author: Qdinn, President.

text:
    State Board of Tax Appeals.
    CITY OF NEWARK, PETITIONER, v. THE NATIONAL COMMERCIAL TITLE AND MORTGAGE GUARANTY COMPANY, RESPONDENT.
    Decided May 12, 1942.
    For the petitioner, Vincent J. Casale.

    For the respondent, Lindabury, Steelman, Zink £ Lafferty (by James L. R. Lafferty).

   Qdinn, President.

The Essex County Board of Taxation canceled an assessment in the sum of $100,000, levied for the year 1938 by the City of Newark upon the capital stock paid in and accumulated surplus of the respondent, under the provisions of Pamph. L. 1918, ch. 236, § 307 (R. S. 54:4-22; N. J. S. A. 54:4-22). This assessment was made as of October 1st, 1937, and is not affected by the revision of R. 3. 54:4-22; N. J. S. A. 54:4-22, accomplished by Pamph. L. 1938, ch. 245. The City of Newark appeals for a restoration of the assessment as made.

Under the statute and interpreting cases (Fidelity Trust Co. v. Board of Equalization (Supreme Court, 1908), 77 N. J. L. 128; 71 Atl. Rep. 61), the assessed valuation is to be determined by deducting the fixed liabilities of the company from its gross assets, thus arriving at its capital stock and surplus, and then deducting therefrom the assessed value of its real estate, and the amount of any non-taxable or exempt property entering into the determination of such capital stock and surplus, if any.

, For the tax year 1937, this board sustained an assessment in the sum of $200,000 upon this company, The National Commercial Title and Mortgage Guaranty Co. v. City of Newark, 18 N. J. Mis. R. 186; 11 Atl. Rep. (2d) 759, and that ruling was affirmed by the Supreme Court, (Supreme Court, 1940), 125 N. J. L. 503; 16 Atl. Rep. (2d) 553. We there analyzed the financial structure of the taxpayer and found that the proofs submitted indicated that only a part of the mortgage assets on its books represented its own interest therein, as distinguished from the beneficial interest in such property belonging to investors, to whom entire or partial interests in certain mortgages had been sold by the company, with guarantees of payment of principal and interest. We further found that tlie proofs did not indicate precisely what part of the assessed value of real estate assessed in the name of the company, belonged to it, free from and unéncumbered by any beneficial interest of mortgage investors therein, arising out of the foreclosure of mortgages. .We held, and were sustained by the Supreme Court in that regard, that the statutory deduction for assessed value of real estate could apply only to the assessments upon real estate belonging to the company free of trust.. 125 N. J. L. (at p. 506); and see Kelly v. Middlesex Title Guaranty and Trust Co. (Court of Chancery, 1934), 116 N. J. Eq. 228; 172 Atl. Rep. 487. We did attempt, in our opinion, to estimate the extent of the company’s interest in assessed realty, on the basis of the information before us, not by way of establishing a proper method of proof, hut in order to indicate that the city could have properly levied an assessment against the company, considerably in excess of that appealed from, within any aspect of the proofs.

Our disposition of the present appeal requires the setting forth of the company’s operating statement, as of the assessing date. Keferences to a “plan,” are to a plan of operations promulgated by the Commissioner of Banking and Insurance, trader which the company was operating on the assessing date.

ASSETS
(1) First Mortgage Loans Sold Guaranteed (Subject to Plan) . . . $958,482.35
(2) Real Estate ..... 479,210.00
(3) Accounts Receivable — Advance for payment of Taxes. Ins., etc., 116,195.42
- $1,553,887.77
(4) First Mortgage Loans Sold Guaranteed (Not Subject to Plan) . . $287,960.38
(5) Real Estate . ....... 64,967.09
(6) Accounts Receivable — Advances for payment of Taxes, Ins., etc., 1,891.80
---- 354,819.27
(7) First Mortgage Loans Deposited with Trustees to Secure Group Certificates Sold Guaranteed. $10,143,198.82
(8) Real Estate . . . 5,226,291.99
(9) Accounts Receivable —• Advances for payment of Taxes, Ins., etc., 280,373.10
(10) Cash Collateral ...... 181,453.18
--15,831,317.09
(7a) First Mortgage Loans Deposited with Trustees to Secure Group Mortgage Trust Bonds (Subject to Plan) . . ..... $739,586.95'
(8a) Real Estate .......... 78,735.52
(On) Accounts Receivable — Advances for payment of Taxes, Ins., etc., 29,542.66
--- 847,865.13
(11) First Mortgage Loans Deposited with Trustees to Secure Participation Certificates Sold Guaranteed (Subject to Plan) .... $339,285.00
(12) Real Estate ■..... 748,853.36
(13) Accounts Receivable —■ Advances for payment of Taxes, Ins., etc., 34,517.71
(14) Cash Collateral ............. ......
-- 1,122,656.07
(15) First Mortgage Loans Deposited with Trustees to Secure Part. Ctfs. Sold Guaranteed (Not subject to Plan) . ... $456,054.60
(16) Real Estate . . .... 3,428.62
(17) Accounts Receivable ........ 247.67
(18) Cash Collateral ........... 370.00
460,100.89
(19) First Mortgage Loans Pledged with Reconstruction Finance Corporation to' secure loan of $273,132.19 $647,260.70
(20) Real Estate .............. 213,644.78
(21) Accounts Receivable .......... 9,910.08
(21x) Funds on Deposit......... 4,467.2$
875,282.84
. (22) (a. First Mortgage Loans Owned by Company, 984.496.82
(b. Real Estate Owned by Company (at Cost), 713,774.09
(c. Junior Participations in Mortgages Withdrawn ........................ 391,395.45
(d. Second Mortgages Acquired Through H. O. L. C. Refinancing................ 150,816.95
(e. Cash on Hand and in Banks........... 158,862.44
(f. Investments in Stocks (at Cost) ....... 168,671.81
(g. Investments in Bonds (at Cost) 14,761.86
(h. Investments in Home Owners Loan Corp. Bonds (at Cost) .................. 51,000.00
(i. Investments in Scrip (at Cost) ........ 20.00
(j. Investments in Lawyers Title Guaranty Co. of N. J. (at Cost) ............-...... 621,346.04
(k. First Mortgage Certificates in Company issues owned by Company........... 252,425.00
(1. Interest Receivable Matured & Accrued 2,095,233.57
(m. Accounts Receivable ............... 319,921.70
(n. Notes Receivable ................... 349,150.27
(o. Interests in Tax Sale Certificates Purchased with Borrowed Funds Pledged . . 93,693.72
(p. Title Plant ........................... 1.00
Furniture & Fixtures ...... $20,331.06
Less: Reserve for Furn. &
Fix.................. 19,696.80
634.26
SusjDense 11,925.00
Total Assets $27,424,059.04
LIABILITIES
A. Guaranteed First Mortgages Issued and Outstanding (Subject to Plan).............. $1,283,680.65
B. Guaranteed First Mortgages Issued and Outstanding (Not Subject to Plan) ............. 333,929.26
C. First Mortgages Not Guaranteed............... 47,113.44
D. Guaranteed First Mortgage Participation Certificates Issued and Outstanding—Group Series (Subject to Plan) ....................... 14,437,464.27
First Mortgage Trust Bonds Da. Home Title Gty. Co. Series G. $46,200.00
Mortgage Trust Bonds
I)b. Mortgage & Title Gty. Co. Series A-B-C.............. 260,100.00
De. City Mortgage Guaranty Co. Series A to F .... ..... 468,100.00
-- 774,400.00
E. Guaranteed First Mortgage Participation Certificates Issued and Outstanding'—Participation Series (Subject to Plan) ... ...... 690,604.79
F. Guaranteed First Mortgage Participation Certificates Issued and Outstanding—Participation Series (Not Subject to Plan) .... . . 380,906.01
G. Notes Payable—Reconstruction Finance Corporation ................... 273,132.19
H. Funds Borrowed to Purchase Certificates of Tax Sales (Collateralized by Interest in Tax Sale Certificates) . . ....... . . 94,266.50
I. Mortgages Payable............ 128,600.00
J. Accounts Payable ............. 68,041.96
K. Interest Payable—Matured and Accrued . . . 2,604,264.71
L. Reserve for Depreciation on Real Estate ... . 365,813.48
M. Reserve for Contingencies and Doubtful Accounts, 2,453,791.06
Total Liabilities ....... . .. . $23,936,008.32
Capital Stocks Issued and Outstanding ......... $2,966,696.00
Surplus.............^
Undivided Profits .......(
521,354.72
- 3,488,050.72
Total Liabilities, Capital and Surplus . . $27,424,059.04

This statement was introduced in evidence by respondent, as Exhibit R-2. Its secretary-treasurer, as a witness, drew the following conclusions therefrom. First, seeking to determine respondent’s interest or equity in the guaranteed mortgages, or mortgage interests, he added items 1, 4, 7, 7a, 11 and 15, aggregating $12,924,568.10. Eeal estate representing guaranteed mortgages, being items 2, 5, 8, 8a, 12 and 16, totaled $6,601,486.58. The total for guaranteed mortgages and real estate allocable thereto is thus $19,526,054.68. Now deducting liabilities upon mortgage guarantees, including bonds of merged companies (Da, b and c), being items A, 13, D, Da, b, and c, E and E, in the sum of $17,900,984.98, there remains the sum of $1,625,069.70 as respondent’s equity in the guaranteed mortgages, and in the realty allocable thereto.

Other assets of the company are items 3, 6, 9, 9a, 10, 13, 14, 17 and 18, held on account of guaranteed mortgage interests, amounting to $644,591.54, and other company assets, items 19, 20, 21, 21x and 22, of $7,253,412.82. Gross assets of the company thus are:

As above derived $1,625,069.70
644,591.54
7,253,412.82
Total $9,523,074.06

Deductible liabilities, being items G, H, I, J, K, aggregate $3,168,305.36. The other liabilities are not deductible, not being fixed and certain. Commercial Casually Insurance Co. v. State Board (Supreme Court, 1937), 119 N. J. L. 94; Newark Fire Insurance Co. v. State Board (Supreme Court, 1937), 118 Id. 525; Universal Insurance Co. v. State Board (Supreme Court, 1937), 118 Id. 538. To this point, both the compa^ and the city are in agreement. Adjusted capital stock and accumulated surplus is then as follows:

Gross Assets ............ $9,523,074.06
Liabilities ................. 3,168,305.36
Capital Stock and Surplus . . . . $6,354,768.70

Respondent now proceeds to calculate allegedly deductible exempt and non-taxable items. There is no dispute that items 19, 22 (a), (c), (d), (f), (g), (h), (j) and (k), are properly deductible. These amount to $3,282,174.63. Respondent asserts a right also to include as a deductible exemption; item 7a, in the sum of $739,586.95. This is disputed by the city for the reason that that item has not entered into the computation of the valuation of the capital stock and surplus. This objection we think is sound. In computing respondent’s own interest or equity in its outstanding guaranteed mortgages, its witness included item 7a, and in deducting company guarantees for the purpose stated, items Da, b and c were included in the deductions. This was proper, since the said Da, b and c represent fixed bond obligations of companies merged into respondent, for which the assets in item 7a, had been deposited as security. Franklin Mortgage and Title Guarantee Co. v. City of Newark, New Jersey Tax Reports, 1934-1939, p. 793. After making these deductions it was seen above that the company’s equity in guaranteed mortgages, including item 7a, after deducting all liabilities, including Da, b and c, was $1,625,069.70. We should, of course, deduct that part of this sum which represents exempt mortgages, but to do that, and then additionally to deduct item 7a, would be to allow a reduction in the company’s assessment on account of property not entering into the determination of its capital stock and surplus, in clear violation of the rationale of the cases construing the statute. In Fidelity Trust Co. v. Board of Equalization, supra, the court said that after determining the net assets of a company under this statute, it is necessary to inquire:

“Is this net result made up in whole or in part of nontaxable property? If so, then such non-taxable securities must be deducted; for to tax the fund, composed of exempt property, is to tax such exempt property. Newark City Bank v. Newark, 30 N. J. L. 13.”

We conclude thus that respondent is not entitled to any deduction of item 7a, other than in the sense that it contributes to the mortgage constituent of the net figure of $1,625,069.79, supra, for which a proper deduction should be allowed. Both the city and the respondent take the view that, although the exact mortgage content of that figure is not in evidence, it may be estimated as 66 2/3% thereof, as against 33 1/3% for real estate. This amounts to $1,083,379.78, and is the figure deductible as respondent’s mortgage interest in the guaranteed mortgages.

There remains for consideration the question of deduction for assessed realty. Respondent has computed its own interest in the total assessed valuation of realty held by it, as amounting to $1,394,417.16. The city’s expert computes it as $1,171,408.56. Heither of the experts has proven that which is crucial in this regard, i. e., the assessed value of all real estate held by respondent free of any trust. Assuming, though not conceding, the accuracy of respondent’s figures in this connection, however, there nevertheless remains, after making all proper allowances, a taxable balance against respondent in excess of the assessment.

Adjusted Capital Stock and Surplus............ $6,354,768.70 .
Non-taxable Property Generally...... $3,282,174.63
Interest in Guaranteed Mortgages .... 1,083,379.7S
Respondent’s figures as to its estimated interest in asesssed realty ........ 1,394,417.76
Total . . . .'.............. $5,759,971.57
Minimum Taxable Balance ..................... $594,797.13

It results that the judgment of the Essex County Board must be reversed and the assessment originally made by the city restored.

Judgment accordingly.


source: Caselaw Access Project

author: Quinn, President.

license: Public Domain

text:
    State Board of Tax Appeals.
    CITY OF JERSEY CITY, PETITIONER, v. TRUSTEES OF CONGREGATION ANSHEI SFARD, RESPONDENT.
    Decided May 12, 1942.
    Eor the petitioner, Frank P. McCarthy.

      For the respondent, Gross & Gross (by Julius Lichtenstein).

   Quinn, President.

Petitioner taxing district brings these appeals from judgments of the Hudson County Board of Taxation, disposing of appeals by the taxpayer from assessments of real property owned by it in said taxing district, for the years 1936 and 1938. The subject-matter of the 1936 appeal is property at the corner of Academy Street and Bergen Avenue, in Jersey City, then designated as Block 1871, Lot 1 and the rear sixty feet of Lot 2A, adjacent to Lot 1, all then assessed together. The 1938 appeal is confined to property substantially the same as Lot 1, but changed in designation to Lot IB, Lot 2A being separately assessed in 1938. A two-storv frame structure is situated on Lot IB, and was, at all times herein material. As of October 1st, 1935, there was an additional building situated in the rear of Lot 2A used as a dwelling but demolished since that date.

The assessment for the year 1936 was in the sum of land, $236,700, improvements, $6,000, total $242,700. The appeal to the county board prayed a cancellation of the entire assessment, on the ground the property was actually devoted to religious uses. We do not know what transpired before the county board, but the judgment entered by that body, as recorded on the face of the original petition of appeal, reads, “Reduced $136,700 land and $1,500 Bldg, includes cancellation for congregation.”

Although this language is not entirely clear, it would appear that the intention of the county board was to exempt the structure used for religious purposes and that part of the land which consists of Lot IB, but to leave subject to assessment the other structure and the rear 60 feet of Lot 2A. In any event, we will so treat the county board determination. Ho proofs of valuation have been adduced before us and the ease has been tried and argued exclusively upon the question of the right to exemption of the property exempted by the county board.

The assessment for the year 1938 was in the sum of land $123,300, improvement $1,500, total $124,800. The county board judgment was one of cancellation, obviously on the theory that the property is entitled to exemption from taxation.

Petitioner seeks a restoration of the assessments to the figures originally fixed by the city assessors for each of the years under appeal.

It is conceded by petitioner that the proofs establish the irse of the structure on Lot IB by the respondent exclusively for religious purposes, as of the assessing dates, October 1st, 1935, and October 1st) 1937. Bespondent’s claim to exemption from taxation is based upon Pamph. L. 1931, oh. 372, § 1 (B. 8. 54:4-3.6; N. J. S. A. 54:4-3.6), exempting buildings and the land whereon situated, not to exceed five acres, exclusively used in the work of corporations organized, inter alia;, for religious purposes.and not for profit, provided the property is owned by the corporation in question. The proof adduced satisfies us that all of the statutory requisites for exemption, for the years in question, have been met by the respondent, but the city demurs with respect to the requirement of ownership. It is insisted on its behalf that respondent’s title to the property is something less than thq absolute legal ownership which it regards as necessary under the cases construing the act. The pertinent facts are as follows:

The deed to the premises is a deed of warranty, dated September 13th, 1935, and recorded in the office of the Hudson County Begister on the same date. The grantor is Humber One Corporation and the conveyance is to the Trustees of Congregation Anshei Sfard, a religious corporation. After describing the premises, there is the following recital:

“The above described lands and premises are to be used by the grantee herein named as a house of worship according to the tenets of orthodox Judaism, and as a free school of religion) and as a place of dwelling of the Babbi or sexton thereof.”

It further appears that on January 31st, 1936, a parcel of property including that here under appeal, was sold for unpaid taxes by the city, and that a tax sale certificate was issued therefor to the City of Jersey City, which certificate was outstanding upon October 1st, 1937.

' The contention of the city is that the quoted excerpt from the tleed constituted a restriction upon the title fatal to the right of exemption for both of the years 1936 and 1938, and that the outstanding tax certificate was an additional objectionable qualification upon the title, as of the assessing date for the year 1938. Its reliance is upon the decisions of the Supreme Court in Young Men’s Christian Association of Garfield v. City of Garfield (Supreme Court, 1936), 14 N. J. Mis. R. 847; 186 Atl. Rep. 703, and City of Trenton v. Trenton Masonic Temple Association (Supreme Court, 1930), 8 N. J. Mis. R. 778; 151 Atl. Rep. 753; affirmed (Court of Errors and Appeals, 1931), 108 N. J. L. 419; 158 Atl. Rep. 395, and several decisions of this board in accord. In none of the cases referred to, however, was there any holding broader than that the statutory requirement of ownership in the exemption claimant calls for the vesting of legal, rather than equitable or beneficial title in such claimant. The use of the words “absolute title,” by this board, in certain cases passing upon the quality of title contemplated by the statute, was not designed to imply any ruling not required for the decision of the particular cases before us. Atlantic District, &c., v. City of Union City, New Jersey Tax Reports, 1934-1939, p. 649; Trustees, &c., v. City of Passaic, Id. p. 672.

Neither of the objections asserted by petitioner herein affects the status of respondent as the legal owner of the property. The restrictive language in the deed to respondent does not rise to the status of a conditional limitation or a condition subsequent, assuming that in either of such cases the exemption would fail, as to which, however, we express no opinion. See Board of Education of West Paterson v. Brophy (Court of Chancery, 1919), 90 N. J. Eq. 57; 106 Atl. Rep. 32; Hewitt v. Camden County (Circuit Court, 1929), 7 N. J. Mis. R. 528; 146 Atl. Rep. 881; Mills v. Davison (Court of Chancery, 1896), 54 N. J. Eq. 659; 35 Atl. Rep. 1072; McKenzie v. Trustees of Presbytery of Jersey City (Court of Errors and Appeals, 1905), 67 N. J. Eq. 652; 61 Atl. Rep. 1027; In re Young Women’s Christian Association (Court of Chancery, 1924), 96 N. J. Eq. 568; 126 Atl. Rep. 610; Cuthbert v. McNeill (Court of Chancery, 1928), 103 N. J. Eq. 184; 142 Atl. Rep. 667.

.As to the outstanding tax sale certificate, that constituted a mere lien upon the property until its foreclosure, and not a defeasance of respondent’s title. Mitsch v. Owens (Court of Chancery, 1913), 82 N. J. Eq. 404; 89 Atl. Rep. 292; Atlantic City v. Gardner (Court of Chancery, 1938), 124 N. J. Eq. 110; 199 Atl. Rep. 724; Fuchs v. Syndicate Realty Co. (Court of Errors and Appeals, 1930), 107 N. J. Eq. 506; 153 Atl. Rep. 584.

J?or the reasons stated, respondent is entitled to exemption of the structure from taxation for each of the years in question. There appearing no serious question as to the necessity of the land for the fair enjoyment of the structure, that is likewise subject to exemption under the statute.

The judgments of the county board for the years 1936 and 1938 will be affirmed.


author: Kinicead, S. G. C.

text:
    ANGELO STROLLO, PLAINTIFF, v. JERSEY CENTRAL POWER AND LIGHT COMPANY, A BODY CORPORATE, A. CHESTER CONROW AND RAY MATHIS, DEFENDANTS.
    Decided June 10, 1942.
    For the plaintiff, Parsons, Labrecque & Borden.

    For the defendants, Autenrieth & Wortendylce.

   Kinicead, S. G. C.

This is a motion to strike the complaint, on the ground that the gist of the plaintiff’s cause of action is an action for slander, and therefore should be dismissed because it is barred by the statute of limitations.

Suit was instituted on May 10th, 1938, and the complaint alleges the cause of action arose on May 22d, 1936, at which time it is claimed that the defendant, The Jersey Central Power and Light Company, by its agents and servants, A. Chester Conrow and Ray Mathis (who are joined as defendants) did on said date and at various other times and dates, conspire, act in concert and maliciously conceive a scheme to interfere with the plaintiff’s employment and to procure the plaintiff’s discharge therefrom.

Paragraphs 4, 5 and 6 of the first count (which are substantially analogous to paragraphs 4, 5 and 6 of the three other counts), are as follows:

“4. The defendants, Jerséy Central Power and Light Company, by its agents and servants, A. Chester Conrow and Bay Mathis, did on or about May 22d, 1936, and at various other times and dates, conspire, act in concert and maliciously conceive a scheme to interfere with the plaintiff’s employment and to procure the plaintiff’s discharge therefrom.
“5. In pursuance of such scheme and conspiracy and with the purpose and intent of maliciously and fraudulently interfering with and terminating the employment of the plaintiff by his master, the defendants, Jersey Central Power and Light Company by its agents and servants, A. Chester Conrow and Bay Mathis, did then and there and continuously thereafter spread false and malicious statements and rumors concerning the honesty and integrity of the plaintiff and did with purpose, intent and malice communicate such fraudulent, malicious and untrue statements to the master of the plaintiff with the result that because of such fraudulent, malicious and untrue statements and rumors, the plaintiff was discharged by his master and his right to hold his position was interfered with and his ability to gain other employment damaged and terminated.
“6. By reason of the willful, malicious and fraudulent acts of the defendants and their willful, malicious and fraudulent conspiracy, the plaintiff has lost his position and employment, has been deprived of his earnings, has been unable thereafter to obtain employment and has suffered great harm and damage to his reputation as an honest employee.”

The allegations of the complaint are amplified by the bill of particulars furnished by the plaintiff.

Question 3 in the demand for bill of particulars makes inquiry as follows:

“Itemize and describe each and every overt act done or committed by the defendants or anjr of them, giving the date and place of each of said acts, which, as is alleged in paragraph 4 of the .First Count of the complaint, made up the conspiracy or scheme referred to in said paragraph.”

The answer to the foregoing question in the bill of particulars is as follows:

“On May 22(1 Rajr Mathis, in company with another employee of the defendant, stated that the plaintiff was stealing juice.
“On May 29th A. Chester Conrow stated that Strollo was suspected with-tampering with an electric meter.
“At an unknown date, Ray Mathis stated that Strollo had been stealing juice.
“At an unknown date, the vice-president of the defendant company stated that Strollo was guilty of stealing juice and of tampering with a meter.
“All of the words described in this bill of particulars are indefinite and may not he in the exact words used but all the charges made against the plaintiff were of the general purport that he had been stealing electricity.” -

In addition to the foregoing, the demand for bill of particulars made inquiry in question No. 5 as to “the date and place of the making and spreading of each allegedly false and malicious statement and rumor referred to in paragraph 5 of the First Count of the complaint herein, and * * * the name of each individual and his relationship to the defendants, or any of them, who made or spread any of the said allegedly false and malicious statements or rumors, together with the name of each person to whom said statements or rumors were made or otherwise conveyed.” In answer to this question the plaintiff, in his bill of particulars, stated that on May 22(1 Ray Mathis and another employee whose name Is unknown, spread a false and malicious statement at Melrose Terrace, Long Branch; that on May 29th A. Chester Conrow made a malicious and false statement at the Garfield Grant Hotel at Long Branch; that at a date unknown, Ray Mathis made a false and malicious statement in a lunch room; and that at a date unknown, the vice-president of the defendant corporation made a false and malicious statement either over the telephone or personally to the general manager of the Monmouth Consolidated Water Company at a place unknown.

Question y of the demand for bill of particulars inquires:

“What act or acts, statement or statements of the defendants, or any of them, does plaintiff contend to have been'the cause or causes of plaintiff’s alleged loss of his position and employment as mentioned in said paragraph 6 of said First Count ?” to which plaintiff answers:
“The spreading of the false and malicious statements that the plaintiff had attempted or had stolen electricity from the defendant while the plaintiff was an employee of another utility.”

If the allegations of the complaint and the answers in the bill of particulars are true, the plaintiff could have sued for slander within one year of the making of the alleged slanderous utterances.

However suit was not instituted until the lapse of nearly two years from the date the cause of action arose. B. S. 2:24-3 provides as follows:

“Every civil action for slander or libel shall be commenced and sued within one year next after the publication of the alleged libel or slander, and not thereafter.”

Therefore, if the gist of the plaintiff’s cause of action is slander, as contended by the defendants, the motion to strike the complaint should prevail.

The plaintiff, however, contends that he is not limited to a suit for slander, but that he has the right to sue the defendants because they wrongfully caused him to lose his employment by the slanderous and untrue statements they made concerning the plaintiff to his employer.

The act of an individual, who maliciously and without justifiable cause induces an employer to end the employment of an employee, is an actionable tort regardless of whether the inducement be by false slander or by successful persuasion. Moran v. Dunphy, 177 Mass. 485; 59 N. E. Rep. 125; Perkins v. Pendleton, 90 Me. 166; 38 Atl. Rep. 96.

In Brennan v. United Hatters, 73 N. J. L. 729; 65 Atl. Rep. 165, Mr. Justice Pitney speaking for the Court of Errors and Appeals (at p. 742) stated:

“The common law has long recognized as a part of the boasted liberty of the citizen the right of every man to freely engage in such lawful business or occupation as he himself may choose, free from hindrance or obstruction by hi' fellowmen, saving such as may result from the exercise of equal or superior rights on their part—such, for instance, as the right of fair competition in the like field of human effort—and saving, of course, such other hindrance or obstruction as may be legally excused or justified.
“This right is declared by our constitution to be unalienable. The first section of the bill of rights sets forth that ‘All men are by nature free and independent, and have certain natural and unalienable rights, among which are those of enjoying and defending life and liberty, acquiring, possessing and protecting property, and of pursuing and obtaining safety and happiness.’ ”

'■ The opinion of the court closes on page 750 with the following statement:

“Upon both reason and authority, therefore, we are of the opinion that the acts of the defendants herein, as above recounted, amounted to an unwarranted interference with the plaintiff in his trade as a hatter, and he having sustained damage as a result thereof in losing his place of employment the present action is sustainable.”

In Van Horn v. Van Horn, 52 N. J. L. 284: 20 Atl. Rep. 485, the plaintiff started suit against the defendants for malicious conspiracy to drive the plaintiff out of her business. The means alleged to have been employed included the enticement of plaintiff’s servant, the procurement from the servant of valuable information, the use of this information to break up a valuable business connection of the plaintiff’s by means of false and fraudulent representations, and the sending of threatening letters to plaintiff’s customers. In passing upon the demurrer to the pleading thus framed, Mr. Justice Scudder thus expresses the opinion of the Supreme Court at page 287, and in the last paragraph on page 289 :

“It is an action on the case, setting forth a malicious conspiracy or confederation, with the means employed to effect its purpose, and the resulting damages to the plaintiff. * * * The basis of action seems here to be, as stated in the declaration, the fraudulent and malicious acts of the defendant in driving the plaintiff, Emma D. Van Horn, out of her business; the statement of the means used to effect this purpose all combine to produce a single cause of action * *

After the declaration had been held good, the defendant pleaded the statute of limitations applicable solely to slander. The question raised by the second demurrer was whether or not the action was for words spoken. The Supreme Court in an opinion reported in 53 N. J. L. 514; 21 Atl. Rep. 1069, expressed itself as follows (at p. 515) :

“We agree entirely with the conclusion heretofore reached in this court that this is an action on the case for malicious injury to the plaintiff in her business and not an action for words.”

In the case sub judice, the plaintiff had the option (before the expiration of the statute of limitations), of suing for slander. In such a type of action he could possibly have proven by way of aggravation of damages, his loss of employment as a result of the slander.

But the authorities heretofore cited from Hew Jersey and other states clearly demonstrate that the causing of the loss of a person’s employment wrongfully and maliciously is actionable. It cannot be contended in the instant case that slander is the gist of the action.

In Brennan v. United Hatters, supra, the court (at p. 737) said:

“In our opinion, the gist of the action is the damage caused to the plaintiff by an unwarranted interference with him in his employment as a hatter.”

The Court of Errors and Appeals affirmed the decision of the Supreme Court in Van Horn v. Van Horn, supra. Our highest court in its opinion which is reported in 56 N. J. L. 318, declared (at p. 323) :

“The rule to be deduced from these cases, and one which has the most ample support, is that, while a trader may lawfully engage in the sharpest competition with those in a like business by holding out extraordinary inducements, by representing his own wares to be better and cheaper than those of others, yet when he oversteps that line and commits an act with the malicious intent of inflicting injury upon his rival’s business, his conduct is illegal, and if damage results from it the injured party is entitled to redress.
"Nor does ii mailer whether the wrongdoer effects his object by persuasion or by false representation. The courts loots through the instrumentality or means used to the wrong perpetrated with the malicious intent, and base the right of action upon that." (Italics supplied.)

The gravamen of the complaint under consideration is the alleged wrongful intent, on the part of the defendants, to maliciously cause the plaintiff to lose his employment. Slander was the means allegedly used by the defendants to accomplish their wrongful design, but their malicious intent rather than their alleged slander is nevertheless the gist of this cause of action.

The motion is denied.


text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    WILLIAM C. WALLACE, PETITIONER, v. AMERICAN CYANAMID CO., RESPONDENT.
    Decided June 8, 1942.
    For the petitioner, Avidan & Avidan (by Alexander Avidan).

    For the respondent, Whittemore, McLean & Hand' (by Ciarle McK. Whittemore).

   The petitioner claims compensation for a disease of the heart, variously described by some as of luetic and hypertensive origin, by others as luetic aortitis and further as arteriosclerosis. Petitioner claims that he met with an accidental injury on September 11th, 1940, which caused an aggravation of a pre-existing heart condition to the extent of 30% of partial total disability.

The claim of the respondent appears to be that the petitioner did not sustain an accident within the meaning of the Workmen’s Compensation Act, and further, that petitioner’s condition is the result of a natural progress of the disease unrelated to any trauma or accident.

The testimony submitted on behalf of the petitioner indicates that the petitioner was employed by the, respondent for a period of approximately eight years prior to September 11th, 1940, working first as a chef, then in the janitor’s department, and for the past three years prior to September 33th, 3940, in the laundry department. Petitioner’s work in the laundry department was entirely of a physical nature for approximately eight hours a day for a five-day week. 3 lis work required him to first remove certain soiled overalls onto a hand truck, then pushing the truck to a washing machine; remove the soiled overalls into the washing machine, then pulling out the wet overalls from the washing-machine back onto the hand truck, thence to a dryer machine and ultimately to a final place for distribution. Pulling out the wet overalls from the washing machine was described by the petitioner as strenuous work. Pushing the truck, which weighed when loaded approximately 300 pounds, and moved on four small wheels, was also described as strenuous.

On the particular day in question, on September 31th, 1940, the petitioner testified that while he was pushing this hand truck filled with the overalls, one of the wheels was caught with some lint and he was obliged to apply some extra effort to push the hand truck along, at which time he felt this sudden sharp pain in his chest and fell over the hand truck, remaining there for about five or six minutes. This incident occurred at about 11 A. M. in the morning. After the period of rest he emptied the hand truck, reported the incident to his foreman, Mr. Bek, and asked for leave to report to the first aid room, which permission was given him. The petitioner did actually report to the first aid room on the date of September 11th, 3 940, at approximately 11 A. m. in the morning, when he was examined by the plant doctor, and after an X-ray was taken he was told to report back at the end of his day’s work, which he did. On reporting back at the end of his day’s work on September 11th, 1940, he was told that he would not be able to work any more for at least two to three months and there was some suggestion that he had a heart condition. He was then told to report to a Dr. Pogoloff, who treated this petitioner for approximately 26 weeks.

Dr. Appelbaum, who is an expert in diseases of the chest, including the heart, testifying for petitioner, stated that in his opinion the petitioner was suffering from a pre-existing disease of the heart of probable luetic and hypertensive origin; that the petitioner did sustain an accidental strain on September 11th, 1940, as evidenced by the heart attack and the pains attendant therewith; that the accident of September 11th, 1940, aggravated the pre-existing heart condition and further, that the physical requirements of the petitioner’s work likewise contributed to the accidental strain of the heart, which occurred on September 11th, 1940. It was the opinion of ■Dr. Appelbaum that the petitioner’s existing permanent disability was 60% of partial total disability, but that in his opinion 30% thereof was attributable to the accident of September 11th, 1940.

The testimony of the petitioner’s wife is largely corroborative with some minor misstatements and needs no further elaboration here.

. The testimony in this case also refers to a previous incident which occurred in May, 1940, when the petitioner alleges that he suffered a heart attack while pulling out some wet overalls from the washing machine. This incident is not further considered here by reason of the reliance upon the incident of September 11th, 1940, the last date of employment.

The 'respondent’s claim from the medical standpoint appears to be that the petitioner’s resulting condition would have resulted from the normal progress of the disease and that the occurrence of September 11th, 1940, did not aggravate .the pre-existing condition.

The respondent first produced Dr. Parsonnett, an expert in diseases of the heart, who testified that the petitioner was suffering from a condition of arteriosclerosis of the heart; that in his opinion the occurrence of September 11th, 1940, did not aggravate the pre-existing condition; that in his opinion stress or strain cannot aggravate a pre-existing heart condition.

Dr. Eowland for the respondent stated that he examined the petitioner on March 19th, 1942; that in his opinion the petitioner was suffering from a condition of luetic aortitis with a possible arteriosclerosis; that this condition would subject the petitioner to a heart attack at most any time, whether at work or at-rest; that the accident of September 11th, 1940, did not aggravate the pre-existing condition for in his opinion he would not acknowledge that stress or strain can aggravate a pre-existing condition of the heart unless such effort proved fatal.

Drs. Pogoloff and Mangelsdorff, both testifying for respondent, while expressing the opinion that the accident of September 11th, 1940, did not aggravate the pre-existing condition, stated that they were general practitioners, the former specializing, in addition thereto, in venereal diseases, and the latter being the respondent’s physician at the plant. Dr. Pogoloff stated that he treated the petitioner for 26 weeks, one treatment a week at a charge of $2 per treatment.

With respect to the disputed controversy as to the causal .relation between the accident of September 11th, 1940, and physical effort upon the pre-existing heart condition, I am of the opinion that the petitioner lias shown by the preponderance of the evidence that the accident of September 11th, 1940, did aggravate the pre-existing heart condition, and further that the physical effort of the employment did contribute to the ultimate heart condition of the petitioner in this case. That physical strain or effort may be a contributing cause in the aggravation of a pre-existing diseased heart would seem no longer ojien to doubt under our decided cases. Hertzberg v. Kapo Dyeing and Printing Co. (Department of Labor), 19 N. J. Mis. R. 201; 18 Atl. Rep. (2d) 736. Accord: Cooke v. Cooke & Cole Silk Co., 19 N. J. Mis. R. 581; 21 Atl. Rep. (2d) 853.

1 am further satisfied that the petitioner’s proofs in this case come within “the settled rule that if the employment ‘is one of the contributing causes without which the accident which actually happened would not have happened,’ the statutory requirement in this behalf is met. Geltman v. Reliable Linen and Supply Co. (Court of Errors and Appeals), 128 N. J. L. 443; 25 Atl. Rep. (2d) 894, 897.

With respect to the disputed proofs with respect to the accident or the occurrence of September 11th, 1940, the respondent’s testimony does not appear to be directly in contradiction to the petitioner’s claim.

The foreman, Mr. Eck, stated substantially that he has no recollection of the occurrence of September 11th, 1940. The same is true for the co-workers, Mr. Charles G. Blair and Mr. Stephen Grabowski. None of these individuals had any definite knowledge of the fact that the petitioner did work on that day or that he had even gone to the first aid room, which was admitted by all. The plant doctor, Dr. Mangelsdorff, admitted receiving the petitioner on September 11th, 1940, at approximately 11 o’clock, receiving these complaints referable to the heart. Dr. Mangelsdorff’s records pertained only to the conditions of health of the petitioner.

The doctors produced on behalf of the respondent, who did receive the history of what occurred on September 11th, 1940, all substantially conceded that the petitioner told them of having this heart attack on the day in question, September 11th, 1940, but that their records do not indicate that the petitioner told them of having had an accident or of applying any unusual effort. Accident and unusual effort here appear to be conclusions of law and further, there is no testimony to indicate that the doctors asked the petitioner specifically as to what had occurred and that they wrote down specifically what the petitioner told them had occurred. The effect of their testimony is simply that the petitioner had this severe heart attack while at work. I find no reason to discredit the testimony of the petitioner- as to the happening of the incident of September 11th, 1940, merely because he did not relate these historical facts to a treating physician. We may well repeat the quotation of the Passaic County Court of Common Pleas in the case of Cooke v. Cooke & Cole Silk Co., supra:

“Some people are reticent, and others communicative, about their state of health. The silence of petitioner-appellee appears to have been entirely in character with his temperament and habit.”

With respect to the mechanical experiments offered in this ease, I am not very much impressed. The attempt to show that the wheels could not be clogged by any amount of lint did not succeed. The wheels produced in court showed that there was a very small amount of clearance between the top surface of the wheel and the lower surface of a steel plate directly above the wheel. The clearance here varied between Vs to % of an inch. This would seem to lend credence to the claim of a blockage of the wheel.

With respect to the attempt to show the amount of force required to move the hand truck by the use of a fish scale, the important consideration here is the fact that the petitioner did sustain a heart attack as a result of the application of effort. Our cases are numerous in showing what a small amount of effort may be required to aggravate a pre-existing diseased heart. In the second place I am not satisfied that there is an identity of circumstances between the accident claimed and the experiment shown. In the experiment the truck was pulled whereas in the facts of the case the truck was pushed. Again, what evidence is there to show that the human energy expended by a healthy person which may register a mechanical force of 15-20 pounds, would be the same amount of energy applied by a sickly person in producing the same amount of mechanical force, namely, 15-20 pounds. The human body is not mechanically perfect and therefore a considerable greater amount of energy may be required of a sickly person to produce a mechanical force of 15-20 pounds than would be required of a healthy person, and further, the witness in this case, who pulled the truck, stated that he looked back to record the readings on the fish scale after the truck was in motion. This would not seem to indicate the amount of force that would be required at the •precise moment when the truck changes its position from that of a stationary truck to that of a moving one.

Some emphasis is made by the respondent with respect to the signing of a certain form b3r the petitioner as a basis for collection of health insurance as being considered as an admission against interest almost akin to a bar by estoppel or release. In the first place the petitioner stated he did not read the contents of this printed form which was apparently signed by the employer as well as the petitioner. In compensation law even the signing of a release would be no bar to a meritorious consideration of petitioner’s claim. P. Bronstein & Co., Inc., v. Hoffman, 117 N. J. L. 500; 189 Atl. Rep. 121. We are here dealing with an interpretation of facts in an attempt to reach a conclusion as to whether or not this petitioner sustained an accidental injury or an injury by accident within the meaning of the Workmen’s Compensation Law and for that reason much weight'cannot be given to the signing of this formal statement.

With respect to the claim for temporary disability, the proof appears undisputed that petitioner was treated for a period of 26 weeks; that the charge for this treatment was $2 a treatment per week or $52. The fact that petitioner has paid premiums under a health insurance policy during this similar period cannot operate to the credit of the respondent in this case. Barbour Flax Co. v. Hagerty (Supreme Court), 89 Atl. Rep. 919; 85 N. J. L. 407.

There has apparently been some differences of opinion as to the law applicable to this case as gathered from the briefs submitted. There has been much decided law in connection with heart cases in the field of compensation and we here set forth those principles and cases which we consider applicable.

“An accidental strain of a heart, even though the heart was previously weakened by disease, may be a compensable injury under our statute when as in this case, the accident arose out of and in the course of the employment.” Bernstein Furniture Co. v. Kelly (Court of Errors and Appeals), 115 N. J. L. 500; 180 Atl. Rep. 832; Hentz v. Janssen Dairy Corp. (Court of Errors and Appeals), 122 N. J. L. 494; 6 Atl. Rep. (2d) 409.

Nor can the claim for compensation be defeated because of the absence of unusual effort or strain. Hentz v. Janssen Dairy Corp., supra; Ciocca v. National Sugar Refining Company of New Jersey (Court of Errors and Appeals), 124 N. J. L. 329; 12 Atl. Rep. (2d) 130, 133; Molnar v. American Smelting and Refining Co. (Court of Errors and Appeals), 24 Atl. Rep. (2d) 392, 393, where the court said:

“The degree of exertion is of no consequence, so long as the performance of the required'work caused a strain upon the heart.”

If a pre-existing condition is aggravated by an injury in employment, the injury is compensable and it is not necessary that the accident complained of be shown to be the sole contributing cause to the injury of the employee. Davis v. Lotz (Supreme Court), 126 N. J. L. 615; 20 Atl. Rep. (2d) 602.

The requirement that the injury arise by accident is satisfied if the claimant discharges the burden of proving that the condition complained of, that is, the injury, is related to or affected by the employment, that is to say, if but for the employment it would not have occurred. Bollinger v. Wagaraw Building Supply Co., 122 N. J. L. 512; 6 Atl. Rep. (2d) 396; Tauzman v. Shelton Dress Shop (Supreme Court), 11 Atl. Rep. (2d) 317.

As to the nature of the proof required, our courts have hold : “That probability, and not the ultimate degree of certainty, is the test.” Auten v. Johnston (Supreme Court), 178 Atl. Rep. 187.

Where the employer seeks to establish the cause of injury as being other than as claimed by the petitioner, the burden of such proof is upon the employer. Atchison v. Colgate & Co. (Supreme Court), 3 N. J. Mis. R. 451; 128 Atl. Rep. 598; affirmed, 102 N. J. L. 425; 131 Atl. Rep. 921; George T. Newell, Jr., v. Workmen’s Compensation Bureau, 9 N. J. Mis. R. 1123; 157 Atl. Rep. 243. i\i íjí H* *!'

It is * * * ordered that judgment shall be entered in favor of the petitioner and against the respondent.

Harry S. Medinets,

Deputy Commissioner.


text:
    State Board of Tax Appeals.
    BOROUGH OF WANAQUE, PETITIONER, v. NORTH JERSEY DISTRICT WATER SUPPLY COMMISSION, RESPONDENT. JOHN A. TOOHEY, PETITIONER, v. NORTH JERSEY DISTRICT WATER SUPPLY COMMISSION, RESPONDENT.
    Decided June 2, 1942.

      Bor the petitioners, Rober 0. Ricker, John 0. Flanigan, Paul J. Puffy and Milton Schamack.

    Bor the respondent, Oscar R. Wilensky.

   Quinn, President.

Petitioners seek an increase in the assessed valuation of the land of the respondent, situated in the petitioner taxing district, and there assessed for taxes for the year 1940 in the sum of $162,900, or at an average valuation of $100 per acre for the property involved. The prayer of the petitions is for an increase of the assessment to the sum of $977,400, or at the rate of $600 per acre. The individual petitioner is a taxpayer of the borough. The respondent is a public agency of New Jersey, organized and existing under the provisions of R. 8. 54:5-1, et seq.; N. J. S. A. 54:5-1, et seq. Appeals to the Passaic County Board of Taxation seeking the same relief were dismissed.

A procedural question raised by respondent must be first disposed of. It is contended on its behalf that the county board acquired no jurisdiction in the matter, and that therefore there could be no appeal to this board, for the reason that copies of the petitions of appeal to the county board were not served upon the respondent in advance of filing. The proofs on the issue of service are in sharp conflict. If it were material, we should find that service was made. We are clear, however, that the pertinent statute, R. 8. 54:3-21; N. J. S. A. 54:3-21, requires no such service where a taxing district is not the party respondent. It is enough, we believe, that respondent had sufficient notice of the hearing before the county board to enable it to appear and be heard. This it did, resulting in as favorable a determination as could have occurred under any circumsatnces of service, i. e., a dismissal of the appeals. We are vested with full jurisdiction in the premises, and proceed to determine these appeals on the merits.

The gravamen of the complaints before us is that the assessed valuation of the property in question does not reflect the fact that this land has been enhanced in value by reason of work done upon it to fit it for use as the impounding base of a successful waterworks, and that the assessment has been erroneously made upon the supposition that this land., in the hands of a public agency using it for the maintenance of a public water supply, is lawfully assessable as though it were .not in such use, but ordinary acreage owned by private persons. Respondent contends that under the statute authorizing the assessment of lands owned by public agencies, used for the purpose and the protection of a public water supply, no part of the expense converting the virgin land to fitness for reservoir uses is lawfully attributable to the assessed value of the land, whatever the law may be as to the situation when such property is so used and maintained by a private water supply company. This fundamental issue must be resolved before we can consider the details of the proofs respecting valuation. Respondent relies upon the provisions of B. S. 54:4-3.3; N. J. S. A. 54:4-3.3, which is to the following effect :

«* * * the iari¿s 0f counties, municipalities, and other municipal and public agencies of this state used for the purpose and for the protection of a public water supply, shall be subject to taxation by the respective taxing districts where situated, at the true value thereof,- without regard to any buildings or other improvements thereon, in the same manner and to the same extent as the lands of private persons, but all other property so used shall be exempt from taxation.”

We think the dispositive reference in this section is to the “taxation * * * at the true value thereof * * *.” The legislature has unmistakably commanded that the land should be assessed at its true value, and that any buildings or improvements thereon should be exempt. “Improvements” obviously here means, as generally (B. 8. 54:4-26; N. J. S. A. 54:4-26), tangible structures of any kind. There is no reasonable basis for respondent’s assumption that “improvements,” as here used, is also designed to include (and therefore to exclude from consideration in any land assessment), the cost or expense of an amelioration of the land itself, not reflected in a tangible structure. If that were the legislative intent, it could have been easily expressed in apt words, as it was in B. 8. 54:4-2.1; N. J. S. A. 54:4-2.1, where it is provided that certain state-owned lands should be “assessed at the same value at which they were assessed at the time they were acquired by the state.” Furthermore, if the true value of land can be increased by labor performed upon it, calculated to promote its adaptability to an ameliorative use, as the decisions hereinafter cited demonstrate, a statute providing that land owned by certain agencies should be assessed without regard to such enhancement of value, would be unconstitutional. While the legislature may provide for exemptions from taxation under proper classifications, it is clear that' once property is designated for taxation, it must be taxed in accordance with its true value. Constitution, article IY, section 7, paragraph 12. Fidelity Trust Co. v. Vogt (Supreme Court, 1901), 66 N. J. L. 86; 48 Atl. Rep. 580. The constitutional requirements with respect to the assessment of property for taxation are as applicable in the case of publicly owned, as in that of privately held property. Essex County Park Commission v. West Orange (Court of Errors and Appeals, 1909), 77 N. J. L. 575; 73 Atl. Rep. 511; State v. Mercer County Board of Taxation (Supreme Court, 1937), 118 N. J. L. 408; 193 Atl. Rep. 555. We therefore conclude that the legislative direction in B. S. 54:4-3.3; N. J. S. A. 54:4-3.3, that lands of public agencies used for the purpose and protection of a public water supply should be taxed at their true value, must be taken literally, and land actually so held and used must be valued with regard to such use, including any enhancement thereof which would increase its value if held by a private water company. Any work, cost, or expense flowing into tangible structures, is of course exempt in the hands of the public agencjq although taxable if privately held.

We proceed to address ourselves to the proofs made at the hearing. Petitioners’ experts were three water project engineers who, after study of figures reflecting the book cost or value of certain expenses attendant upon the construction of the reservoir, arrived at conclusions for the value of the land in the Borough of Wanaque, ranging from $760 to $1,000 per acre.

In order to appraise this testimony, it should be noted that the reservoir as a whole embraces approximately 5,900 acres, of which 1,629 acres are within the Borough of Wanaque, and the remainder in the Borough of Ringwood. Of the entire area, 2,310 acres are under water, the remaining 3,600 acres forming a protective belt, needed to preserve the water from pollution. Although no figures are furnished us as to the proportion of flooded to total area in the Borough of Wanaque alone, it would appear from maps introduced in evidence that that proportion is somewhat higher than in the ratio of the reservoir as an entirety. The proofs, moreover, are to the effect that the land is lower in Wanaque than in Ringwood, creating greater impounding capacity there. The land in the protective belt is hilly and of less value in its virgin state than that in the flooded area, where many dwellings and other structures stood prior to the construction of the reservoir. We refer to these factors of difference in the land in the two municipalities, because the courts have regarded it as essential to value separately for assessment, the land in each of several taxing districts, which together forms a water reservoir. Any value for the entire reservoir, as for rate-making purposes, not broken down to reflect enhancement of land value in the particular taxing district involved, is immaterial. Borough of Woodcliff Lake v. State Board of Tax Appeals (Supreme Court, 1936), 14 N. J. Mis. R. 132; 182 Atl. Rep. 866; affirmed (Court of Errors and Appeals, 1936), 117 N. J. L. 114; 187 Atl. Rep. 35; Borough of Haworth v. State Board of Tax Appeals (Supreme Court, 1941), 127 N. J. L. 67; 21 Atl. Rep. (2d) 309.

Petitioners’ witnesses, Williams and Potts, made their appraisal by simply adding together the book figures for every capital outlay made in the execution of the reservoir project, excepting the cost of erection of the dams and headworks, which they concede to be exempt as improvements, and then dividing the total by the proportion of the acreage in Wanaque to the total acreage of the reservoir. A consideration of the type of items included, and of the failure to allow depreciation or value of water rights, convinces us that these experts have gone about their work in precisely the same manner that they would if valuing this project, except the structures, for rate purposes: The first item included is $3,667,498.64, representing original acquisition costs, mostly by condemnation, of lands and structures, and valuable water diversion rights. The structures paid for by respondent were of a value of between $500,000 and $750,000. The water rights cost $419,500. To what extent the condemnation prices awarded exceeded the true value of the land, we do not know, but the testimony before us is to the effect that they were excessive, generally. In any event, such awards, or even sales prices of parcels acquired by voluntary purchase, would not be material upon the question of true value as of October 1st, 1939, having taken place during the boom period of the 1920’s, when this land was being assembled. Neither the water rights nor the cost of the buildings for which respondent had to pay when condemning the property, are in our opinion properly attributable to the value of the land. They are purely enterprise costs. The entire item of $3,667,498.64 is therefore of no present materiality.

The next major item relied upon by petitioners is denominated, “work required to make the land fitted for the impounding of water,” in the sum of $2,726,303.40. Included therein are the sub-items, $1,181,969.08 for relocation of Brie Railroad road bed and tracks, and $405,797188 for relocation- of highways. The railroad item is almost entirely improper because, if for no other reason, 95-98% of the railroad lay outside the Borough of Wanaque. Most of the relocated highway was likewise situated in Ringwood, not Wanaque. In any event, however, the moneys in question represent substantially the cost of building new embankments and tracks for the railroad,- and a new road bed for the highway. The new constructions are to a great extent comparable in nature with the dams, and are to be regarded as improvements, in the sense of structures, exempt from taxation under the act. See Hackensack Water Co. v. Woodcliff Lake, New Jersey Tax Reports, 1934-1939, p. 144. Part of the payment to the Erie Eailroad Company represents a capitalization of the added expense of operation of trains over curves and increased grades. This is obviously not attributable to land value. All of the figures stated are original costs, undepreciated. There was no proof as to what the costs would have' been on the assessing date.

The next item under the heading of “work required to make the land fitted for the impounding of water,” is “clearing and grubbing,” aggregating $587,072.74. This consists of the clearing of trees and brush and other direct treatment and transformation of the land itself, necessary to permit its use as a satisfactory bed for the water in the reservoir. Work of this character unquestionably enhances the value of the land for reservoir purposes. As stated by the Supreme Court in Borough of Emerson v. State Board (Supreme Court, 1928), 6 N. J. Mis. R. 326; 141 Atl. Rep. 23, 24:

“We are in accord with the view of the state board that, if the work done by the company on the land for the purpose which the land was to be used tended to enhance its value, this circumstance should have been considered in fixing its value * * *.”

It was held in tire case cited that the cost referred to could not be there used as the basis for an assessment upon improvements, the land assessment not being -in question. In the present case it is undisputed that the Wanaque reservoir is a prosperous and economically justified project, serving an important public need. Clearing and grubbing the land was an essential operation on the land for the proper development of the reservoir, and must be deemed to enhance the value of the land. We have therefore taken a proper proportion of this item allocated to the land in the Borough of Wanaque, into consideration in our determination of the true value of the property under appeal, after making due allowance for the differences in labor costs between the 1920’s and October 1st, 1939, the assessing date. See, also, People, ex rel. Lehigh Valley Railway Co. v. Burke, 247 N. Y. 227; 160 N. E. Rep. 19, 22; Mayor and Aldermen of Jersey City v. New York Bay Railroad Co. (C. C. A. 3d, 1926), 13 Fed. Rep. (2d) 982, 984.

The remaining two sub-items relied upon by petitioners are $17,685.44 for removal of cemeteries, and $43,066 for relocation of an oil pipe line situated under the bed of the reservoir. We think the first of these enhanced the value of the land for cemetery purposes, to the extent that it involved operations on the land itself but not as to removal of artificial constructions thereon. The second item did not enhance the value of the land, but was merely an additional necessary enterprise expense, not attributable to land value.

Petitioners sought to add to the accumulation of all of the figures enumerated above an item of engineering and administration, of 21.95% of gross, or $490,712.26. This will of course be disregarded in accordance with the elimination of the items upon which it was computed, and to the extent thereof.

The counter-proof adduced by the taxing district consists almost exclusively of testimony as to the value of virgin lands in the neighborhood of that under appeal, designed to prove what the true value of the locus in quo would be, were there no reservoir on the premises. The values thus brought out were approximately $75 per acre. Such testimony, as an end in itself, is irrelevant, since it does not value the land in the condition in which it is actually held and used by its owner. Stevens Institute v. State Board (Supreme Court, 1928), 105 N. J. L. 99; 143 Atl. Rep. 356; affirmed, Ibid. 655; 146 Atl. Rep. 919; Hackensack Water Co. v. State Board of Tax Appeals (Supreme Court, 1939), 122 N. J. L. 596; 7 Atl. Rep. (2d) 628. We do conceive, however, that such evidence is a proper, and even indispensable factor to be considered by the board, in the formulation of an intelligent appraisal of the true value of the land in question, used and improved for use for a going, water reservoir enterprise, as of the assessing date. This is made particularly necessary by the absence of any sales of property reasonably comparable with that under appeal. It is conceded by all of the experts that this property is unique in its possession of an excellent watershed, uniform rainfall, and proximity to the municipalities served thereby.

If a marketable value could be established, based upon sales of land used for a comparable project, within a reasonable period either prior or subsequent to the assessing date, such evidence would -be entitled to greater probative weight than anything herein adduced. In its absence, we must arrive at our conclusions in the light of the entire case, giving the material cost figures hereinabove referred to such weight as is prudent in view of the peculiar fact situation presented. While we appreciate that the property in question has been for many years assessed at $100 per acre, and that the value of the lands has not materially changed in the interim, we are satisfied that the assessment has not heretofore, as it should have, been made with regard to the actual use of the lands by the owner thereof. We find the true value of the lands under.appeal to be^ the sum of $244,350, or $150 per acre.

The assessment will be ordered increased to that extent.