This action is a procedure in lieu of the prerogative writs of certiorari and mandamus. There is an alliance between these two proceedings. They have a common interest, but they seek different forms of relief. They will be treated separately in this opinion. The proceeding in the nature of certiorari will be considered first.
The plaintiffs are the Village of Ridgefield Park, a municipal taxing district of Bergen County, and several residents and taxpayers of Ridgefield Park. The residents and taxpayers are suing on their own behalf and also on behalf of all the other taxpayers of Ridgefield Park who are similarly situated. The defendants are the Bergen County Board of Taxation and its members, the County of Bergen and its treasurer, and the assessors of the other 69
municipal taxing districts of Bergen County. This action, in lieu of certiorari , brings before this court for review the 1959 valuation assessments for taxation on the real and personal property in each of the 70 municipalities of Bergen County; the proceedings and action of the Bergen County Board of Taxation respecting its review of the 1959 tax assessment lists of the respective taxing districts of the county; the equalization table and table of aggregates for the year 1959 prepared by the Bergen County Board of Taxation; the "apportionment valuation" of each taxing district required by N.J.S.A. 54:4-49; and the constitutionality and legality of the Bergen County taxes apportioned for the year 1959 against the Village of Ridgefield Park, together with all things touching and concerning the same.
The only taxes involved in this litigation are the Bergen County taxes. Bergen County lies on the westerly side of the Hudson River directly opposite New York City. The picturesque Palisades on the west bank of the Hudson River are in Bergen County. On the top of the Palisades lies the Palisade Interstate Park, and the beautiful Parkway leading from the George Washington Bridge northward into New York State. The westerly end of the George Washington Bridge is in the Borough of Fort Lee, Bergen County. On the westerly side of the county is the Passaic River, and halfway between the Passaic River and the Hudson River is the Hackensack River, which is navigable up as far as the City of Hackensack. The county is criss-crossed by several super-highways: Garden State Parkway, New Jersey Turnpike, State Highway Routes Numbers 4, 46, and 17, as well as several others; and it is also crossed by several railroads. The area of the county is 246.31 square miles of which 236.05 square miles is land. The estimated population of Bergen County as of December 31, 1958 was 728,044. In 1950 its population was 539,139. Bergen County is a rapidly growing county both in population and in industry and commerce.
There are 70 municipalities in Bergen County. They vary in size both in area and in population; and they are very different in their development, location, and also in their natural characteristics. The largest municipality in area, Mahwah, lies in the northwest corner of the county. It has a population of approximately 7,000, and an area of 25.93 square miles. It is primarily a residential and farming community, but it has some industry. The smallest municipality, South Hackensack, lies in the southerly part of the county. It has an area of a little more than half a square mile (.61 of a square mile), and a population of approximately 1,800. It is an important industrial community. Teterboro, also in the southerly part of the county, has a population of 30, but it has many large, modern industries. In Paramus and in the City of Hackensack, there are immense commercial and shopping centers. Leonia, Haworth, Saddle River Borough, Old Tappan and many other municipalities have no industry whatever. They are strictly one-family residential communities. Many of the other communities that are primarily single-family residential in character have some industry and some commercial establishments. Each municipality in Bergen County has its own zoning ordinance restricting and regulating the use of the land within its borders. No two municipalities are exactly alike; and there are great differences between some.
In Bergen County there is valuable river waterfront land: land which lies along the Hackensack River, Passaic River, and Hudson River. There is also valuable land along the super-highways, and land which has important railroad accommodations. There is land available for residential use, for commercial and industrial use, for farming, and for almost any other use. The value of land is determined by its availability and convenience for use. In the case of Cleveland C.C. & St. L.R. Co. v. Backus , 154 U.S. 439, 445, 14 S. Ct. 1122, 38 L. Ed. 1041, 1046 (1894), the United States Supreme Court said:
"The value of property results from the use to which it is put, and varies with the profitableness of that use, present and prospective, actual and anticipated. There is no pecuniary value outside of that which results from such use. The amount and profitable character of such use determines the value."
The value of land in Bergen County depends upon a great many different considerations.
THE LEGISLATURE'S CONTROL OVER TAXATION.
The power of taxation is exclusively a legislative function. In the early case of State (Wagner, Prosecutor) v. Collector of Taxes of Delaware Tp. , 31 N.J.L. 189, 195 (Sup. Ct. 1865), the court said that "The power of taxation is beyond a doubt a legislative power, * * *." In the case of Munday v. Assessors of City of Rahway , 43 N.J.L. 338, 346-347 (Sup. Ct. 1881), affirmed 44 N.J.L.
395 (E. & A. 1882), the Supreme Court said:
"And in the latest decision of the Supreme Court of the United States touching this subject, (Meriwether v. Garrett, ubi supra [102 U.S. 472, 26 L. Ed. 197]), all the judges concur in the view that the power of taxation is legislative, that the levying of taxes is not a judicial act, but one which belongs to the legislative department exclusively, to be performed upon considerations of policy, necessity and the public welfare.
The same doctrine has been frequently enunciated in our state courts. State v. Newark [26 N.J.L. 519], 2 Dutcher 519; State, Ruckman, v. Demarest [32 N.J.L. 528], 3 Vroom 528; State, Gaines, pros. v. Hudson Co. Ave. Com'rs [37 N.J.L. 12], 8 Vroom 12. See 2 Dill. on Mun. Corp. , § 737, (588), note 2, (3 d ed.)"
In the case of State Board of Assessors v. Central R.R. Co. , 48 N.J.L. 146, 308 (E. & A. 1886), Mr. Justice Dixon in his opinion said:
"It is laid down that the power to tax belongs to the legislature and its agents exclusively, * * *. The struggle for fairness of taxation must remain in the parliamentary arena, * * *."
In the case of Trustees for Support of Public Schools v. Inhabitants of City of Trenton , 30 N.J. Eq. 667, 678 (E. & A. 1879), the court said:
"Whether taxes be assessed by an officer elected by the people, and called an assessor, or by a commissioner appointed by a municipal body * * * are matters of little importance, which the framers of the constitutional amendments wisely left to the legislative discretion."
In the case of Spencer v. Merchant , 125 U.S. 345, 8 S. Ct. 921, 31 L. Ed. 763 (1887), the Supreme Court of the United States said:
"The power to tax belongs exclusively to the legislative branch of the government. (Cases cited.) In the words of Chief Justice Chase, condensing what had been said long before by Chief Justice Marshall: 'The judicial department cannot prescribe to the legislative department limitations upon the exercise of its acknowledged powers. The power to tax may be exercised oppressively upon persons; but the responsibility of the legislature is not to the courts, but to the people by whom its members are elected.' [Cases cited.]"
1 Cooley on Taxation (4 th ed.), sec. 64, p. 160, states the law as follows:
"The state government has inherent power to levy taxes. This means the proper department of the state. In the creation of three distinct departments of the government, and the apportionment of power between them, the authority to tax necessarily falls to the legislative. This is manifest from the slightest consideration of what taxation is. It is the making of rules and regulations under which the necessary revenues for all the needs of government are to be apportioned among the people and collected from them. Taxation is a legislative power; and when the people, by their constitutions, create a department of government upon which they confer the power to make laws, the power of taxation is conferred as part of the more general power."
See, also, State v. Branin , 23 N.J.L. 484, 494 (Sup. Ct. 1852); State (Golding, Prosecutor) v. Collector of Borough of Chambersburg , 37 N.J.L. 258, 260 (Sup. Ct. 1874); State Board of Assessors v. Central R.R. Co. , 48 N.J.L. 146
(E. & A. 1886); Jersey City v. State Board of Tax Appeals , 133 N.J.L. 202, 205 (Sup. Ct. 1945).
No matter how the proceeds of a tax are appropriated, every tax is a state tax which can only be imposed by the authority of the Legislature, subject to the constitutional requirement of uniformity. Camden & Amboy R.R. & Tr. Co. v. Commissioners of Appeal , 18 N.J.L. 71 (Sup. Ct. 1840); State (Camden & Burlington R.R. Co., prosecutor) v. Cook, Col. , 32 N.J.L. 338 (Sup. Ct. 1867); Vreeland v. Mayor, etc., of Jersey City , 43 N.J.L. 135 (Sup. Ct. 1881); State Board of Assessors v. Central R.R. Co. , 48 N.J.L. 146, 280 (E. & A. 1886).
In every municipality in Bergen County, the Legislature has created the office of municipal assessor, or a board of assessors, for the purpose of valuing property for taxation. The statutes provide for the manner in which the office of municipal assessor, or the members of a board of assessors, shall be filled. In some municipalities, the assessor is appointed by the mayor, or by the governing body of the municipality, and in other municipalities the assessor, or the members of a board of assessors, are elected by the people of the municipality. The statutes also provide for the duties of the assessor, or board of assessors, in each municipality. The municipal assessor, or board of assessors, is the agent of the Legislature for the purpose of valuing property within the municipality for the purpose of taxation. Public Service Electric & Gas Co. v. City of Camden , 118 N.J.L. 245 (Sup. Ct. 1937); Jersey City v. Martin , 126 N.J.L. 353 (E. & A. 1941); Stothers v. Martini , 6 N.J. 560 (1951); Delaware, L. & W.R. Co. v. City of Hoboken , 10 N.J. 418 (1952); Summer Cottagers Ass'n of Cape May v. City of Cape May , 19 N.J. 493 (1955). Property within a municipality can be assessed by taxation only by the assessor, or by the board of assessors, of the municipality. 3 Cooley, Taxation (4 th ed.), sec. 1046, p. 2121. An assessment of the value of property within a municipality for the purpose of taxation made by anyone
other than by the assessor for that municipality, or by the board of assessors for that municipality, is an illegal and invalid assessment, 3 Cooley, Taxation (4 th ed.), sec. 1136, p. 2292.
The Legislature of New Jersey specifically requires that:
"All property, real and personal * * * shall be subject to taxation * * * at its true value, and shall be valued by the assessors of the respective taxing districts." N.J.S.A. 54:4-1
In the section of the statute providing for the assessment of the value of personal property for taxation, the Legislature repeats its express requirement that:
"The assessor shall annually ascertain * * * according to the best of his ability and judgment * * * the true value of all the personal property * * *." (Emphasis added) N.J.S.A. 54:4-12.
And, in the section of the statute providing for the assessment of the value of real property, the Legislature once again specifically requires that:
"The assessor shall * * * determine the full and fair value of each parcel of real property situate in the taxing district at such price as, in his judgment, it would sell for * * *." (Emphasis added) N.J.S.A. 54:4-23.
N.J.S.A. 54:4-36 of the tax statute requires the assessor to annex to his tax assessment list and duplicate an affidavit in substantially the following form:
"I, , assessor of the of , do swear (or affirm) that the foregoing list contains the valuations made by me to the best of my ability, of all the property liable to taxation in the taxing district in which I am the assessor, and that I have valued it, without favor or partiality, * * * and have made such deduction only for debts and exemptions as are prescribed by law."
In volumes 3 and 4 of Cooley, Taxation (4 th ed.), appear the following statements on the law of taxation:
Sec. 1052. "Assessment is a quasi judicial act * * *." P. 2127.
Sec. 1136. "There is no valid assessment unless the valuation is made by the proper officer or board, * * *." P. 2292.
Sec. 1138. "The assessor, in valuing property, must apply his own knowledge and exercise his own judgment." P. 2293.
Sec. 1146. "* * * the assessor is to value the property according to his best judgment * * *." P. 2308.
Sec. 1601. "Assessors exercise a quasi judicial authority, and when property is to be taxed by value, the value must be determined by their judgment." P. 3181.
In the case of Weyerhaeuser Timber Co. v. Pierce County , 97 Wash. 534, 167 P. 35, 38 (Sup. Ct. 1917), the court said:
"It is well settled that the assessor and board of equalization act in a quasi judicial capacity * * *."
In the case of State (Keeler, Prosecutor) v. Tindall, Collector of Ewing , 36 N.J.L. 97 (Sup. Ct. 1872), the court said that it was the duty of the assessor to determine the actual value of the property to be assessed according to his own independent judgment, and that the determination of the value of property was committed " exclusively to the judgment of the assessor himself." (Emphasis added) In the case of Newark v. Tunis , 81 N.J.L. 45 (Sup. Ct. 1911), affirmed 82 N.J.L. 461 (E. & A. 1911), the Supreme Court said that the tax statutes had put into the hands of the assessors the power and the responsibility of fixing proper valuations on the property subject to taxation. The Court of Errors and Appeals, in its opinion in the case of United New Jersey R. & Canal Co. v. State Board, etc. , 100 N.J.L. 131 (E. & A. 1924), expressed itself as follows:
"In the case of Central Railroad Co. v. State Board of Assessors , 49 N.J.L. 1, 9, Chief Justice Beasley, speaking for the Supreme Court, said: 'We do not consider that we have the right to alter or annul any of the proceedings of this body of officers, except for palpable error, for it is not to be overlooked that the statute in
question expressly declares that these assessors "shall be entitled to use their personal knowledge and judgment as to the value of property," a capacity with which this court is not endowed by the Legislature.' The Legislature must have intended these words in the statute to have a meaning and purpose."
Corpus Juris Secundum states the law to be as follows:
"Generally, the value of property for the purpose of taxation must be ascertained by the legally constituted authorities set up and established for that purpose. In order to constitute a valid assessment of property for taxation, the valuation of the property must be made by the proper assessing officer himself, and in making the estimate he may and must apply his own knowledge and exercise his own judgment; he cannot delegate this duty to another." 84 C.J.S. Taxation § 410, b, pp. 787, 788.
In 3 Cooley, Taxation (4 th ed.), sec. 1136, p. 2292, it is stated that "There is no valid assessment unless the valuation is made by the proper officer or board, * * *." And, at p. 2308, section 1146, Cooley states that "the assessor is to value the property according to his best judgment and with honest purpose."
In the case of Colonial Life Ins. Co. of America v. State Board of Tax Appeals , 126 N.J.L. 126 (Sup. Ct. 1941), the court said:
"* * * there is no absolute standard for the admeasurement of the value of land at a given time. The constitutional and statutory test is what the sound judgment of the experienced authority set up for the purpose deems it to be, taking into consideration all factors that reasonably enter into the determination of the question."
With respect to the means or sources of information by which the assessor determines the value of property, the statute is not mandatory, but merely directory. State (Keeler, Prosecutor) v. Tindall, Collector of Ewing, supra; State (Robbins, Prosecutor) v. Treasurer and Collector of Borough of Merchantsville , 38 N.J.L. 212 (Sup. Ct. 1875); Levy v. North Bergen Twp. , 10 N.J. Misc. 850 (Sup. Ct. 1932); 3 Cooley, Taxation, sec. 1138, p. 2293.
According to the judicial decisions in New Jersey, the price at which property might be expected to sell for private use is that price which, under normal conditions, a reasonable and prudent buyer would be willing to pay, and which a reasonable and prudent seller would be willing to accept. The circumstances of such a hypothetical sale must be fair in every respect to both purchaser and seller. It must be a situation in which the buyer is not obliged to buy, nor the owner forced to sell. The selling price cannot be determined by the necessities of the buyer, that is, the hold-up price which a necessitous buyer must pay in order to get the property he needs; nor can it be the sacrifice price which a seller is compelled by circumstances to accept without benefit of fair negotiation. In the case of Hackensack Water Co. v. Division of Tax Appeals , 2 N.J. 157 (1949), the court said that "Value for the purposes of taxation has some measure of permanency which renders it secure against general temporary inflation or deflation." In the case of Ithaca Trust Co., Executor, etc. v. United States , 279 U.S. 151, 49 S. Ct. 291, 73 L. Ed. 647 (1928), Mr. Justice Holmes said that the value of property at a given time as used in law depended upon the relative intensity of the social desire for it at that time, and on prophecies of the future. See, also, Central R.R. Co. v. State Board of Assessors , 49 N.J.L. 1, 6 (Sup. Ct. 1886); Newark v. Tunis , 81 N.J.L. 45 (Sup. Ct. 1911), affirmed 82 N.J.L. 461 (E. & A. 1911); New Jersey Bell Tel. Co. v. City of Newark , 118 N.J.L. 490, 494 (Sup. Ct. 1937), affirmed 124 N.J.L. 451 (E. & A. 1940); In re Erie Railroad System , 19 N.J. 110 (1955).
To a very great extent, the price which buyers are willing to pay for property is determined by human impulses, by human wants, hopes or desires, and by physical necessities and comforts. The fair market price of property, in a particular location, is also influenced by the supply and demand for property in that location. The demand for property is a composite of the subjective prices that prospective [61 NJSuper Page 186] buyers are willing to pay. The fundamental attribute of property is the future benefits, comfort and enjoyment that arise from its ownership. It is from such intangibles that an assessor must determine the price at which property would sell for in his taxing district between a willing seller and a willing buyer. The process involves the use of the imagination and the consideration of such stuff as dreams are made on. "True value" is incapable of accurate measurement; it is a myth. Nevertheless, as defined by judicial decisions, it is the best standard we have for equalizing property values. There are many legal myths in law which are used every day, and usually serve a good purpose, but, like the "reasonably prudent person," they are sometimes hard to find and often appear about as legitimate as an old maid's children. Although the imagination plays a part in appraising property values, nevertheless an appraisal cannot lose touch with reality, and become a mere soaring fantasy. In the case of Adams Express Co. v. Ohio State Auditor , 166 U.S. 185, 222, 17 S. Ct. 604, 41 L. Ed. 965 (1899), the United States Supreme Court said that "Business men do not pay cash for property in moonshine or dreamland." A reasonably prudent buyer does not rely entirely upon random guessing. The actual buyer himself knows how much he is willing to pay for property, and the price which he is willing to pay is arrived at by his own process of logic and reasoning which ought to consist of a careful analysis of all the facts and circumstances that go to make up value within his knowledge. He should consider the selling price of comparable property, if he knows of any such sales. He should consider the reproduction cost, less depreciation, of any structures, and their degree of obsolescence. If the property is income-producing property, a prudent prospective buyer ought to calculate its value by capitalizing the income. A prudent buyer anticipates the future, and considers the future benefits that he hopes to derive from his ownership of the property. The amount he is finally willing to pay also, to some degree, depends
upon the extent of his reliance upon salesmanship; and upon his intuition, or some other mysterious occult feeling that urges and entreats him to acquire that particular piece or parcel of property, or to acquire property in a particular place or neighborhood.
There are 70 municipalities in Bergen County, and each municipality has its own assessor or board of assessors. In some of the municipalities the assessor is appointed by the mayor, or by the municipality's governing body. In other municipalities the assessor is elected by the people of that municipality. But, whether the assessor is appointed or elected, he holds his office at the pleasure of the people in the municipality of which he is the assessor. There are many times when, in order for him to remain in office, he must use expediency in making his valuation assessments. He must, if he wants reappointment, or re-election, favor the wishes of his appointing authority, or the wishes of his constituency, and make his assessments, in the manner of plucking a goose, in such a way that it will cause as little squawk as possible. When that happens, he can give very little consideration to the equal distribution of the tax burden. While a condition of this nature is deplorable, it is, nevertheless, inherent in the taxing system established by the Legislature for assessing the value of property for taxation. In most of the municipalities of Bergen County, assessing property for taxation is a part-time job, and sometimes the regular employer of the assessor is one of his municipality's largest taxpayers.
A few assessors have had experience in the valuation of real property, but there are none who are qualified to determine the value of all the personal property in their respective taxing districts, and only a very few make an effort to determine the "true value" of the personal property. Some assessors are mechanics, plumbers, or clerks; some are professional men; some are business men; and some are housewives. They are chosen from every occupation and walk of life. Except for a very few, the assessors of Bergen
County perform their duties ably and conscientiously. If they assess at a ratio of "true value," they do so in the honest belief that they are compelled to do so in order to protect the welfare of their own respective municipalities, and because public sentiment requires them to do so.
The elements of value to be considered in assessing property, and the weight to be given them rest within the judicial discretion of the assessor, and, since there are so many factors that may be considered, almost any honest assessment can be justified. But, notwithstanding the knowledge and experience, or lack thereof, for determining the value of property, real or personal, no two assessors, from different municipalities, value property alike; hence, with the very best of intentions, the valuation assessments as levied in each of the 70 municipalities in Bergen County by its respective assessor would not and could not result in uniformity throughout the County. The selling price of real property differs very widely in each of the different municipalities of Bergen County, and this is true even of real property having the same physical characteristics both as to land and improvements and subject to the same restrictions as to its use. Buying real property is not like buying a package of breakfast food. The heterogeneous character of the taxable real and personal property in Bergen County and its distribution over a large area create extraordinary difficulties in the equalization throughout the county of the valuation assessments. The assessor's knowledge of value, in general, is limited to the value of the property in his own taxing district, and in each of the 70 municipalities in Bergen County, the "true value" of property, real and personal, under the law, is just what the municipal assessor, in his judgment, says it is in his municipality. This situation is well expressed metaphorically by Humpty Dumpty in Lewis Carroll's "Through the Looking Glass," when he said, in a rather scornful tone, "When I use a word, it means just what I choose it to mean -- neither more nor less." Alice was greatly confused to think that words could mean so [61 NJSuper Page 189] many different things. Assessors are greatly confused to think that "true value" can have so many different meanings. In Bergen County the "true value" of property means at least 70 different things, for there are 70 different municipal assessors, each with an independent judgment as to the value of property in his own taxing district, and each with a different opinion of the meaning of "true value." Many municipal assessors do not even try to determine the "true value" of either the real or the personal property they assess. Some assessors testified that they did not know the meaning of "true value." Some testified that it was impossible to determine the "true value" of any property. Some assessors said that the current selling price of real property in their respective taxing districts represented an inflationary value -- one assessor said that the selling price of real property in his taxing district had tripled in the past two years. Some assessors testified that furniture, fixtures, and other appurtenances were frequently included in the selling price of residential property. Some said that the real estate agent's commissions should not be included as part of the selling price because the commissions are not a part of the price a willing seller would accept for his property. Some said that the revenue stamps on a deed were unreliable as an indication of the selling price because frequently more stamps were put on the deed than the law required, and often the property was sold subject to a mortgage so that the revenue stamps only indicated the selling price of the seller's equity. This does not mean that assessors neglect their duties. On the contrary, as I have already said, nearly all the assessors in Bergen County conscientiously and honestly do the very best they can to assess property fairly and equally, and by far most of the assessors are well qualified to perform their duties as to the valuation of real property. The condition is an inevitable condition, which is inherent in the legislative system for assessing property for taxation.
COUNTY BOARD OF TAXATION.
Section 54:3-1 of the Revised Statutes provides for the continuation of the county boards of taxation which were created and established in the several counties for the equalization, revision, review and enforcement of taxes by the act entitled "A supplement to an act entitled 'An act for the assessment and collection of taxes,' approved April eighth, one thousand nine hundred and three," approved April fourteenth, one thousand nine hundred and six (L. 1906, c. 120, p. 210), as amended and supplemented. The 1906 supplement aforesaid, as amended and supplemented, provided for the establishment in each county of a "board for the equalization, revision, review and enforcement of taxes" (Suppl. to C.S. 3475, sec. 208-37 p.). Section 54:3-11 of the Revised Statutes provides that the county boards of taxation "shall perform all the duties formerly performed by * * * county boards charged with the review or equalization of tax assessments or tax lists, and all the duties formerly performed by the county boards of assessors." Section 21 of the Tax Act of 1903 provided that the county boards of assessors shall examine the tax duplicates of the various taxing districts and, for the purpose of apportioning the county tax, "add to the ...