For reversal and remandment -- Justices Heher, Oliphant, Wachenfeld, Burling and Jacobs. For affirmance -- None. The opinion of the court was delivered by Burling, J.
[22 NJ Page 328] This appeal stems from 26 judgments entered by the Division of Tax Appeals. They concern assessments levied on property of the Fifth Street Pier Corporation (hereinafter termed plaintiff) during the years 1948-1953,
inclusive, by the defendant City of Hoboken. Judicial consideration has been given by the Superior Court, Appellate Division, R.R. 4:88-8, which affirmed the judgments. Fifth Street Pier Corporation v. City of Hoboken, 40 N.J. Super. 12 (App. Div. 1956). Plaintiff appealed to that court on grounds of error in the property valuations and also claimed a denial of procedural due process. Plaintiff directs our attention only to the latter issue which comes here as a matter of right. R.R. 1:2-1(a). A substantial constitutional question is presented. Butler Oak Tavern v. Division of Alcoholic Beverage Control, etc., 20 N.J. 373 (1956).
It is necessary to trace the protracted agency adjudication with some particularity. Appeals from the property assessments were taken to the Hudson County Board of Taxation and thence to the Division of Tax Appeals. Hearings were conducted by the Division through its panel procedure on 19 different days between January and October 1953. The panel consisted of two of the Division members who sat throughout the proceedings. A stenographic record was made and promptly transcribed. It eventually attained some 2,500 typewritten pages. (The transcript copies were made available for the use of the Division members and the parties.) Plaintiff filed briefs with the panel members and the Secretary of the Division in May 1954. On March 15, 1955 the panel distributed a detailed report containing findings of fact and recommendations to the other members of the Division. Plaintiff did not request a copy of the report nor opportunity to file exceptions. The parties were not notified of the report. On April 7 the entire Division met; the panel report was "officially" filed and upon motion was adopted as the decision of the Division. On April 29 the 26 judgments were entered by the Division, reciting inter alia:
"After hearing evidence produced on the part of said complainant and the said respondent and the argument of * * *, Attorney for the Complainant, and * * *, Attorney for the respondent, and after considering the same, it is * * *."
A copy of the panel report was thereafter forwarded to plaintiff.
Basically, there are two questions involved on this appeal:
1. Was plaintiff deprived of its property without due process of law because it was not notified of the panel report and expressly allowed to file exceptions thereto prior to the decision of the Division of Tax Appeals?
2. Is R.S. 54:2-18 (which provides for the panel method of hearing appeals) violative of the due process clauses of the Federal and State Constitutions?
We deal first with the statutory question.
"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 [sic] 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.)
Clearly the statute contemplates that the Division (which has the sole power of decision) may reach a conclusion solely upon the basis of the panel report. Were there any fragment of doubt reference need only be made to the statement appended to L. 1941, c. 143 (amending R.S. 54:2-18):
"The purpose of this bill is to relieve the board (sic) of the necessity of ordering testimony reduced to writing in every case before it, as a condition of the legality of judgments in cases heard by one or more members, but less than the entire board. Such necessity has been adjudicated by the courts under the sections in
question. The cost of such testimony would, of itself, exceed the present full annual budget of the board, since upwards of 20,000 appeals are filed annually with the board."
The theme of plaintiff's argument is that the Legislature may not provide, consistently with procedural due process, that the members of the Division may decide a matter on anything less than the record made at the hearing. The frequently quoted expression "The one who decides must hear" of the First Morgan case (Morgan v. United States, 298 U.S. 468, 56 S. Ct. 906, 80 L. Ed. 1288 (1936)) is said to require something more than personal mastery of a panel report by the powers of decision. The extent of decisional comprehension contended for is revealed in plaintiff's anticipation that "every member of the Division who participated in the decision would be fully familiar with the testimony."
We might, of course, pass over the constitutional issue in view of the actual transcription of the stenographic notes by the Division and whatever presumptive strength can be distilled from the judgment recitals. United States v. Morgan, 313 U.S. 409, 61 S. Ct. 999, 85 L. Ed. 1429 (1941) (Morgan IV). In this instance, however, it is proper to steer clear of these hurdles. We have no desire to probe "mental processes," cf. State ex rel. Madison Airport Co. v. Wrabetz, 231 Wis. 147, 285 N.W. 504 (Sup. Ct. 1939), nor to reach an abrupt conclusion upon an inherently weak recital that the deciders heard the evidence and counsel's argument. Compare Hohorst v. Marion Bus Transp. Co., Inc., 5 N.J. Super. 279, 282 (App. Div. 1949) and see Schwartz, "Institutional Administrative Decisions and the Morgan Cases: A Re-examination," 4 Journal of ...