Gaulkin, Kilkenny and Herbert. The opinion of the court was delivered by Herbert, J.s.c. (temporarily assigned).
Trustees under the will of William O. Allison have for many years owned a tract of land in Englewood Cliffs. This tract is known as Allison Park and contains a total of 7.808 acres. It is located on top of the Palisades and the visitor has a view to the east over the Hudson River and the City of New York. It has been carefully developed for park use with footpaths, benches, a parking area and appropriate landscaping, and is open to the public except during the winter months. No admission is charged.
For the year 1959 the Borough of Englewood Cliffs assessed Allison Park at a total of $52,065 for land and improvements.
This total was 25% of the estimated true value, that being the ratio or percentage in general use by the borough in 1959. The Allison trustees appealed to the county board of taxation which held the property exempt and set the assessment aside. When the borough appealed to the State Division of Tax Appeals the entire assessment of $52,065 was restored, and from that judgment the trustees have taken this appeal.
Mr. Allison's will is dated July 11, 1924. In it he describes himself as "of the Borough of Englewood Cliffs." Testamentary provisions pertinent for present purposes are these:
"I. It is my desire and intention to dispose by gift of a large part of my remaining estate for the purpose of pleasing Almighty God, benefitting my fellow man, and as far as possible developing that section of the Palisades along the Hudson, located in the Borough of Englewood Cliffs and vicinity.
XI. All the rest, residue and remainder of my property, real and personal, whatsoever and wheresoever situate not hereinbefore specifically bequeathed, I give and devise and bequeath unto my said Trustees, in trust nevertheless, to maintain and develop in accordance with my known wishes, the Palisades along the Hudson, in the Borough of Englewood Cliffs and vicinity. I am now formulating more definitely, plans for the development and maintenance of said Palisades, and to that end have requested two prominent residents of the City of Englewood, to submit to me a plan for such development and maintenance. If such plan is submitted and receives my approval, then I direct my Trustees to use this Trust Fund for the purpose of carrying out such plan. If, however, such plan does not receive my approval, then I order and direct my said Trustees to use this Trust Fund for the development and maintenance of said Palisades Section in accordance with my wishes as expressed to them.
XII: I hereby authorize and empower my executors and Trustees to sell any and all real property standing in my name at the time of my death, and to execute such instruments as may be necessary to effectuate this power."
The effect of paragraphs I and XI -- quoted above -- of the Allison will were long ago considered and settled. Within two months after her father died on December 18, 1924 a
daughter of Mr. Allison started suit to have his will voided. The Attorney General of New Jersey was brought into the case and filed an answer claiming that the residuary gift to the trustees was for a charitable use and valid. The Court of Chancery decided in favor of the daughter, but on appeal by the Attorney General and the trustees judgment was reversed. Noice v. Schnell , 101 N.J. Eq. 252 (E. & A. 1927), certiorari denied sub nom. Allison v. Schnell , 276 U.S. 625, 48 S. Ct. 304, 72 L. Ed. 738. The Court of Errors and Appeals stated its conclusion (101 N.J. Eq. 272) in these words:
"We deem the disposition of his residuary estate made by Mr. Allison to be a valid charitable trust, sufficiently definite for enforcement and execution in accordance with the wishes of Mr. Allison as expressed generally in his will through the trustees appointed by him, who are vested with a discretion to devise the method and ways for the accomplishment of the testator's purpose."
It is not argued here, nor was it before the State Division of Tax Appeals, that Allison Park is exempt from taxation under our statutes. N.J.S.A. 54:4-2.1, 2.2, 3.3 and 3.6. The trustees contend that the property assessed has no substantial market value, being limited to use as a public park and therefore unsaleable. The State Division disposed of this contention by holding that, in the absence of statutory exemption, restrictions on use which may destroy or impair possibility of sale cannot be allowed to become what amounts to an owner-created exemption. The State Division said:
"To hold any other view would permit an owner without the authority of law to create a tax exempt situation which would supersede the exemptions allowed by law and add one more exemption which the Legislature did not allow."
The State Division correctly concluded that Allison Park is not exempted by statute from local real estate taxation. The legislation which gives exemption to publicly owned and used property was obviously drafted with no
thought of a public park owned by testamentary trustees. N.J.S.A. 54:4-3.3 through 3.5. And the statute which confers tax benefits upon non-profit organizations applies by its terms to buildings used for schools, churches, hospitals, and the like, and only exempts land as an incident of the exemption of the buildings upon it. N.J.S.A. 54:4-3.6. There is no provision in that section for parks, playgrounds and the like, where the land itself is of primary importance and any buildings are of minor importance. Allison Park is used by a great many people because of the land itself. The caretaker's house, tool sheds and comfort stations in the park are not buildings which would have any claim to exemption under the statute nor does their existence give the park acreage any claim to exemption.
In reversing the county board and restoring the total assessment of $52,065 the Division of Tax Appeals relied upon the testimony of the borough's expert, who considered and valued Allison Park as though it were an ordinary piece of commercial property available for sale free of restrictions at any time the trustees might make up their minds to sell. Was that the correct approach to the problem? If the terms of the Allison will make it impossible, or virtually impossible to sell the park at any price, should that condition have been determined and recognized when deciding, as called for by statute, upon "true value"?
If the trustees should decide to sell Allison Park, it is extremely doubtful that they could find a buyer for what they have to offer. They have a site with great appeal, but they do not have a title which would satisfy a prospective purchaser desiring a site for business or residential use. The history of sales made and attempted by the Allison trustees is described in reported cases: City of Englewood v. Allison Land Co. , 25 N.J. Super. 466 (Ch. Div. 1953); City of Englewood v. Allison Land Co. , 40 N.J. Super. 495 (Ch. Div. 1956); affirmed 45 N.J. Super. 538 (App. Div. 1957). These cases give considerable history and we draw heavily upon them for the facts stated in the next few paragraphs.
Mr. Allison left, in round figures, an estate of $3,100,000. He owned all of the stock of Allison Land Company, and the value of this stock represented approximately $1,800,000 of his entire estate. The company owned 600 acres, more or less, of vacant land located in the northeast portion of Bergen County. In 1942 the trustees of the Allison will, who were also directors of the land company, obtained approval from the New Jersey Court of Chancery of a proposed gift of part of the Allison holdings to Palisades Interstate Park Commission. The Attorney General consented to the court's decree. Appropriate comment is made in 25 N.J. Super. , at page 469 that
"Since the Commission was committed to the duty of protecting and developing the Palisades, an objective which had occasioned the creation of the Allison trust, the conveyance could justly be considered ...