ultimate determination made by the Division and were signed by five members of the Division. On their face the respective judgments appear to be strictly in conformity with R.S. 54:2-14, as amended, supra.
Erie contends that initial error obtains in the element of the making of recommended findings of fact and determinations in Commissioner Hull's report. Erie's argument is that the statute expressly forbids such a practice in the phrase "no determination shall be made therein except by the division." R.S. 54:2-18, as amended, supra. We find no merit in this argument. The clear sense of this statutory provision as an entirety is to permit the report of the panel
members to contain recommendations of findings of fact and conclusions (i.e., proposed determinations to be acted upon by the Division). The absence of these elements contributed to reversal in a similar case, Delaware, L. & W.R. Co. v. City of Hoboken, 10 N.J. 418, 427 (1952). And the specific language "no determination shall be made therein except by the division" (emphasis supplied) obviously refers to the phrase "matter pending" before the Division, and not to the report of the panel. It does not bar recommendations by the panel, and the statutory provision R.S. 54:2-18, as amended, supra, expressly requires the report to "include, in substance, the facts and particulars of the testimony * * *."
The further contention is advanced by Erie that the panel report was invalid in that it was not signed by all members of the panel. We do not condone the omission but the error under the circumstances of this case is not demonstrably prejudicial to any party to the appeals. The report could be made by a majority of the panel since the duties of Division members are not impaired by a vacancy. R.S. 54:2-10, supra. No arbitrary refusal to sign the report by one or the other of Commissioner Hull's confreres on the panel is suggested either in the arguments presented to this court or in the record. No disagreement is indicated and Commissioner Weiner, a panel member, participated in the determination (as did Commissioner Hull, who wrote the report) made by the Division and signed the respective judgments, signifying thereby his agreement therewith.
Examination of the record suggests that during the 20 days of hearings before the panel, Commissioner Hull was absent on one day, Commissioner Weiner was absent on one day and Commissioner DeVoe was absent on more than one day. On each day of the hearings the statutory panel minimum was present, namely two commissioners, one of whom was an attorney. R.S. 54:2-18, as amended, supra. The essential purpose of resort to hearers under this statute is to facilitate the compilation of a record under quasi-judicial guidance, and their report as such hearers is not a decision.
Ibid. The record compiled is reviewed by the Division. Such procedure does not constitute a denial of due process. Mazza v. Cavicchia, 15 N.J. 498, 504 (1954). No error or prejudice is charged by Erie in these respects and none is apparent under the circumstances of the matters involved on these appeals. Under the circumstances of this case, therefore, no reversal will be effected on this basis. However, as a caveat we reiterate and stress our conclusion, stated by Mr. Justice Brennan, in City of Passaic v. Passaic County Bd. of Taxation, 18 N.J. 371, 397 (1955), concerning R.S. 54:2-18, as amended, supra, that:
"We think the sense of this provision is that the members assigned to conduct a proceeding and who report to the full Division must hear the proceedings throughout. * * *"
Erie also contends that the Division did not adopt the panel report and therefore made no written findings of fact and decision. See R.S. 54:2-16, as amended, supra. We find no merit in this contention. Commissioner Hull did not acquire a lesser status as a panel member but remained a member of the Division. His report was no less subject to adoption by the whole Division than was Commissioner DeVoe's report in Atlantic City Transportation Co. v. Director, 12 N.J. 130, 140-141 (1953). The panel members are commissioners, not subordinate employees, and the panel report is expressly declared by statute to be a public record. It is not secret, and Erie has asserted no right of access thereto or notice thereof prior to consideration of the appeals on the merits by the Division. Compare Mazza v. Cavicchia, supra, 15 N.J., at page 514. Further the judgments of the Division expressly state "the members of the Division of Tax Appeals having considered the evidence submitted by the parties," or the "Division of Tax Appeals having considered the evidence submitted by the parties," signifying resort to the record of testimony and other evidence by the Division members who signed the judgments. See R.S. 54:2-18, as amended, supra. Erie does not contend to the contrary.
Erie's argument is that the record states that the Division merely "approved" Commissioner Hull's report, and reversal is required because there was no "adoption" thereof. The strict lexicographic definitions of "approve" include the sense of ratification, or official sanction. Webster's New International Dictionary (2 d ed. 1947), p. 133. We are not here confronted with a statutory expression of the word "approve" but with the discernment of the intent of the use thereof by the Division. In the sense used there is no doubt that the Division by approval or ratification under the circumstances of this case intended and consummated adoption in fact, and we so hold. Cf. Miller v. Union County, 48 Or. 266, 86 P. 3 (Sup. Ct. 1906); City of Dallas v. Beeman, 18 Tex. Civ. App. 335, 45 S.W. 626, 628 (Civ. App. 1898). Compare Leopold v. Civil Service Commission, 126 N.J.L. 613, 615 (Sup. Ct. 1941).
II. ADJECTIVE SUFFICIENCY OF THE FINDINGS OF FACT.
Erie included in its questions involved on these appeals the question whether the Division's adoption of Commissioner Hull's report was invalidated by the use of the term "suggested" therein. The findings of fact expressed in the report were not individually so characterized. As a preliminary measure the report contained the phrase: "Now, mindful of our duty to propose factual findings from the evidence and to recommend judgments founded thereon, we suggest the following:". This phrase demonstrates only that the panel recognized the statutory mandate that the Division, and not the panel, make the ultimate determination in the matters under consideration. The word "suggest" was clearly used in the sense of recommendation. Upon consideration of all the evidence submitted by ...