Price, Gaulkin and Sullivan. The opinion of the court was delivered by Sullivan, J.A.D.
Borough of Island Heights, petitioner herein, appeals from a judgment of the Division of Tax Appeals which affirmed the action of the Ocean County Board of Taxation cancelling the assessment for taxes on certain underwater lands held by Presbyterian Camps and Conferences, Inc., respondent herein, under a riparian deed.
The facts are not in dispute. Respondent is the owner of upland property known as lots 1-8 in block 30 in the Borough of Island Heights. This upland property is admittedly exempt from taxation under N.J.S.A. 54:4-3.6. Adjacent to said upland is certain underwater property extending out to the established bulkhead line which respondent holds, through mesne conveyances, under a grant from the State of New Jersey.
Said grant, which is dated September 19, 1932, "does hereby grant, bargain, sell and convey, subject to the terms, covenants, conditions and limitations herein contained," unto the grantee and its successors and assigns forever, the underwater land in question, "with the right and privilege, under the covenants and conditions of this grant, to exclude the tide-water from so much of the lands above described as lie under tide-water, by filling in or otherwise improving the same, and to appropriate the lands under water above described to its and their exclusive private uses." The habendum is to the grantee "and to its successors and assigns forever," subject to the terms, conditions and limitations of the grant. (The grant also included the underwater land between the established bulkhead line and the established exterior line of piers, but said land "is not to be used for any purpose whatsoever except the erection of a pier or piers thereon, underneath which the tide may ebb and flow and no solid filling shall be placed thereon.")
In 1958 the Borough of Island Heights separately assessed the riparian rights on lots 1-8, block 30 for taxation. On appeal to the Ocean County Board of Taxation the assessment was cancelled. The Borough thereupon appealed to
the Division of Tax Appeals which affirmed the county board's action and dismissed the appeal therefrom.
It is to be noted that the assessment was levied on "riparian rights on Lots 1-8, Block 30." This description is not free from ambiguity. However, both parties hereto and the Division of Tax Appeals have interpreted the assessment as being levied only on the underwater lands which respondent has the right to fill in and appropriate to its exclusive private uses, i.e. , out to the bulkhead line. For the purpose of this appeal we will consider that the assessment is so limited.
At the hearing before the Division, Presbyterian Camps and Conferences, Inc., did not contend that the land embraced in the assessment was exempt from taxation under N.J.S.A. 54:4-3.6. Instead it claimed that it did not have full legal ownership of the area in question so that such property was not separately assessable and was only an enhancement to the value of the upland, which upland was concededly exempt from taxation.
The Division, citing Polhemus v. Bateman , 60 N.J.L. 163 (E. & A. 1897), Long Dock Company v. Board of Equalization of Taxes , 87 N.J.L. 22 (Sup. Ct. 1915), and Long Dock Company v. State Board of Assessors , 89 N.J.L. 108 (Sup. Ct. 1916), sustained respondent's position and held as follows:
"In the present case what the taxpayer possessed was a riparian grant giving it the right to fill in, reclaim or improve the land and to appropriate it to its exclusive use. So far as the record shows it has never exercised that right. The land is not therefore separately assessable but any additional value by reason of the grant, adheres to the upland. The upland is admittedly exempt. The assessment was therefore properly cancelled and judgment should be entered affirming the action of the Ocean County Board of Taxation."
A discussion of the history and background of legislation involving riparian lands and the power of the State through appropriate state agency, as invested by statute, to convey such ...