Clapp, Jayne and Francis. The opinion of the court was delivered by Clapp, S.j.a.d.
Appeal is taken by William J. Stack from judgments of the Division of Tax Appeals assessing 6.92 acres of land under water on the Hoboken waterfront at $20,000 an acre for the years 1952 and 1953. Stack contends that this is excessive.
On September 24, 1951, six days before the assessment date for 1952, the parcel was acquired by Stack for $100 from Hudson Realty Company, a wholly-owned subsidiary of the Lackawanna Railroad. At the time this parcel constituted a major part of the underwater lands lying between the pierhead line and Hudson's upland property at 11th Street, Hoboken. Another large portion of the pier property formerly owned by Hudson -- the portion located at 12th Street, consisting of 60% of upland and 40% of underwater property -- had been sold in 1938 by Hudson to General Foods Corp. at the rate of about $28,000 an acre.
From 1940 to 1951 the tract owned by Hudson at 11th Street, of which tract Stack's parcel was a part, was assessed by the Director of the Division of Taxation as second-class railroad property at amounts ranging from $70,300 to $66,660 an acre. N.J.S.A. 54:29 A -17. In 1952 Hoboken omitted to assess Stack's property, but the county board on application (N.J.S.A. 54:4-63.12) assessed it at $10,000 an acre; in 1953 Hoboken assessed it at $30,000 an acre, but the county board reduced the assessment to $10,000 an acre. In each of those years the Division, as above stated, assessed it at $20,000 an acre.
It is said in Stack's brief that notwithstanding the deed to him, Hoboken unsuccessfully attempted to have the property retained on the Director's rolls for 1952, as second-class
railroad property owned by Lackawanna or Hudson. The implication is that there was a hearing before the Director to which Hoboken was a party and that the question whether Lackawanna or Hudson owned the property was then determined. But the record of that proceeding is not put before us, and we have no means of knowing who were parties to it, what issues were decided and whether the doctrine of res judicata is now applicable. Hoboken seems to have claimed on the oral argument before us that the issue in that proceeding was over the date of the sale, not over the ownership of the property. However the point as to res judicata is not strongly pressed by Stack.
A more important question in the case is raised by various circumstances impugning the sale to Stack. There is no doubt but that the parcel sold him was designedly dissected from the upland. His westerly property line ends ten feet east from the bulkhead line of the Hudson River, leaving the intervening ten feet in Hudson's ownership; his southerly line is 75 feet from a float bridge which is serviced by the Lackawanna tracks and to which barges are moored; and his northerly line is 150-200 feet from the General Foods pier. On Stack's parcel is located an old pier which is connected to the bulkhead through (as he described it) a catwalk or (as described by another witness) an open deck pier 15 feet wide. However, neither under the deed, nor otherwise, was Stack given any means of ingress or egress over this catwalk or pier or in other fashion to or from the upland; indeed the deed expressly negatives an easement by implication.
Moreover, the Division found that the property was in the same use before and after the conveyance. But this apparently means merely that the property has been put to little use during these years; since the deed to Stack, no use has been made of it, except that a dredge or, on one occasion two dredges, have been moored to Stack's pier. The owner of the dredges had paid Hudson $12.50 a month rental and offered to pay the same to Stack, but Stack, on advice of an attorney unconnected with the railroad, never
collected the rent. Since the deed to Stack, the dredge has been using the property without charge.
As the Division found, there is a close relationship between Stack and the Lackawanna; in numerous proceedings from 1938 on, he has appeared in its behalf as a real estate appraiser. In the instant proceeding he testified that the true value of the property was $100 on the date of the deed to him and $7,000 ($1,000 an acre) six days thereafter. Furthermore, he orally put a price of $7,000 on it. These circumstances create imputations which Stack sought to repel by testifying that he had not made any oral or written agreement to reconvey the property to Hudson or the Lackawanna, and that he held the property "free and clear of any strings" running to Hudson, the Lackawanna or anybody else. Nevertheless, the Division found, and not without reason, that the bona fides of the sale to Stack was "seriously in doubt."
The question then is, how does that finding affect the Division's decision as to valuation? In other words, what was the theory of that decision? On this matter, we are not clear. Hoboken urged (particularly on the oral argument) that the doubt entertained by the Division, or the doubt which would be entertained by any reasonable person, as to the bona fides of the sale was a condition in which the property was held, and that this doubt therefore becomes a major factor when fixing the ...