For reversal -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Weintraub, C.J.
The Camden County Park Commission "leased" to appellant Martin a portion of its property for the operation of a "milk bar." For the years 1957 through 1959 the land and building thus used were assessed for local taxation against Martin under N.J.S.A. 54:4-2.3. The Division of Tax Appeals sustained the assessments and we certified Martin's appeal before the Appellate Division considered it.
The "lease" was doubtless made pursuant to N.J.S.A. 40:37-201.1 under which the park commission "may provide and operate, or arrange for the operation of, such facilities for the use and enjoyment of its parks by the public as it may deem to be necessary and expedient"; and may authorize "licenses, privileges or franchises to individuals or corporations for the operation for private profit of any facility, utility or device within the park," subject to public bidding upon advertisement with respect to "franchises." The agreement with Martin recites compliance with the bidding provisions and evidences a purpose to accomplish the commission's public function by way of that agreement. Whether the transaction constitutes a "lease" in a technical sense or within the meaning of the statute under which the assessments were made, need not be decided.
N.J.S.A. 54:4-2.3, under which the assessments were made, reads:
"When real estate exempt from taxation is leased to another whose property is not exempt, and the leasing of which does not make the real estate taxable, the leasehold estate and the appurtenances shall be listed as the property of the lessee thereof, or his assignee, and assessed as real estate."
N.J.S.A. 54:4-2.8 provides the taxes so levied "shall * * * be a lien upon said leasehold estate and the lessee, or his assignee, shall be personally liable therefor."
The specific issue tendered the Division and also on this appeal is whether the assessments should be limited to the value of the "leasehold" interest. It is agreed the assessor made no effort to value Martin's interest in the realty, but rather used the value of the fee. Martin asked that the assessments be reduced to zero.
The question we find to be dispositive was at best obliquely suggested, but nonetheless, for the reasons stated in Howard D. Johnson Co. v. Township of Wall, 36 N.J. 443, decided this day, we will consider it.
In his analysis Martin approached the issue upon the two conceivable hypotheses which the case will permit. The first is that the "lease" was for a private purpose. The second is that the "lease" was made to further a public purpose the commission was authorized by statute to achieve either by direct operation of the facility or by an arrangement with a private operator.
Upon the premise that the "lease" was for a private use, Martin contends the statute would not authorize taxation. The statute reaches a lease transaction only if "the leasing * * * does not make the real estate taxable." Under the doctrine of Jamouneau v. Division of Tax Appeals, 2 N.J. 325 (1949), the statutory exemption given the park commission by N.J.S.A. 54:4-3.3 would fall if the property were used for a private purpose rather than the public purpose for which the exemption was intended.
See also New Jersey Turnpike Authority v. Township of Washington, 16 N.J. 38 (1954); Township of Teaneck v. Division of Tax Appeals, 10 N.J. Super. 171 (App. Div. 1950). Martin accordingly urged, and we think correctly, that if the transaction thus made the property taxable to the park commission under the doctrine just stated, as it would if the use were private, it follows there was no warrant ...