For affirmance -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For reversal -- None. The opinion of the court was delivered by Jacobs, J.
The Law Division dismissed the plaintiff's complaint because of its failure to exhaust its administrative remedies. The plaintiff appealed to the Appellate Division and while its appeal was pending there we certified it on our own motion. See R.R. 1:10-1(a).
The plaintiff is a Delaware corporation engaged in business as a common carrier of goods for hire. Its principal office is in Ohio and it holds a certificate of convenience and necessity issued by the Interstate Commerce Commission. It claims that all of its activities in New Jersey are pursuant to its operations as an interstate carrier, that all of the freight it carries moves exclusively in interstate commerce, that it does not engage in any hauls which both originate and terminate in New Jersey, and that it is not taxable in New Jersey under the Corporation Business Tax Act of 1945. See N.J.S.A. 54:10 A -1 et seq. The defendant contends that although the plaintiff is a foreign corporation engaged in business as a common carrier of freight and has a business office in Ohio, it owns, leases and operates substantial properties, both real and personal, within New Jersey; that, among other things, these properties consist of large and substantial terminal and storage facilities and great numbers of motor vehicle trucks; that the plaintiff employs in New Jersey, supervisory and clerical employees and a great many truck drivers as well as other personnel engaged in operating and maintaining its facilities and motor vehicles; that it actively solicits customers in New
Jersey by means of salesmen and advertising and other promotional schemes; that it makes collections and receives reimbursement in New Jersey for services rendered in the State; that it maintains a bank account for accounts within New Jersey; that it purchases goods and items utilized by it for the purpose of maintaining, repairing and operating its facilities and motor vehicles; and that it is properly taxable under N.J.S.A. 54:10 A -2 in that during the tax years in question (1949-1959) "it was doing business in New Jersey, and employing capital in New Jersey, and owning capital or property in New Jersey and maintaining an office in New Jersey."
The plaintiff refused to file tax returns under the act and in due course the defendant issued a certificate of tax lien under N.J.S.A. 54:10 A -29 and estimated tax assessments against the plaintiff. The plaintiff did not file a protest with the defendant or seek a hearing before him (cf. R.S. 54:49-18) nor did it appeal to the Division of Tax Appeals as authorized by N.J.S.A. 54:10 A -19.2. Instead it filed a Law Division complaint in lieu of prerogative writ and for declaratory judgment. In its first count, it sought a judgment directing the defendant to certify that there are no liens on the plaintiff's property for taxes due under N.J.S.A. 54:10 A -1 et seq. and restraining the defendant from taking any proceedings to collect corporate franchise taxes due from the plaintiff and, in its second count, it sought a declaratory judgment that the statute is unconstitutional as applied to the plaintiff and that the plaintiff is not liable for the tax imposed for the year 1949 or any subsequent year. In his answer the defendant set forth various separate defenses asserting, inter alia, that the plaintiff "may not resort to the court without first having exhausted its administrative remedies by appeal to the Division of Tax Appeals." Thereafter the defendant submitted interrogatories which have been answered and supplemental interrogatories which have not thus far been answered. After the entry of a stipulation and a pretrial
order, the defendant moved for a judgment dismissing the complaint for failure to exhaust administrative remedies and the plaintiff moved for an order striking the defendant's separate defenses. Pursuant to an oral opinion, Judge Kingfield granted the defendant's motion, denied the plaintiff's motion, and entered the judgment of dismissal from which the plaintiff has appealed. We consider that the dismissal was entirely proper. See Central R.R. Co. of N.J. v. Neeld, 26 N.J. 172, 178 (1958), cert. denied 357 U.S. 928, 78 S. Ct. 1373, 2 L. Ed. 2 d 1371 (1958).
In Neeld the plaintiffs sought to attack tax assessments by the Director as illegal and as constituting unconstitutional discrimination. They filed appeals to the Division of Tax Appeals and Law Division complaints in lieu of prerogative writs. We held that the complaints should be dismissed because of the failure of the plaintiffs to exhaust their administrative remedies. In the course of our opinion we pointed out that the plaintiffs had a wholly adequate administrative appeal to the Division of Tax Appeals; that under R.R. 4:88-14 they were obliged to exhaust their appeal before resorting to the courts unless they could show that the interests of justice required earlier judicial intervention; that no such showing had been made (see 26 N.J., at p. 181); that the plaintiffs might well prevail before the Division in which event no further proceedings on their part would be necessary; and that in the event they did not prevail there they could then readily obtain suitable judicial review under R.R. 4:88-8. See 26 N.J., at p. 183; Werner Machine Co. v. Director of Division of Taxation, 17 N.J. 121, 123 (1954), affirmed 350 U.S. 492, 76 S. Ct. 534, 100 L. Ed. 634 (1956).
The controlling considerations referred to in Neeld are fully applicable here. It is true that the complaint by Roadway Express contains a count seeking declaratory relief as well as the related count in lieu of prerogative writ, but the strong policy in favor of exhaustion of administrative remedies applies equally to both counts. There
is no claim that the statute is unconstitutional on its face (cf. Schwartz v. Essex County Board of Taxation, 129 N.J.L. 129, 132 (Sup. Ct. 1942), affirmed 130 N.J.L. 177 (E. & A. 1943)), although there is a claim that it imposes a franchise tax on the privilege of doing business and is unconstitutional as applied to the plaintiff, an interstate carrier. This will, in turn, call for careful examination of the true nature of the tax (compare Railway Express Agency, Inc. v. Virginia, 347 U.S. 359, 74 S. Ct. 558, 98 L. Ed. 757 (1954) with Railway Express Agency, Inc. v. Virginia, 358 U.S. 434, 79 S. Ct. 411, 3 L. Ed. 2 d 450 (1959)) and the detailed facts relating to the properties and activities of the plaintiff within New Jersey. Under the circumstances, the taking of the necessary evidence and the making of the necessary factual findings and legal determinations, should be permitted to rest, in the first instance, with the administrative officials designated by the Legislature for that purpose.
The plaintiff relies on cases such as Ward v. Keenan, 3 N.J. 298 (1949) and Nolan v. Fitzpatrick, 9 N.J. 477 (1952), in support of its position that the administrative remedies should be by-passed here. The cited cases are readily distinguishable. In Ward, the plaintiff, a police officer, was served with departmental charges preferred by the chief of police. Before the date scheduled for departmental hearing, the plaintiff filed a complaint in lieu of prerogative writ and obtained a judgment from the Law Division directing that the charges be dismissed. On appeal, the Law Division's action was reversed upon a finding that the charges were legally sufficient on their face to call for departmental hearing and determination. Chief Justice Vanderbilt noted that under Rule 3:81-14 (now R.R. 4:88-14) judicial review may be had before exhaustion of administrative ...