On certified appeal from the Law Division to the Appellate Division of the Superior Court.
For affirmance and reversal -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Burling and Jacobs. For affirmance -- Justice Wachenfeld. The opinion of the court was delivered by Heher, J. Vanderbilt, C.J. (concurring). Vanderbilt, C.J., and Jacobs, J., concurring in result.
[23 NJ Page 564] In purported compliance with the mandate of L. 1952, c. 229, N.J.S.A. 54:29 A -17, the defendant
Director of the State Division of Taxation, some time prior to December 10, 1955, determined the "true value" of Class II railroad property of the plaintiff Delaware, Lackawanna and Western Railroad Company situate in the cities of Hoboken, Jersey City and Newark and the Town of Secaucus, as of January 1, 1955, for the assessment of the 1956 tax; and the valuations were later sustained by the Director after hearing held under N.J.S.A. 54:29 A -18 pursuant to petitions for review interposed by Lackawanna and the several defendant municipalities.
Lackawanna's petition for review charged that the assessments at true value were "excessive" and "not according to the same standard of value" governing the assessment of other real property within the municipalities, and the municipalities severally complained in their petitions that the valuations of Lackawanna's Class II real property were below true value.
In addition to the assessing function, the Director is required, L. 1954, c. 86, N.J.S.A. 54:1-35.1, on or before October first in each year, to promulgate a "table of equalized valuations to be used in the calculation and apportionment of distributions pursuant to the State School Aid Act of 1954," N.J.S.A. 18:10-29.30 to 18:10-29.48. "True value" for the purposes of the act, L. 1954, c. 86, N.J.S.A. 54:1-35.3, "shall be deemed to be valuation at current market prices or values, determined in such manner as the director may, in his discretion, select"; and he is directed to "determine the ratio of aggregate assessed to aggregate true valuation of real estate of each taxing district"; and he "may make such determination by reference to the county equalization table whenever he is satisfied that the table has been prepared according to accepted methods and practices and * * * it properly reflects true value or a known percentage thereof for the several taxing districts in the county," and "with respect to any and all taxing districts, may use the assessment ratios reported in the Sixth Report of the Commission on State Tax Policy (Trenton, 1953)" and "consider such other assessment ratio studies as may be available";
and he "may make such further and different investigations of assessment practices as he may deem necessary or desirable for the establishment of the assessment ratios required by this act."
The equalization table promulgated by the Director October 1, 1955, pursuant to this statute, as adjusted January 6, 1956 by the Division of Tax Appeals, certifies the "average" ratios of assessed to true value in the given municipalities: Hoboken, 70.80%; Jersey City, 62.61%; Newark, 52.51%; Secaucus, 30.54%. These ratios were determined by an analysis of sales of real property in the several taxing districts between July 1, 1954 and June 30, 1955, related to the assessments made by the local assessing authority.
At a hearing of the petition for review involving Lackawanna's Jersey City property, held January 18, 1956, the Director declared, in response to questions put by counsel, that he had assessed Lackawanna's Class II property in Jersey City "at true value on the basis of the best information available to us for the purpose of determining assessments at true value"; that he conceived it to be his duty to "assess Class II railroad property according to full true value," and he was not at liberty to "apply the average ratio as promulgated in [his] Table of Equalized Valuations for 1955, either the original figures or the corrected figures," and relief from "any alleged discriminatory assessment which may result by the application of that general principle" could come only from the "Division of Tax Appeals or the court." And he said that "we will not apply those ratios * * * to any railroad in any taxing district."
And thereupon, January 20, 1956, before the time had arrived for the scheduled hearings concerning the assessments made in the other municipalities, this action was begun by the filing of a complaint, in which Hoboken, Jersey City, Newark and Secaucus were joined with the Director as defendants, alleging that the Director had failed in the performance of his duty to assess Lackawanna's Class II real property within the several municipalities "* * *
according to the same standard of value and according to the common ratio employed in levying assessments * * *," and thus the assessment "at true value" constituted undue discrimination in violation of the 1947 State Constitution, Article VIII, Section I, paragraph 1, and the Federal Constitution as well, and seeking judgment affirming and declaring the Director's "power and duty to make his initial valuations, to determine and correct his initial valuations and to make his final assessment" of Class II railroad property, for the purpose of assessing the 1956 tax, "according to the average ratio of assessed to true value employed in levying assessments on other real property located within" the respective municipalities, and "at less than true value, when necessary to prevent discrimination," and commanding the Director to "make his final assessment" in the several municipalities according to the ratios given in his promulgated equalization table.
The complaint was later amended to include a count charging the intentional assessment of real property within the defendant municipalities contrary to R.S. 54:4-1.
All defendants moved for summary judgment upon these grounds: (a) the Director has no jurisdiction to assess Class II railroad property at less than true value; and (b) Lackawanna had not exhausted its administrative remedies. Lackawanna countered with a motion to amend the complaint as indicated supra, and for summary judgment upon the ground that there was no "genuine issue of fact as to any material fact," and it was entitled to prevail as a matter of law. Defendants' motion was denied; and the cross-motion was granted.
The judgment affirms that "there are no essential facts in dispute"; that the Division Director "has the power and duty to determine and correct his initial valuations and to make his final assessment" of Class II real property "according to the average ratio of assessed to true value employed in levying assessments on other real property located within [the] defendant ...