text:
    State Board of Tax Appeals.
    BENJAMIN DIORIO, PETITIONER, v. ATLANTIC CITY SEWERAGE COMPANY, RESPONDENT.
    Decided March 10, 1942.
    For the petitioner, Samuel Morris.

    For the respondent, John Lloyd.

    For the City of Atlantic City, Daniel J. Dowling.

   Quinn, President.

Petitioner has filed his petition with this board, reciting that he is a taxpayer of the City of Atlantic City; that the respondent was assessed for the year 1940, upon divers parcels of realty in that city in the sum of laud, $36,150, and buildings, $39,650; that it was subject to a personalty assessment for that year in the sum of $975,000; that it filed an application in 1940 with the Public Utility commission seeking an increase in its sewerage rates, and reciting in its petition thereunder that “the appraised valúation of petitioner’s property upon a reproduction cost basis is approximately $3,000,000,” and that the book cost value thereof, as of December 31st, 1939, was the sum of $2,792,751; .that the petitioner (Diorio) was aggrieved and discriminated against by the said assessed valuations of respondent’s property for the year 1940; and praying that this board should determine the true, values of the properties of the respondent. An application for the same relief was dismissed by the Atlantic County Board of Taxation.

The statutory jiirisdiction for the entertainment of applications of this character is founded upon B. S. 54:3-21; N. J. S. A. 54:3-21. See Post v. Warren Point Volunteer Firemens (State Board, 1941), 19 N. J. Mis. R. 367; 19 Atl. Rep. (2d) 636. The right of the petitioner in this regard is not affected by the fact that he pays taxes only upon real property. If either the real property or personalty assessments levied against respondent were for less than the true value of the property, petitioner has been discriminated against, and is entitled to the statutory remedy. We find, however, that petitioner has not established such facts.

Petitioner has adduced no expert testimony with respect to the true values of either respondent’s real estate or its personal property. The extent of his proof of valuations was the tender in evidence of the record taken in the proceedings aforementioned before the Public Utility Commission, containing the testimony of valuation experts offered by respondent as petitioner in those proceedings, to the effect that the value of all of the property of the company, for rate-making purposes, is the sum of $3,0.00,000. We reserved decision at the hearing as to the admissibility of the record. Our conclusion is that it was incompetent as evidence in this proceeding. The record was not that of a prior hearing or trial' in this cause; the witnesses are not dead or otherwise physically unavailable; and the issue of true value for tax purposes, herein involved, is not that of reproduction value for rate purposes, which was the issue in the prior proceeding. See 20 Am. Jur. 582 et seq.; Sokobin v. Ornstein (Court of Errors and Appeals, 1932), 108 N. J. L. 304; 158 Atl. Rep. 468; McArdle Real Estate Co. v. McGowan (Supreme Court, 1934), 12 N. J. Mis. R. 500; 172 Atl. Rep. 786; Lupino v. Sestanovich (Court of Errors and Appeals, 1935), 15 N. J. L. 217; 178 Atl. Rep. 769; Ross v. Nevin Bus Lines (Supreme Court, 1931), 9 N. J. Mis. R. 412; 154 Atl. Rep. 198. The offer was further improper as an indirect method of compelling the testimony of expert witnesses, in invitum. Cf. Stanton v. Rushmore (Court of Errors and Appeals, 1933), 112 N. J. L. 115; 169 Atl. Rep. 721.

Were the experts properly adduced as witnesses in this proceeding, it cannot be presumed that their testimony of selling value (tax value) would be the same as the valuations ofEered in the rate case. Our courts have realized that, as a practical matter, a witness or a court dealing with a rate valuation is entertaining a concept entirely different from that of the tax valuation of the same property. Central Railroad Co. v. Thayer Martin (Supreme Court, 1934), 114 N. J. L. 69, 76; 175 Atl. Rep. 637; Hackensack Water Co. v. State Board (Supreme Court, 1939), 122 N. J. L. 596; 7 Atl. Rep. (2d) 628. This is no anomaly. Reproduction cost is of great importance in the former connection, but may be of little substance in the latter.

Tor the reasons stated, the petition will be dismissed, and the assessments in question affirmed.


source: Caselaw Access Project

author: Quinn, President.

license: Public Domain

text:
    State Board of Tax Appeals.
    THE TRADESMENS BANK AND TRUST COMPANY, PETITIONER, v. CUMBERLAND COUNTY BOARD OF TAXATION AND BOROUGH OF VINELAND, RESPONDENTS.
    Decided March 17, 1942.

      For the petitioner, Charles F. Richman.

    For the County of Cumberland, Roscoe Ward.

    For the Borough of Vineland, Philip L. Lipman.

    Of counsel with respondents, Lawrence N. Parle.

   Quinn, President.

As of the assessing dates for the years 1938 and 1939, petitioner was engaged in the business of a banking corporation under the laws of this state, having its principal place of business in the Borough of Vineland, Cumberland County. Its shares of capital stock were thus assessable at their true value, against the shareholders, at the uniform rate of three-quarters of one per cent, upon' such value, under R. S. 54:9-1 et seq.; N. J. S. A. 54:9-1 et seq. Section 54:9-4 provided, so far as is here material, that the value of each share of common bank stock of each bank shall be determined by adding the amount of its capital, surplus and undivided profits, and deducting therefrom the assessed value of its real property * * * and by dividing the result by the number of its shares of common stock outstanding. It is further specifically provided therein that “no deduction or exemption shall be allowed or made from the value determined as provided in this section.”

The petition of appeal for the year 1938, filed herein, recites that petitioner filed a report with the Cumberland County Board of Taxation for the purpose of determining the 1938 assessment against its shares of capital stock, as required by the statute, in which it was stated that its capital, surplus and undivided profits for said year were in the sum of $504,041.33, being the excess of its assets over and above its liabilities; that the assessment for the year 1938 had been made upon the basis of said report, at which the petitioner is aggrieved, because there were included in the assets bonds of the United States of America, the Home Owners Loan Corporation, the Federal Farm Mortgage Corporation, and the Federal Land Bank, aggregating $353,850.01, which said bonds are recited to be exempt from taxation by any state or local political subdivision, and to have been specifically exempted from taxation in New Jersey by 11. 8. 54:9-2 and 54:4-3; N. J. S. A. 54:9-2 and 54:4-3. Petitioner therefore prays that the assessment upon its shares for the year 1938 be reduced by a sum equal to the true value of the bonds thus referred to, “to avoid the levying of an illegal assessment contrary to the purpose of the tax laws of this state and the Constitution and Laws of the United States of America.”

A petition of appeal praying for relief of the same general nature was also filed by the bank with respect to the assessment made upon the stock for the year 1939.

The position contended for by petitioner is that the bank stock tax is a substitute for a personal property tax upon the assets of the corporation, and that an inclusion in the computation of such assets, for tax assessment purposes, of the obligations of the United States of America or its instrumentalities, coneededly exempt from direct taxation by or under the authority of a state, would result in an indirect accomplishment of what is beyond the constitutional power of the state to do directly. Keliance is had upon Newark City Bank v. Assessor (Supreme Court, 1862), 30 N. J. L. 13, and State, Fox and Edge, Pros., v. Haight (Supreme Court, 1866), 31 N. J. L. 399, in support of the contention thus urged. It is sufficient to say of these references that the theoretical basis of the decisions cited has since given way to the conclusive effect of a contrary result arrived at by the highest state and federal authorities dealing with this type of situation. The problem before us is two-fold. Was it the intention of the state legislature to allow a deduction on account of exempt securities, in the computation of the taxable value of bank shares? If it was, is that result repugnant to the Federal Constitution ?

1. The history of "bank stock legislation in New Jersey conclusively demonstrates that this species of property is to be valued for taxation without any deduction for exempt securities. Under the early General Tax Acts providing for the assessment of property for taxation at true value (see Pamph. L. 1866, p. 1078), shares of stock of national and state banks were assessable under legislative language not containing any specific directions with reference to the deductibility of exempt securities from the total assets of the bank, for purposes of assessment of the shares. The basis for the legislation consisted of the permission granted by Congress for the taxation of shares of national banks, limiting the taxation of the property of such institutions to their real estate, and providing that the shares should not be assessed at a greater rate than other moneyed capital in the hands of individuals. In Mechanics National Bank v. Baker (Supreme Court, 1900), 65 N. J. L. 113; 46 Atl. Rep. 586; affirmed (Court of Errors and Appeals, 1901), 65 N. J. L. 549; 48 Atl. Rep. 582, it was held that the act of 1866 and later legislation providing for the taxation of bank shares, did not constitute a tax upon the property of the banking corporation, but upon the distinctly different property of the shareholders. Pamph. L. 1869, p. 1149; Pamph. L. 1899, p. 431.-The court adverted to the decision of the United States Supreme Court in VanAllen v. Assessors, 3 Wall. 573, holding that the permissive act of Congress did not require United States securities held by a national bank to be deducted from its assets, in determining the value of its shares for taxation, although such securities were not directly taxable by the states as property, and it then concluded that (page 121) :

“* * * It is reasonable to presume that the legislature, in providing for the taxation of national bank shares, intended to exert the full power permitted by Congress, and therefore did not intend such a deduction to be made.”

Under Pamph. L. 1905, p. 457, however, the legislature reverted to the policy of allowing deductions, specifically providing that:

“In assessing the shares of stock of banks or banking associations organized under the laws of this state or of the United States, the assessor shall allow all the deductions and exemptions granted by law from the value of other taxable property owned by individuals in this state * * *. In making such assessment, the assessed valuation of the real property of such bank or banking association shall be deducted from the total valuation of the shares of stock assessed against the stockholders.”

The courts carried out the legislative mandate. Lippincott v. Lippincott (Court of Errors and Appeals, 1908), 75 N. J. L. 795; 69 Atl. Rep. 502. These provisions were literally enforced to the extent of allowing deductions of exempt securities even where the result was an elimination of any taxable balance against the shareholders. See Camden v. Camden Safe Deposit Co. (Supreme Court, 1913), 84 N. J. L. 37; 85 Atl. Rep. 1026.

In 1914 the legislature completely revised the bank stock tax provisions, fixing the uniform rate of three-quarters of one per cent, in the place of the former variant rates in the taxing districts where the taxpayers resided or the bank was situated, and specifically providing that no deduction or exemption should be allowed or made from the value determined as prescribed by the act, such provisions being substantially the same as were written into the Revised Statutes of 1937. Pamph. L. 1914, eh. 90. This act was sustained as constitutional in Commercial Trust Co. v. Hudson County Board of Taxation (Supreme Court, 1914), 86 N. J. L. 424; 92 Atl. Rep. 263; affirmed (Court of Errors and Appeals, 1914), 87 N. J. L. 179; 92 Atl. Rep. 799. In the present connection, it is interesting to note that it was contended by the opponents of the act in that case that the act discriminated against the holders of shares in national banks in forbidding the deduction of exempt securities, as private bankers were allowed such exemptions under the General Tax Act. The court observed that the contention was not sound, since it was not clear that the value of the exempt securities entered into the determination of the true value of the shares of the bank. See the case (at p. 435). Whether or not the premise is regarded as sound, it is at least clear that the court did not entertain any doubt that it was the legislative intention that no such deductions should be permitted. It thus appears beyond question that our statutes contemplate the inclusion of all securities, exempt or otherwise, in the valuation of the assets of the bank for the purpose of assessment of the shares. We must, of course, effectuate that intention, if it is permissible under the cases construing the Federal Constitution.

2. It is now thoroughly settled that, while the states may not levy a tax in any form upon United States securities, they may tax the shares of stock of banks and of other corporations whose assets consist, in part or in whole, of such securities, and that, in valuing the shares for the purpose of taxation, it is not necessary to deduct the value of the exempt securities held by the bank whose shares are taxed. VanAllen v. Assessors, supra; Home Savings Bank v. City of Des Moines, 205 U. S. 503; Des Moines National Bank v. Fairweather, 263 Id. 103; Schuylkill Trust Co. v. Pennsylvania, 296 Id. 113, discussed in 84 U. of Pa. Law R. (1938), 758; Tradesmen’s National Bank of Oklahoma v. Oklahoma Tax Commission, 309 U. S. 560, 564.

For the reasons stated, the position of the petitioner is without substance and the assessments appealed from will be affirmed.

Similar appeals filed by Marine National Bank of Wild-wood, Farmer’s and Mechanics National Bank, The First National Bank and Trust Company, of Woodbury, New Jersey, Woodbury Trust Company, The Penn’s Grove National Bank and Trust Company, The City National Bank and Trust Company of Salem, and The First National Bank and Trust Company of Beverly, will be dismissed, being based upon essentially the same grounds. No distinction is to be made as to those deductions claimed with respect to securities of local political subdivisions, exempt from- direct taxation. The clear purpose of the bank stock statute is to disallow any exémptions whatsoever.

Judgments in all cases accordingly.


text:
    State Board of Tax Appeals.
    MORRISTOWN FIREMEN’S RELIEF ASSOCIATION, PETITIONER, v. TOWN OF MORRISTOWN, RESPONDENT.
    Decided March 17, 1942.
    Tor the petitioner, King & Vogt (by Robert H. Schench).

    Tor the respondent, Nathaniel G. Toms.

    For Trenton Paid Firemen’s Relief Association, amicus curia, John Oswald.

   Quinn, President.

Petitioner is the owner of three parcels of real property situated in the respondent taxing district, duly assessed for taxation for the year 1940. They comprise dwellings which were rented by petitioner to tenants, as of the assessing date, and produced an income devoted by petitioner to its proper corporate purposes. The question raised by the present appeal is as to whether or not this property was exempt from taxation by the township, under R. 8. 54:4-3.10; N. J. S. A. 54:4-3.10, which provides as follows:

“The real and personal property of any exempt firemen’s association, firemen’s relief association and volunteer fire company incorporated under the laws of this state and which is used exclusively for the purpose of the corporation shall be exempt from taxation under this chapter.”

Applications for exemption of the property were denied by the Morris County Board of Taxation.

It is undisputed that petitioner acquired these properties through foreclosure of mortgage loans granted by it out of funds allotted to it from the proceeds of the taxation of foreign insurance companies, under R. S. 43:17-1 et ■seq N. J. S. A. 43 .T7-1 et seq. It is equally obvious that the real property in question is used as dwellings by the tenants living therein, and not by petitioner in any sense other than that of its use of the rental proceeds thereof. In precisely such a situation we have heretofore held that the property could not be said to be exclusively used for the purposes of the association. Borough of Neptune City v. Freehold Firemen’s Belief Association, New Jersey Tax Reports, 1934-1939, p. 733 (State Board, 1939). We there referred to Long Branch Firemen’s Relief Association v. Johnson (Supreme Court, 1898), 62 N. J. L. 625; 43 Atl. Rep. 573, where it was held that a mortgage held by such an association was property properly subject to exemption under a statute similar to R. S. 54:4-3.10; N. J. S. A. 54:4-3.10, but we indicated that the case before us was controlled by Young Men’s and Young Women’s Hebrew Association v. City of Newark (Supreme Court, 1938), affirmed (Court of Errors and Appeals, 1938), 121 N. J. L. 65; 1 Atl. Rep. (2d) 367, wherein it was held that a requirement of exclusive user in an exemption statute must be strictly complied with by an exemption claimant, and we accordingly denied the claimed right of exemption. We see no reason to alter the view that we expressed m the tleptune City case. We are unable to comprehend how it can be concluded that an exemption of property exclusively used for the purposes of an association applies to property rented by such association to private dwellers.

We are asked to reconsider our former ruling upon the ground that we failed to take cognizance of the fact that under the laws governing the powers of such organizations, they are granted the right of investment in real estate purchased at foreclosure sales of their own mortgages. The assumption apparently is that we are required to conclude that the scope of the exemption granted by R. S. 54:4-3.10; N. J. S. A. 54:4-3.10 extends to foreclosed property or to any other property lawfully acquired or owned by the association, entirely apart from express conditions upon the right of exemption, incorporated in the exemption statute. A logical extension of the contention thus urged would lead ,to the conclusion that all of the commercial and rent producing real estate lawfully owned, for example, by some of the religious associations of this state, was exclusively devoted to the purposes of such organizations, within the applicable exemption statute, R. S. 54:4-3.6; N. J. S. A. 54:4-3.6, if only it were shown that all of the proceeds of the property were devoted to the proper uses of the association. An examination of all of the statutory sections dealing with the exemption of real and personal property used in the work and for the purposes of various types of organizations compels the conclusion that exemptions are intended to be granted only when the property is used, directly, and in the sense in which such property is peculiarly susceptible of use, for the particular exempted purpose, be it charitable, educational, religious, fraternal, or in the work of‘any of the other exempt type organizations. See R. S. and N. J. S. A. 54:4-3.5, 54:4-3.6, 54:4-3.7, 54:4-3.13, 54:4-3.15, 54:4-3.24,- 54:4-3.25 and 54:4-3.26.

Any construction of a statute, such as that here contended for by petitioner, which would make an exemption from taxation depend, not upon the peculiar use to which the property itself was put, or its inherent characteristics, but upon the status of its owner, and the use by the latter of the rental proceeds of the property, would, in our opinion, offend the constitutional limits of tax exemptions, under New Jersey Constitution, article 14, section 7, paragraph 12, set out in Tippett v. McGrath (Supreme Court, 1903), 70 N. J. L. 110; 56 Atl. Rep. 134; affirmed (Court of Errors and Appeals, 1904), 71 N. J. L. 338; 59 Atl. Rep. 1118. We should strain toward a construction of the act which will assure its constitutionality, and in any event, should resolve any doubt as to the right of exemption from taxation in any specific instance, against its existence.

The foregoing considerations require an affirmance of the assessments and of the judgments of the county board.

Judgments accordingly.


text:
    State Board of Tax Appeals.
    OVERNIGHT MOTOR TRANSPORTATION COMPANY, PETITIONER, v. WILLIAM D. KELLY, STATE TAX COMMISSIONER, RESPONDENT.
    Decided March 24, 1942.
    For the petitioner, William H. Geraghty.

    For the respondent, David T. Wilentz, Attorney-General (by Harry A. Walsh).

   Quinn, President.

Petitioner is licensed in this state as a transporter of alcoholic beverages. It has been assessed, and has paid under protest, taxes purportedly based upon taxable disposition by it of alcoholic beverages in this state. It appeals from these assessments upon the ground that the facts do not establish any tax liability due from it to the state. The facts, to the extent that they are known, are not in dispute, and the issue before us is a narrow one.

Upon three certain separate occasions since November 22d, 1939, petitioner transported shipments of liquor from Calvert Distillers in Maryland to consignees in this state, in the City of Newark. Upon each such occasion a lesser amount of liquor was delivered to and receipted by the consignee than was handed over to petitioner by the consignor in Maryland. It is conceded that petitioner reported to the Commissioner, in the monthly reports required to be filed under the Tax Act and regulations, deliveries in this state, including the total quantities received by it in Maryland. These reports were erroneous because made up from the original invoices of shipments rather than from the signed receipts of consignees. It is admitted by the state that this practice was not indulged with any fraudulent motive on the part of petitioner, but in good faith. No explanation is made or offered by either side as to what happened to the liquor received by petitioner in Maryland, but never delivered at Newark. No showing is made as to where, in the course of transit, the custody or possession by petitioner of the missing liquor terminated. In particular, it is not shown whether the diversion took place prior or subsequent to its entry into this state.

The only basis upon which we can be guided as to whether any tax liability could be predicated in this case is the language of R. S. 54:43-1 and 54:41-2; N. J. S. A. 54:43-1 and 54:41-2. The former imposes a tax upon “any sale or delivery within this state of alcoholic beverages intended ultimately for consumption.” (Italics supplied.) The latter defines “sale” as including any exchange, gift, loss, theft, or other disposition. If petitioner lost, or in any other manner disposed of the liquor in question within this state, it would be liable for the tax, unless its liability is negatived by the provisions of R. S. 54:43-2; N. J. S. A. 54:43-2, providing that no tax “shall be payable by the holder of a transportation license issued by the State Commissioner of Alcoholic Beverage control, provided, such licensee shall have complied with the rules and regulations of the State Tax Commissioner relating to said licensee.” If petitioner were shown to have technically effected a taxable disposition of alcoholic beverages in this state, the question would arise as to whether its innocent misstatements in the three monthly reports in question as to the quantities of beverages delivered, constituted such non-compliance with the rules and regulations of the Commissioner as would deprive it of the tax immunity otherwise specifically vouchsafed by section 54:43-2. But the necessity for any consideration of that question is, in our opinion, obviated by the failure of the assessing authority to show the existence of a prime requisite for taxability under the statute, to wit, dispositions of the liquor in question “within this state.” The liquor left Baltimore, but never arrived at the place of business of the consignee in Newark. It might have been lost or diverted before reaching New Jersey, or subsequently. Under the act it could be taxed only if such loss or diversion took place within this state. At any rate, no imposition was leviable against petitioner, as transporter, in the absence thereof. We cannot indulge any presumption, in the face of the concession by the state that the liquors never reached Newark (nor was the respondent justified in so doing), that the alcoholic beverages delivered to petitioner in Maryland were transported by it into New Jersey. The visitation of an excise tax assessment upon a person or corporation without the clear concurrence of every statutory condition or requisite therefor is grossly illegal. Any difficulties in enforcement of the law, envisaged .by respondent as ensuing from, this ruling, are matters for legislation. Nothing herein is designed to reflect upon the question as to whether the transactions in question were “sales” in this state, taxable to the consignor or consignee. The assessments in question were illegal and will be ordered set aside.

Judgment accordingly.


author: William A. Smith, S. C. C.

text:
    RICHARD L. GOTHEINER ET AL., PLAINTIFFS, v. WALTER A. LENIHAN, DEFENDANT.
    Decided March 4, 1942
    For the plaintiffs, Leslie L. Vanderbilt.

    For the defendant, McDermott, Enright & Carpenter {James P. Beggans, of counsel).
   William A. Smith, S. C. C.

This matter was submitted to the court on two motions, one by the plaintiffs and one by the defendant, and there are raised two general questions having to do with the application of the statute of limitations.

The action is brought to recover damages on account of an automobile accident which happened on September 17th, 1938, and of course that is the date on which the cause of action accrued. The suit was instituted on December 13th, 1940, more than two years after the accrual of the cause of action. The plaintiffs are residents of this state and the defendant is a non-resident. Service was obtained on the defendant through the Commissioner of Motor Vehicles in accordance with the statute, R. S. 39:7-2; N. J. S. A. 39:7-2.

Without specifically referring to the provisions of 'the answer and reply, let it suffice to say that both parties, the plaintiffs in their reply and the- defendants in their answer, have reserved the right under point of law to-move at or before the trial for the determination of the questions involved.

The questions involved are first whether or not the statute of limitations is a bar to this action, and second, if it is, whether the defense of fraud and covin pleaded in reply to the answer setting up the statute of limitations, as charged by the plaintiffs against the defendant, postponed or extended the operation of the statute.

On the question as to the plea of the statute of limitations as set up by the defendant, the plaintiff replies that the defendant was not a resident of the State of New Jersey when the cause of action accrued but was a resident of the State of Pennsylvania, at which place he was served with the summons and complaint by the Commissioner of Motor Vehicles of New Jersey, and that therefore the statute of limitations, R. S. 2:24-2; N. J. S. A. 2:24-2, requiring that all actions of this character shall be commenced within two years does not apply because, by R. S. 2:24-7; N. J. S. A. 2:24-7, if the person against whom the cause of action may exist is not a resident of this state when such cause of action accrued, the time or times during which such person is not resident within this state shall not be computed as part of the period of time, within which such actions are required to be commenced by the section hereinbefore mentioned, and permits the commencement of the action after the accrual thereof with the period limited, exclusive of such time or times of non-residency.

No rejoinder is filed by the defendant putting at issue the allegation of the non-residence of the defendant, so we majr assume that the defendant’s non-residence is admitted.

Applying the plain wording of the statute of limitations to this cause of action, it would appear that the statute of limitations had not tolled at the time the action was commenced as the defendant was a non-resident. It is urged, however, that by reason of the fact that service was obtained through the Commissioner of Motor Vehicles under the provisions of the Motor Vehicle Act, that the non-resident should be given the benefits of a resident with regard to the application of the statute.

The service, as has been stated in this action, was made on the defendant through the Commissioner of Motor Vehicles under the provisions of R. S. 39 :1-2; N. J. S. A. 39:7-2. This act, in effect, makes non-resident operators or owners authorize the Commissioner of Motor Vehicles to be their agent for the acceptance of service of process, and the act by its subsequent sections provides how service shall be handled. The act, R. S. 39:7-2; N. J. S. A. 39 :7-2, provides as to the effect of the service on the Commissioners as follows: “That any such process against him or them which is so served shall be of the same legal force and validity as if served upon him or them personally.” The service was made in this case as provided by this statute. The effect of this service as stated in the act, R. S. 39:7-2; N. J. S. A. 39:7-2, is that it is the same as if the summons and complaint were served on the defendant personally within this state. If service had been made in this case upon the non-resident in this state on the date the Motor Vehicle Commissioner was served, the statute of limitations would have tolled under the provisions of R. S. 2 :24-7; N. J. S. A. 2 :24-7, which has been heretofore referred to with regard to the limitation as to non-residents.

There has been no decision that I can find in this state which is dispositive of the question here raised, although in other states the question involved has been disposed of both in favor of the tolling of the statute and against the tolling of the statute. It has been urged on the one hand that the Motor Vehicle Act did not in its express terms make any exception to the tolling of the statute, and that the statute of limitations is not modified by reason of the provisions of the Motor Vehicle Act with regard to service.

On the other hand it has been held that the statute having made the defendant subject to service as if personally within the state from the time the cause of action arose, he should not be penalized by being deprived of the benefits of the statute of limitations.

I will not attempt in this decision to analyze the cases in the foreign states bearing on this question. So reference may be had to them, I think it will suffice to refer to the case of Nelson v. Richardson, 295 Ill. App. 504; 50 N. W. Rep. (2d) 17, which seems to be a very recent case passing on the question, and also to the case of Bode v. Flynn, 213 Wis. 509. The report of this case in 94 American Law Reports Annotated (at p. 480), lists a very complete collection of cases in the various jurisdictions of this country. The reporter in 94 American Law Reports 408 expresses the opinion that the majority of cases hold that the tolling of the statute does not apply to this character of case.

It is my view, however, that I should not attempt to read into either of these statutes something which the legislature has not put there. I would feel that I was in effect attempting judicial legislation. Any unfairness that this situation works against the non-resident defendant who is obliged to be subject to service, is a matter to be remedied by the legislature and not by the courts.

It must be borne in mind that the provision as to the tolling of the statute is primarily for the benefit of the residents of this state and it does not affect the cause of action, but only affects the right to prosecute the action in this state.

Both sides having reserved the right to have the court pass upon this question at or before the trial, rule 40 I think would apply; and it would also seem that as Supreme Court Commissioner I would have the right to determine this question under rule 94 with regard to the settlement of issues, and it therefore may be considered that the question raised is here determined and that the reply of the plaintiff that the defendant was not a resident within this state at the time the cause of action arose, is a bar to the defendant’s applying the statute of limitations.

With regard to the second question raised, the defendant has moved that the allegations of the plaintiff’s first separate reply to the first, second, third and fourth separate defenses, be stricken on the ground that this amended reply is sham, as appears by the records of the court, and the records of the Essex County Circuit Court in an action instituted by the plaintiffs against the defendant herein and one Edward Holland; and on the further ground that the allegations of said amended reply are insufficient in law by the records of this court and the record of the Essex County Circuit Court.

This first separate reply charges that the delay in bringing this action was due solely to the fraud and covin of the defendant, his agent or servant; that such fraud was not constructive but actual fraud produced by affirmative acts on the part of the defendant, his agents or servants in and among other things, by false pretenses and false promise of settlement of the issue; that plaintiff was induced to postpone the placing of the claim in the hands of an attorney and instituting suit right up to the end of the two-year period within which plaintiff might have instituted a cause of action; and further charges that the relationship between the plaintiffs and the defendant was one of trust and confidence in the acts of the defendant of acknowledging the claim, making promises as recently as the end of the two years, that the case would be adjusted and suit would not be necessary; and the plaintiff’s reliance upon said promises are all facts which prevent the bar of the statute of limitations from attaching herein.

The defendant produces the record which has been referred to in the action in the Essex County Circuit Court. It is an action covering the same cause of action as is here brought, and it appears by said record that the action was instituted on the 16th day of September, 1940, which is one day previous to the expiration of two years from the date of the accident involved, namely, September lfth, 1938.

The argument made by the ‘defendant is that the fraud, if it existed, was not relied upon by the plaintiffs, as they instituted their suit within the statutory period. In this I agree with them, and therefore it appears as a matter of record that the other action was instituted within the statutory period.

It may be questionable whether I at this time should make any order with regard to this separate reply to the defense of the statute of limitations. I think, however, under rule 40 and under rule 94, which gives the Circuit Court judges acting as Supreme Court Commissioners the right to make determinations regarding settlements at issue, that' I may determine that the institution of the suit in- the Esses Circuit Court within time by the plaintiffs against this defendant sufficiently establishes that the fraud set up in this separate defense is not a bar, even if established at the trial, to the plea of the statute of limitations.

I think on settling the order this may be incorporated therein as a determination of this issue.

The application to strike out the plaintiffs’ second separate reply to the first, second, third and fourth separate defenses will be denied. -


text:
    State Board of Tax Appeals.
    CONSISTORY OF THE CONGREGATION OF PARAMUS, PETITIONER, v. TOWNSHIP OF RIDGEWOOD, RESPONDENT.
    Decided March 24, 1942.
    For the petitioner, J. W. & E. A. DeYoe.

    For the respondent, Thomas L. Zimmerman.

   Quinn, President.

Petitioner, a religious institution, owns a tract of land, in the respondent taxing district, divided by State Highway Ho. 2. The highway runs north and south, and on its westerly side, petitioner’s property consists of a thirty-five acre tract, which for many years has been devoted to cemetery uses, being known as Valleau Cemetery. To the east of the highway, petitioner’s property is a seven acre tract which has never been used as a cemetery. Upon this tract is situated petitioner’s parsonage and a building occupied as a dwelling by the superintendent of the cemetery and also serving as an office for the keeping of its records. It is this latter building which is the subject of the present appeal, respondent having assessed it for taxation for the year 1940, and petitioner maintaining that it is exempt, within R. S. 54:4-3.9; N. J. S. A. 54:4-3.9, exempting from taxation “cemeteries and buildings for cemetery use erected thereon.” An appeal for exemption was dismissed by the Bergen County Board of Taxation.

It is immediately apparent that petitioner must establish two facts in order to bring the building in question within the purview of the act. The land whereon it is situated must be shown to constitute a cemetery. The building must clearly appear to constitute a- “building for cemetery use.” The respondent contends that neither fact is established. It urges that to the extent that it is permitted to be used as living quarters, in partial compensation to the superintendent for his services, it cannot be property regarded as a building for cemetery use, by mere reason of its also serving as a cemetery office. Cf. The Ewing Cemetery Association, Inc., v. Ewing Township (State Board, 1940), 18 N. J. Mis. R. 558; 15 Atl. Rep. (2d) 195; affirmed (Supreme Court, 1941), 126 N. J. L. 610; 20 Atl. Rep. (2d) 607. We need not determine this question, as it is clear that the exemption claimant has failed to establish the first above stated requisite, i. e., that the land east of the highway, whereon this building is situate, is a cemetery.

As noted, no burials have ever taken place upon this tract, nor does it appear that the parcel is in reasonable contemplation therefor, or needed to serve petitioner’s future interment needs. It is not shown that municipal consent for such use has ever been obtained or even applied for. • Taxes have -always been paid on the land. See City of Clifton v. East Ridgelawn Cemetery Association (State Board, 1939), New Jersey Tax Reports, 1934-1939, p. 725; Borough of Leonia v. Church of the Madonna (State Board, 1939), Id. 779. In view-of the foregoing, we are not impressed with the circumstance that petitioner had this parcel mapped for hypothetical cemetery plots in 1934. That plotting appears to have been motivated by questions of valuation attendant upon the cutting of the highway through the property, rather than by any bona fide intention to undertake the use of the property for cemetery purposes. The land is not a cemetery, under West Ridgelawn Cemetery v. Clifton (Court of Errors and Appeals, 1932), 109 N. J. L. 146; 160 Atl. Rep. 534, and cases cited therein. Therefore, the building does not qualify for exemption under the statute. Its use in connection with Valleau Cemetery is immaterial, since it is not erected thereon.

The assessment is affirmed.


text:
    State Board of Tax Appeals.
    TRUSTEES OF RUTGERS COLLEGE, PETITIONERS, v. TOWNSHIP OF PISCATAWAY, RESPONDENT.
    Decided March 31, 1942.
    For the petitioner, Fred W. DeYoe.
    For the respondent, Maurice M. Bernstein.

   Quinn, President.

In 1939 petitioners acquired a tract of land in the respondent taxing district, upon which was situated a large dwelling. This property was purchased for the purpose of providing the president of Eutgers University with a dwelling near the campus. The intention of petitioners in providing this building for the occupancy of the president is clearly manifest from the proofs which show the specific uses thereof made by the president, in addition to his occupancy thereof as a home for himself and his family. These proofs are detailed hereinafter.

The building in question was assessed for taxation for the year 1940 by the respondent taxing district in the sum of $24,000, and the land upon which same was situated was assessed at $2,400, or a total of $26,400. While the proofs do not make the matter entirely clear, the land assessment is intended to cover the curtilage of approximately eleven acres, upon which the building stands. The deed conveying the property to the petitioners included a parcel of meadowland of approximately twenty-five acres, which is separately assessed. Petitioners contend that the building, together with the curtilage to the extent of five acres, is exempt from taxation under R. S. 54:4-3.6; N. J. S. A. 54:4-3.6, upon the asserted ground that the structure is a building constituting part of Rutgers University, and that the land, to the extent of five acres, is necessary for the fair enjoyment of the building. The material portion of the statute provides as follows:

“The following property shall be exempt from taxation under this chapter: All buildings actually used for colleges, schools, academies, or seminaries; * * * land whereon any of the buildings hereinbefore mentioned are erected and which may be necessary for the fair enjoyment thereof, and which is devoted to the purposes above mentioned and to no other purposes and does not exceed five acres in. extent; * $ * »

The respondent taxing district takes the position that the building is simply the dwelling of Dr. Clothier, president of’ the university, and his family, and that any other use to which the building is put, relating to college or university activities, is merely incidental thereto. It is further contended that there is a clear distinction between a private dwelling for a college officer, on the one hand, and a building actually used for a college, on the other. Finally it is asserted that the land upon which the building is situated is not necessary for its fair enjoyment, and that the same should not, under any circumstances, be exempt from taxation.

It was clearly apparent from the testimony offered on behalf of the petitioners that the purpose of the university trustees in acquiring this property was to provide the president with a home which should not only suffice for his personal needs, but could serve the purpose of an administrative center from which the president could direct the university and its activities and at which he could hold meetings of the faculty, student groups, administrative officers and officially greet and entertain the official guests of the university. With these purposes in mind the building was remodeled immediately upon its acquisition, so as to enlarge the dining room and kitchen facilities thereof, and provide additional rooms in which the contemplated meetings could be held. This work would not have been necessary had it been intended to limit the use of the building strictly as a dwelling for Dr. Clothier and his family. The location of the property was deemed satisfactory by the trustees, being distant only one mile from the main university campus in New Brunswick, and immediately adjacent to what is called the “Biver Boad Campus,” where the college stadium, athletic fields and golf course are situated. The actual uses of the building include meetings of the board of trustees of the university, the executive committee of the board of trustees, the New Jersey State Board of Begents, afternoon and dinner meetings of the faculty and various faculty groups, student organizations and groups, conferences of administrative officers and of the deans of the several colleges, and the accommodation of official guests of the university, such as chapel speakers, lecturers, visiting lecturers and persons in attendance at such activities as the recent celebration of the 175th anniversary of the college. It was satisfactorily shown that there is hardly a single weekday of the entire year, exclusive of the month of August, during which the building is not used for one or another of the several types of college uses described hereinabove.

Despite the foregoing, respondent urges that the use of the word, “actually,” in the statutory provision granting exemption to “buildings actually used for colleges * * *,” in contrast with the previous language of this provision under the act of 1851, which provided for an exemption of “all colleges, academies, or seminaries of learning * * *,” indicates a legislative intention to limit the exemption thus granted, to such structures as are actually and exclusively used for purposes of instruction of students directly, and to exclude structures having only, as it is described, an incidental connection with the college, but primarily used for the private purposes of individuals associated with the institution. In State v. Ross (Supreme Court, 1854), 24 N. J. L. 497, the court was confronted with the question as to whether the statutory exemption granted under the act of 1851, quoted hereinbefore, included dwelling houses and grounds occupied by the president and vice-president of a college and by the professors and steward thereof. The court made the following observations (at p. 499) :

“What buildings and lands are included in that term? If it be limited to such buildings as are indispensable to a seminary' of learning, then dormitories and refectories must be excluded, for they are not essential * * *. If the term be not,confined to the mere lecture or recitation room, then it must be so construed, as intended to include everything necessary to the proper management of the institution, according to the plan and principles on which it was originally founded, or by authority subsequently granted.”

The court concluded that it was apparent that the trustees of the college deemed it both needful and convenient for the .uses of the college that they should purchase and build, not only the. dormitories and apartments for the students, recital rooms and refectories, but also dwelling houses for the president and the professors. The court further stated (at p. 500) :

“To enable the officers to exercise the proper discipline, it was necessary that they should dwell in the proximity of the students; and be provided with apartments either in the same buildings with them, or in dwelling houses adjacent.” And (at p. 501) :
“The providing of these dwelling houses was clearly within the scope of the authority given by the charter, and they are to be taken as a part of the college, and together with the lands whereon they are erected, must be considered to he within the exemption of act.”

The problem before us, thus, is as to whether the position taken by the court should be deemed inapplicable to-day because of the change in the statutory language now controlling, and further, if it should be deemed that the case is still an authority, whether the particular property before us, in the light of its uses and the circumstances of its acquisition by petitioners, is exempted from taxation under the criteria outlined in that case.

We have concluded that the alteration in the statutory-language is not material, so far as the facts and circumstances of this case are concerned. The language of the act of 1851, exempting, as hereinabove noted “all colleges, academies and seminaries of learning,” remained intact until 1903, when, in the enactment of the General Tax Act of 1903 (Pamph. L. 1903, oh. 208), it was provided, in section 3 (4), that there should be exempted, voter alia, “all buildings actually and exclusively used for colleges, schools, academies and seminaries * * *.” An examination of the entire act of 1903 indicates that the general wording of all of the provisions relating to exemption of any type of property was revised thereby. There is no indication that the legislature had any other object in changing the language of the provisions relating to colleges, &c., than to make it certain that no exemption should be granted to buildings owned by colleges, as well as to those owned by charitable, educational or religious organizations generally, which were not exclusively, devoted to the exempt-type purposes. We find no evidence of any intention that the concept of a “college” was to be narrowed, or that what was regarded in the Boss case as being within the proper scope of the purposes for which a college might properly acquire buildings and claim exemption for them, was intended to be superseded.

In any event, the significance which respondent maintains is inferable from the history of the act, is dissipated by the fact that the word “exclusively” was taken out of the statute, under an amendment thereof by Pamph. L. 1913, p. 570. From this amendment it would clearly appear that the legislature intended some degree of liberality in the construction of the statutory reference to buildings “actually (but not exclusively) used for colleges, &c.”

We therefore conclude that State v. Ross, supra, continues to be an authority to-day.

Passing to the question as to whether the degree of authority vested in the trustees of the college was sufficiently broad to warrant its making of the investment in question for educational purposes, we are of the opinion that a consideration of the charter of the college, and of the trend of the decisions throughout the country interpreting the question as to what types of buildings may be deemed to be used for educational purposes, is dispositive of the issue in the affirmative.

The charter of 1770, granted by George III, invested the trustees therein named with the right and privilege to establish a college called “Queen’s College” (changed to Rutgers, November 30th, 1825), and with the legal power and authority, “for the use of the said college, to have, get, acquire, purchase and receive and possess lands, tenements, hereditaments, jurisdictions and franchises, for themselves and their successors, in fee simple or otherwise, howsoever; and to purchase, receive, or build any house or houses, or any other buildings as they shall think needful and convenient for the use of the said Queen’s College; and in such place or places in this, our Colony of New-Jersey, as they the said trustees, or the major part of them, met as aforesaid, shall agree upon * * * »

It cannot be gainsaid that the petitioner trustees did deem it “needful and convenient for the use” of the college that the premises in question should be acquired and used, as in fact they are, for the best interests of the university. Dr. Clothier has no right, title or interest in and to this property, other than his occupation thereof at the pleasure of the trustees of the University who have title thereto. The objective in its acquisition was not the serving of his private convenience, as an end in itself, but the provision for him of such facilities as would tend to enable him to render a maximum degree of service and devotion to the interests of the university. When this is the primary and moving purpose in the maintenance of an official residence by a college or university, for its president or other executive officers, it is held with substantial unanimity, in other states, that the building in question is devoted to educational purposes, and is entitled to exemption from taxation, under statutes exempting buildings or property used for educational or college purposes. In re Syracuse University, 214 App. Div. 375; 212 N. Y. Supp. 253; Mary Immaculate School of Eagle Park v. Ossining, 185 App. Div. 5; 175 N. Y. Supp. 701; Wheaton College v. Norton, 232 Mass. 141; 122 N. E. Rep. 280; Lancaster Academy v. Town of Lancaster, 242 Mass. 553; 136 N. E. Rep. 626; In re Board of Commissioners of Saline County, 120 Kans. 496; 243 Pac. Rep. 1055; Kenyon College v. Schnebly, 31 Ohio Cir. Ct. R. 150; State v. Carleton, 154 Minn. 280; 191 N. W. Rep. 400; Harvard College v. Assessors, 175 Mass. 148; Phillips Academy v. Andover, 175 Mass. 118; City of Nashville v. Ward Belmont School, 7 Tenn. App. 610.

Where, however, a residence is furnished purely for the personal convenience of the official in question and there is no intention or purpose of serving the needs of the college or university in connection therewith, it is held that there is no right of exemption. Burris v. Tower Hill School Association, 6 W. W. Harr. 577; 179 Atl. Rep. 397 (recognizing the soundness of the rules discussed hereinabove); State v. Waggoner, 162 Tenn. 172; 35 S. W. Rep. (2d) 389, where it was likewise recognized that where the dominant purpose in acquiring a residence for a school official, is to promote the efficient administration of the institution rather than furnish a habitation for him, the residence will be considered as being used for educational purposes; it was there held, however, that the particular property in question did not come within the rule. Cf. Assessors v. Jacksonville Realty and Mortgage Co., 177 Fla. 403; 81 So. Rep. 524; Knox College v. Board of Review of Knox County, 308 Ill. 160; 139 N. E. Rep. 56.

For the foregoing reasons, we are of the opinion that the dwelling house here in question was entitled to exemption from taxation for the year 1940, and the assessment thereof will be ordered set aside. As to the land, we are satisfied that the fair use and enjoyment of a structure of this character requires the use of the statutory maximum of five acres of the eleven-acre curtilage upon which the structure is situate. If the parties can agree and stipulate as to the fair value of such a five-acre parcel, and if such valuation is less than the assessed valuation of the land here under appeal, an order will be made reducing the assessment to such sum. If the- parties cannot agree with reference thereto, the matter will be set down for hearing and determination by the board.

Judgment accordingly.


text:
    State Board of Tax Appeals.
    CARMEN G. CORRADO, PETITIONER, v. CITY OF HOBOKEN, RESPONDENT.
    Decided March 31, 1942.
    Por the petitioner, William A. Kaufmann.

    Por the respondent, John J. Fallon (by James A. Goolahan and Otmar J. Pellett.

   Quinn, President.

On October 1st, 1939, premises at 520 Adams Street in the City of Hoboken, consisting of land and improvements, were owned by that municipality. Subsequently, during the year 1940, the property was sold by the city to the petitioner herein. The tax list and duplicate of the City of Hoboken for the year 1940 entered this parcel as owned by the city, and it was marked “exempt” thereon. These entries were unchanged on the list and duplicate after certification in due course thereof, by the Hudson County Board of Taxation. After the sale to petitioner, the deputy collector of taxes of the city issued an official tax bill for the property to petitioner, purportedly for 1940 taxes, calculated from the date of the conveyance to petitioner, to the end of the calendar year. He also made a memorandum entry on the duplicate as follows: “Proportionate share of the tax in the amount of $537.04, based on the last previous assessment. The last previous assessment on the land was $2,100 and the building $10,000. Added tax.”

On August 14th, 1940, petitioner filed a petition of appeal with the Hudson County Board of Taxation, reciting that the property was assessed for 1940 taxes at land, $2,100, building $10,000, total $12,100, and praying for a reduction of the assessed valuation upon the ground that the property was assessed in excess of its true value. This appeal was dismissed by the county board.

The appeal to this board from the judgment of the county board prays for a cancellation of the assessment in toto, on the ground that the property was exempt from taxation for the year 1940, having been owned by the taxing district on the assessing day. The appeal is resisted by the city upon two grounds: (a) that the matter of exemption is not arguable before this board, since not raised on the appeal before the county board; (b) that there is no cognizable assessment of the property, for the year 1940, in existence, the property having been marked “exempt” on the tax list and duplicate, and that the board has no jurisdiction to entertain an appeal from an allegedly non-existent assessment. After careful consideration, we conclude that neither of these contentions has merit. Wo discuss them in the order stated.

(a) The first point is disposed of by the ruling of the board, opinion by the late president of the board, Mr. Weaver, in Public Service Railway Co. v. Township of Weehawken (1927), New Jersey Tax Reports, 1912-1934, p. 407, where it was held that the board had jurisdiction to set aside an assessment of utility property, exempted from taxation under Pamph. L. 1919, ch. 25, and this despite the fact that the taxpayer’s appeal to the county board had as here, sought only a reduction of the assessed valuation, not an exemption from taxation. Mr. Weaver held that the State Board had plenary jurisdiction, in reviewing the count}'' board judgment, over the assessment as an entirety, and could deal with any phase of that subject-matter, rendering such “judgment” in the premises as it might “think proper.” Pamph. L. 1906, eh. 120, ;§ 10, now B. S. 54:2-35; N. J. S. A. 54:2-35. We are not prepared to say that the former ruling of the board is not applicable in the present circumstances.

(b) The second contention made by respondent is merely colorable. It urges that there is no jurisdiction in this board to review the county board judgment, for the reason that there was no lawful assessment of the property in the first instance, and that therefore the petitioner cannot be said to have been “aggrieved by the assessed valuation of his property,” as is requisite for the maintenance of an appeal before the county board, under B. 8. 54:3-21; N. J. S. A. 54:3-21. The question before us resolves itself into an inquiry as to whether the legislature, in providing for a summary, inexpensive appeal to a tax appeal tribunal by a “taxpayer feeling aggrieved by the assessed valuation of his property,” intended to limit this remedy to instances where the statutory assessing methodology was punctiliously complied with by the assessors as to form, and to withhold it where tax enforcement agencies of a municipality attempt to collect an illegal tax without the due preliminary of an entry of the ratable on the tax list and a certification thereof as correct by the county tax board. B. 8. 54:4-35 to 54:4-47, inclusive; N. J. S. A. 54:4-35 to 54:4-47, inclusive. To state the issue is almost to answer it. As recently as in the case of Ridgewood Elks Holding Corp. v. Ridgewood (Court of Errors and Appeals, 1941), 127 N. J. L. 295; 22 Atl. Rep. (2d) 266, it was held that despite the fact that a municipal assessor entered a parcel of realty as exempt on the tax list, and that the duplicate containing such entry was certified as correct by the county board, the collector could nevertheless subsequently proceed to enter his own notation of an assessment on the duplicate without notice, issue a tax bill thereon, and sell the property for the unpaid assessment thus made. This practice was sanctioned because of a finding by the court that the property was, as a matter of fact and law, taxable for the said year, and that any irregularity or illegality in the making of the assessment must be disregarded, under R. 8. 54:4-58 and 54:4-59; N. J. S. A. 54:4-58 and 54:4-59. It is thus obvious that the conduct of tax officials may give rise to an “assessment,” in a practical sense, despite the most flagrant disregard of the statutory machinery for the making of original assessments or assessments for omitted property.

Our courts have observed that taxation is an intense realty, Universal Insurance Co. v. State Board of Tax Appeals (Supreme Court, 1937), 118 N. J. L. 538, 541; 193 Atl. Rep. 915; Herdman Motor Co. v. State Board of Tax Appeals (Supreme Court, 1937), 119 N. J. L. 164, 168; 194 Atl. Rep. 870. The concept of what constitutes a taxpayer, “aggrieved by the assessed valuation of his property,” should thus be dealt with realistically. A taxpayer who has received a tax bill from his taxing district faces a realty as intense as can be readily imagined. If the property is not taxable, he is as much aggrieved by such action on the part of municipal officials arbitrarily acting under color of authority, as though the assessment had been meticulously entered upon the tax duplicate prior to the issuance of the bill. His title is clouded. Collection proceedings may be imminent if he fails to pay. If he pays, though under protest, he is faced with the necessity for a costly law suit for recovery of the moneys should there be no remedy before the statutory tax tribunals for an adjudication as to the lawfulness of the levy. "We are convinced that acquiescence in respondent’s contention would result in an unfortunate aberration of the legislative intention in enacting tax appeal legislation. We therefore hold the right of appeal exists in the premises.

It remains to consider whether the property was in fact taxable for the year 1940. It is clear that it was not. Taxation of property in this state is based upon the status of the property as of the assessing date, not as of the tax year or any portion thereof. Jersey City v. Montville (Supreme Court, 1913), 84 N. J. L. 42; 85 Atl. Rep. 838. That date in this case, for the year 1940, was October 1st, 1939, when the property was owned by the city. That fact vested the status of the property as exempt for the entire year 1940. B. S. 54:4-3.3, 54:4-1; N. J. S. A. 54:4-3.3, 54:4-1. No taxes were lawfully leviable for the year 1940, upon this property, in the hands of any owner thereof. The assessment and all acts done by or under color of authority of. the City of Hoboken in furtherance thereof are herewith canceled and set aside as void.

The same disposition will be made in the appeals of Michael Dragovich, Mildred Ferrante, Madison Realty Co., of Hobo-ken, North Realty Co., Reuben Pinkowitz, Sam Pincus, John Rhode and Fannie Sgherzi, the facts being similar to those herein in all material respects.

Judgments accordingly.


author: Clapp, A. M.

text:
    Essex County Orphans Court.
    IN THE MATTER OF THE ESTATE OF THEODORE KOELLHOFFER, DECEASED.
    Decided April 16, 1942.
    For the petitioner et al., Harry Kay.

    For the several respondents, Howard F. Casselman, E. A. & W. A. Schilling and Harold Laifer.

   Clapp, A. M.

Seeking an order of distribution, Edward Turner, substituted trustee under the will of Theodore Koellhoffer, Sr., lays before the court for construction a clause of the will reading thus:

“Fourth: I give, devise and.bequeath unto my executors hereinafter named, the remaining three-sixths parts of my estate in trust, to collect the rents, issues and profits and pay the same over to my sons Theodore KoellhofEer and Charles Koellhoffer and to my daughter Mary Blank equally, share and share alike, during their lives, and upon the death of either or any or all of them, then I give, devise and bequeath the shares so given to them for life to their children and heirs at law to be vested in each such child when he or she shall arrive at the age of twenty-four years.”

Theodore, Sr., the testator, died in 1919 survived by six children, the three who take under the trust set up in the fourth clause, and three other sons, Anthony, Conrad and George, each of whom take under the third clause of the will a sixth part of his estate outright. All six children have now died save Mary Blank; and all the children of Theodore, Jr., and Charles living at the testator’s death or born thereafter have attained twenty-four.

Precisely, the court’s directions are sought respecting the corpus of the shares of which Theodore, Jr., and Charles each had had the income during his life, and respecting the income that has been accumulating thereon since his death.

Before turning to the several difficult issues presented, it may be noticed that the distribution of these two shares need not await the death of Mary Blank. For, notwithstanding that the gift of income is to Theodore, Jr., Charles and Mary “during their lives,” they, because of the words of severance—• to wit, the words “equally share and share alike”—are held to take the income but as tenants in common; and (stressing the language of the gift) “upon the death of * * * any * * * of them,” the distribution of the'share of corpus of which the one dying had had the income, may be made immediately. Stoutenburgh v. Moore, 37 N. J. Eq. 63; affirmed, 38 Id. 281; Pennsylvania Company, &c., v. Riley, 89 Id. 253, 254; 104 Atl. Rep. 225; Vreeland v. Van Ryper, 17 N. J. Eq. 133; Huff v. Ferguson, 110 Id. 86; 159 Atl. Rep. 152.

The principal question presented is whether the future interests to the children of Theodore, Jr., and Charles contravene the rule against perpetuities; and that question turns upon the interpretation to be put upon the word “vested”— whether it is to be construed as “vested in interest” or as “vested in possession.” Cf. Carroll v. Newark, 108 N. J. L. 323, 328; 158 Atl. Rep. 458.

Prima facie the word means “vested in interest.” Re Thatcher’s Trust, 26 Beav. 365; Blakemore’s Settlement, 20 Id. 214; Griffith v. Blunt, 4 Id. 248; Morse’s Settlement, 21 Id. 174; Comport v. Austen, 12 Sim. 218; Rowland v. Tawney, 26 Beav. 67; Land v. St. Louis Union Trust Co., 298 Mo. 148. However, a different significance has been put upon the word under circumstances and in limitations not here presented. Armytage v. Williams, 3 A. C. 355, 372; Polsky v. Continental National Bank, 110 Fed. Rep. (2d) 50; In re Landis, 46 Id. 524; In re Glann’s Estate, 177 Cal. 347; Burney v. Arnold, 134 Ga. 141; Busich v. Busich, 65 Ind. App. 655 (but see Macy v. Haneisen, 100 Id. 162); Jacobs v. Whitney, 205 Mass. 477; In re Phillip’s Estate, 205 Pa. 504; In re Stocker’s Estate, 260 Id. 385; 1 Theo. on Wills (7th ed.) 582; 2 Jarm. on Wills (6th Am. Ed.) *1623; 34 Hal. Law (2d ed.) 369. When there is nothing in the context to show that the word is to be taken otherwise than in its prima facie sense, then in the positive phrase of Jarmin “all discussion is of course precluded.” 1 Jarm. Id. *807.

The context into which the word fits here, is barren of assistance, unless the words “I give, devise and bequeath” introducing the future gift are of more import than a conveyancer’s flourish. Where future interests are given with verbs of present gift, such as those quoted, it has been said that the verbs convey a design to render the gift effective as of the time the will first speaks—that is, the time of the testator’s death. In re Collins’ Estate, 99 N. J. Eq. 333, 338; 133 Atl. Rep. 188; Cook v. McDowell, 52 N. J. Eq. 351; 30 Atl. Rep. 24; Miller v. Worrall, 59 N. J. Eq. 134; 44 Atl. Rep. 890; affirmed in this regard, 62 N. J. Eq. 775. The words may carry that design in the cases cited which were of gifts to persons nominatim and to testator’s children, where the takers of the gift are determinable at the testator’s death. But here it is sought to have them construed as rendering the gift effective not at the time the will first speaks (the testator’s grandchildren born after his death are certainly not to be excluded) but at the earliest' plausible time thereafter'— namely, when the life takers die. The verbs point no more readily to an early future than to a remote future. I need not measure the weight of these words in general; suffice it to say that they Avill not tip the constructional balance here.

It may be remarked that the interpretation here put upon the word “vested” will postpone the vesting of the future interests; and that the court leans rather toward the early vesting of gifts, particularly residuary gifts where there is no limitation over if circumstances prevent them from vesting. Kimble v. White, 50 N. J. Eq. 28; 24 Atl. Rep. 400; affirmed, 51 N. J. Eq. 638; 30 Atl. Rep. 430; Cf. Gifford v. Thorn, 9 N. J. Eq. 702, 707. But such a constructional tendency cannot be used to fasten one prima facie significance upon a word when it refers to a particular gift and another when it refers .to a residuary gift. Bor cases of residuary gifts where the interpretation of the word “vested” was that given here, see Re Thatcher’s Trust, supra; Griffith v. Blunt, supra; Glanville v. Glanville, 2 Mer. 38; Russell v. Buchanan, 7 Sim. 628; In re Coppard’s Estate, 35 Ch. D. 350; Land v. St. Louis Union Trust Co., supra.

Nor is the prima facie sense of the word “vested” to be broken down because the whole will is crudely drawn in a number of respects that need not be recounted. Bor there is no indication from the instrument or, for that fact, any other proof that the unskilled draftsman used the word in any other sense.

Nor again can the interpretation of the word be turned about because otherwise the testator’s dispositive scheme is torn up by the rule against perpetuities. Bor in this state it is established that the words of the will are to be construed as if the rule did not exist and then to the provisions so construed the rule is—-in the quaint words of Gray—“to be-remorselessly applied.” First Camden National Bank and Trust Co. v. Collins, 114 N. J. Eq. 59; 168 Atl. Rep. 275.

The gift in trust may then be regarded as of one to a parent for life with the principal passing upon his death to such of his children as reach twenty-four. A portion will vest in each child as he attains twenty-four. But since the full amount of his portion may not be ascertained for more than life in being plus twenty-one years after the testator’s death, the future interests to the children contravene the rule. McGill v. Trust Company of New Jersey, 94 N. J. Eq. 657; 121 Atl. Rep. 760; modified, 96 N. J. Eq. 331; 125 Atl. Rep. 308. In the face of that decision of the Court of Errors, it is not' for an advisory master of this court to examine into the interesting thesis of Professor W. Barton Leach, 51 Harvard Law Rev. 1329, leading to a contrary conclusion.

The fact that Mary Pfeiffer, a child of Charles, was twenty-four at the testator’s death will not save the limitation to Charles’ children. (Perhaps, too, there was a child of Theodore, Jr., then twenty-four.) Indeed the gift vested in interest as to Mary on the testator’s death. McGill v. Trust Company of New Jersey, supra (at p. 665). But the quantum of the gift was not then determinable. .Consider the matter supposititiously viewing it, as one must, from the testator’s death: Charles might have another child, A, born at his death and Mary might then die. If A should reach twenty-four, Mary’s personal representative will share the corpus with A. But if A dies before twenty-four, Mary’s personal representative will not have to share with A or his estate. The total amount of the corpus passing to Mary’s personal representative may not, upon the supposition, be determined for more than life in being plus twenty-one years after the testator’s death; and of course if there be valid supposition yielding such a conclusion, the limitation cannot stand under the rule. Pitzel v. Schneider, 216 Ill. 87; Kale’s Future Interest (2d. ed.), § 681; 51 Harvard Law Rev. 646, ¶ 18; 51 Id. 649, ¶ 24 and n. 28; 51 Id. 1329. Professor Edward H. Warren reached a contrary opinion in 30 Cyc. 1488 n. 13, upon the erroneous premise that the class will close at the i esta tor’s death if the life taker then had a child twenty-four years of age, thus excluding A in the case supposed. That the class will not close until the death of the life taker, see Farman v. Barrett (1927), 1 Ch. 466; In re Emmet’s Estate, 13 Ch. Div. 484; Simpson v. Spence, 58 N. Car. 208; Tentative Restatement of Property, § 296, comment (L), § 297, illustration No. 8; 51 Harvard Law Rev. 1334; 2 Simes Future Interests, § 383; Kale’s Future Interests, § 570. In Picken v. Mathews, 10 Ch. D. 264, cited by Professor Warren, there was no life estate prior to the gift to children.

I cannot pass unmentioned the rule that generally no limitation can be construed an executory devise if it might be construed a remainder and the companion rule as to the destructibility of contingent remainders. The result of these rules is, for instance, that in a limitation to one for life and on his death to such of his children as reach twenty-four, the limitation to the children must either vest eo instante the life estate determines, or fail. Such rules are not applicable where, as here, the gift is in trust. Gray’s Rule Against Perpetuities (3d ed.), § 325; Kale’s Future Interests, § 570; 1 Farm. (6th Am. Ed.) *225, *227; Simonds v. Simonds, 199 Mass. 552, 555; cf. McGill v. Trust Company of New Jersey, 94 N. J. Eq. 657, 666 (first quotation from Gray); cf. Kates v. Walker, 82 N. J. L. 157; 82 Atl. Rep. 301. Were such rules applicable they would render good under the rule against perpetuities the limitation to the children of Theodore, Jr., and Charles who had attained twenty-four at their fathers’ deaths; and any others of their children would be cut off. Purther as to these rules which sprang up under other economic conditions, see Den v. Schenck, 8 N. J. L. 29, 42; Den v. Hance, 11 Id. 244, 259; Restatement of Properly, § 240; Brackenbury v. Gibbons, 2 Ch. D. 417; 19 Am. Jur. 558.

I have next to decide the interpretation to be put upon the words “and heirs at law” appearing in the fourth clause of the will. The words stand in contrast to the gifts under the third clause to Anthony, Conrad and George Koellhoffer, each of a sixth of the estate “to have and to hold to them, their heirs and assigns forever.”

The only one who can, under the words “and heirs at law,” lay a claim meriting mention is the widow of Charles who survived him (the wife of Theodore, Jr., predeceased him). The theory of her claim must be that the word “and” is read conjunctively, the words “heirs at law” read as words of purchase and the pronoun “their” as modifying the words “heirs at law.” On her behalf it may be said that when used as words of purchase with reference to personalty, the words “heirs at law” may be taken to signify the next of kin and to include the widow, entitling her where there are children to the one-third share given a widow under the statute of distributions. Meeker v. Forbes, 84 N. J. Eq. 271; 93 Atl. Rep. 887; affirmed, 86 N. J. Eq. 255; 98 Atl. Rep. 1086. But when used as here in a gift to the “children and heirs at law,” the words “heirs at law” are quite inapt to refer solely to surviving spouses; and furthermore the quantum of the gift (whether a one-third share or a share equal to the share of each child—Hutton v. Hutton, 120 N. J. Eq. 21; 183 Atl. Rep. 714) is so undefined as rather to deny the intimation that the testator used the words to express a gift solely to surviving spouses.

Viewing the several conceivable possibilities, I think the most plausible interpretation that may be put upon the words referred to is to read the word “and” disjunctively and the other words as above defined. Thereby the limitation to the heirs at law becomes a substitutional gift to the next of kin of Theodore, Jr., Charles and Mary. In fact all the children of Theodore, Jr., and Charles living at the testator’s death or born thereafter, survived their father and attained twenty-four. The substitutional gift therefore will not take effect and need not be considered.

ISText it may be concluded summarily that the testator died intestate as to the income that has been accumulating since the death of Theodore, Jr., and Charles upon the shares of which each had had the income. That income will either (a) go by intestacy as undisposed of property, or (b) follow, and therefore fall with, the gifts of corpus invalidated by the rule against perpetuities. Allen v. Burkhiser, 125 N. J. Eq. 524, 527; 6 Atl. Rep. (2d) 656; cf. First National Bank of South River v. Johnson, 114 N. J. Eq. 616, 618; 169 Atl. Rep. 346; and as to the effect of the rule, see McGill v. Trust Company of New Jersey, supra, 94 N. J. Eq. 657, 669.

The final questions here have to do with the law of conversion. The testator left at his death a parcel of land at 37 Thirteenth Avenue, Newark, a parcel at 72-74 Springfield Avenue, Newark, and some personalty. The future interests purported to be created by the fourth clause of the will, in so far as they constitute personalty, will pass in six equal shares to the personal representatives of the testator’s five deceased sons and to Mary Blank.

Under the will the executors have power to sell “the whole * * * of my estate” including therefore the future interests going by intestacy. Morse v. Hackensack Savings Bank, 47 N. J. Eq. 279, 283; 20 Atl. Rep. 961. From the accounts as to this estate on file in this court, it appears that the parcel on Thirteenth Avenue was sold March 1st, 1920, prior to the death of any of the five sons. The proceeds therefrom pass as personalty to their personal representatives and to Mary Blank. Meeker v. Forbes, 84 N. J. Eq. 271; 93 Atl. Rep. 887; affirmed, 86 N. J. Eq. 255; 98 Atl. Rep. 1086; Keen v. Plume, 82 N. J. Eq. 526; 90 Atl. Rep. 1027; affirmed (at p. 645).

Again as shown in the accounts, the parcel at 72-74 Springfield Avenue was sold January 22d, 1922, after the death of George Koellhoffer. A share of the proceeds thereof came into the trust; and a part of the fund on hand is allocable to that share. One-sixth of that part, together with the income allocable thereto since the respective life beneficiaries’ death, will pass under George’s will to the beneficiaries thereunder taking his real estate. Trenton Trust, &c., Co. v. Moore, 83 N. J. Eq. 584; 91 Atl. Rep. 908; affirmed, 84 N. J. Eq. 194; 93 Atl. Rep. 1087. George’s will and perhaps the parties concerned under his will (in which case they will be entitled to be heard) are not before the court. The persons taking this one-sixth interest and the amount so allocable to them (if the interested parties cannot agree upon it) may be settled upon further application of counsel. The other five-sixths interest and the income allocable thereto will pass in five equal shares to the personal representatives of the other four sons who died after 1922, and to Mary Blank.

Further from the accounts it appears that property at 66 Springfield Avenue, Newark, was acquired by the trust on July 1st, 1934, upon foreclosure of a mortgage held in trust; and it was sold by the trustee December 19th, 1941. Under the law—at least as it stood prior to Laws 1887, chapter 20 (now R. S. 3:20-3; N. J. S. A. 3:20-3)—the portion of the fund on hand allocable to this parcel would pass to Mary Blank; to the personal representatives of Anthony, George and Theodore, Jr., who died prior to 1934; to the devisees of Conrad who died in 1939; and to the heirs of Charles who died in 1936. Barclay v. Cooper, 42 N. J. Eq. 516, 521; 9 Atl. Rep. 107; see Perrine v. Vreeland, 33 N. J. Eq. 102, 108; affirmed at p. 596. There are many loose statements made by courts of other jurisdictions which have had up for consideration the question of whether the proceeds of land acquired by the decedent’s administrator upon foreclosure of a mortgage in his hands are taken by the next of kin or heirs of the decedent. (The question here is quite different— namely, whether the interest in such land passes to the personal or real representatives of the decedent’s next of Icin.) These statements are broadly that the land is personalty for all purposes of devolution. Fifield v. Sperry, 20 N. H. 338; Lockman v. Reilly, 94 N. Y. 64; Coombs v. Furey, 225 Ill. 61 (cf. the Illinois statute in Kenny v. Keplinger, 89 Ill. App. 570); Rogers v. Rogers, 101 Tenn. 428. The cases are not controlling.

The 1887 statute does not, in my view, upset the ruling of the Barclay case, which, it may be remarked, was decided early in 1887. The statute (now R. S. 3 :20-3; N. J. S. A. 3:20-3) provides that the real estate so purchased by the fiduciary shall be “an asset of the estate in his hands.” But the word “asset” is not confined to personalty; it has reference commonly to realty subjected to a decedent’s debts. Bouvier’s Law Dictionary; 3 Wms. on Executors (7th Am. Ed.) 140. R. S. 3 :20-4; N. J. S. A. 3 :20-4 merely provides that “The proceeds of a sale and conveyance of real estate pursuant to section 3 :20-3 shall be received, acqounted for and paid over by the fiduciary in the same manner as he would have been required to do with the proceeds of the mortgage.” The word “manner” referring to payment has to do with the procedure of payment; it cannot be said to overturn the preexisting law as to who should make up the class of payees. Cf. Cameron v. Crowley, 72 N. J. Eq. 681; 65 Atl. Rep. 875. Nor does the differing language of the three statutes amalgamated by the revisers into R. 8. 3:20-4; N. J. S. A. 3:20-4 lend support to the notion that the realty in the fiduciary’s hand is to devolve as personalty. The statutory provisions in other states bearing some resemblance to R. 8. 3:20-3 and 3:20-4; N. J. S. A. 3:20-3 and 3:20-4 (except the Illinois statute), more explicitly provide that the land acquired constitutes personalty. 110 A. L. R. 1397.

The portion of the proceeds of the parcel at 66 Springfield Avenue allocable to the devisees and heirs of Conrad and Charles, the income thereon allocable thereto and the persons taking the same can be settled upon further application of counsel. It may be observed now with respect to the matter of the income thereon that the income accruing to the deaths of Conrad and Charles, respectively, will pass to their respective personal representatives, while the income accruing thereafter will go to their respective devisees and heirs.

The property at 230 Norwood Avenue, Deal, which was acquired by the trustee by foreclosure on April 26th, 1940, was sold by him on December 30th, 1940, and, none of the next of kin of Theodore, Sr., having died in the interim while it was realty, the proceeds will pass as personalty.

I have no doubt that Laws 1915, chapter 181 (now R. 8. 3 :26-2; N. J. S. A. 3 :26-2) amending the statute to permit of “distribution” by a testamentary trustee of estate in his hands, is not to be construed so narrowly as to deny the Orphans Court jurisdiction to direct the passage of the proceeds of real property acquired by the trustee upon foreclosure of a mortgage held in trust, notwithstanding that the proceeds pass as realty. Compare R. 8. 3:20-4; N. J. S. A. 3:20-4.

I will advise a decree in accordance with this opinion.


text:
    State Board of Tax Appeals.
    BOBBINK & ATKINS, PETITIONER, v. CITY OF CLIFTON, RESPONDENT.
    Decided April 13, 1942.
    For the petitioner, Corbin & Sarty (by Ralph A. Corbin and William A. Sumner).

    For the respondent, John J. Dluhy.

   Quinn, President.

The caption represents thirteen appeals from judgments of affirmance by the Passaic County Board of Taxation of assessments made by the respondent taxing district, for personal property of petitioner, for the year 3940. The common question presented for determination is as to whether growing nursery stock, constituting the stock in trade of the petitioner, commercial nurserymen, was properly assessable for taxation as personal property. Petitioner contends that its stock was part of the realty in which it was growing, and that the real estate assessment, not here in issue, must be deemed inclusive thereof. It further argues that the personalty assessments herein in question, concededly based almost exclusively upon such stock, must be reduced or canceled to the extent that they are so based, upon the asserted ground that the property is not personalty, but realty, as stated. Respondent urges that the property was taxable personal property, or in the alternative, that this board should correct the assessment upon real estate, if necessary, in order to avoid the consequence of an escape from taxation of this property, in its 'entirety, for the year in question. It has been agreed that the question of valuation of the property should be withheld for hearing, pending our determination of the legal issues stated.

The business of the petitioner is operated on a number of tracts of land, aggregating approximately 200 acres. Most of the land is owned, some of it leased, by petitioner.. As of the assessing date, it was growing its stock, consisting of evergreen and deciduous trees, deciduous shrubs and vines, upon these lands. The plants are all perennials, ranging in age from seedlings to twelve and fourteen year old trees. All of them are priced, and subject to severance and sale at such prices, upon selection by petitioner’s customers. They were concededly planted with the sole view of maintenance and growth pending sale. The, trees and shrubs upon the leased land were undoubtedly the property of petitioner in as full a sense as- thdse growing upon its own lands.

The problem presented for adjudication appears to be one of first impression in this state, and is attended with some' difficulty of solution, as the tax acts do not specify what shall be included under the respective terms, real property and personal property, and because the' case and common law authority on the general question of the nature of trees, shrubs, crops, &c., as real or personal property, has been developed in the' fields of real property law, along lines designed to effectuate the intentions of private parties, among each other. The predominating view in situations between vendor and vendee, executor and heir, landlord and tenant, and mortgagor and mortgagee, or their creditors, is to the effect that property of the type here in question is realty. 1 Thompson on Real Property (1939), p. 118; Haddonfield Safe Deposit and Trust Co. v. Liggit (Court of Chancery, 1929), 11 N. J. Mis. R. 269; 165 Atl. Rep. 89; Bigler v. Simon (Supreme Court, 1933); 11 N. J. Mis. R. 113; 164 Atl. Rep. 861; Ahern v. Littl (Court of Chancery, 1918), 90 N. J. Eq. 72; 105 Atl. Rep. 597; Howell v. Schenck, 24 N. J. L. 89; 1 Jones on Mortgages, § 539. The rule is not invariable, as a contrary intention on the part of the parties, if sufficiently obvious, will be enforced by the courts, and the property treated as personalty. Id. Por example, it could hardly be doubted that if the owner of the lands which petitioner has leased were to deed them to a third person, the conveyance would not divest the title of the lessee to these trees and shrubs or prevent it from removing them, either during or at the conclusion of the term of the lease, See Duffus v. Bangs, 122 N. Y. 423.

It will thus be apparent that resort to traditional authorities, as relied upon by petitioner, is not dispositive of the question before us, that being whether it was the legislative intention, in enacting the general tax laws now found in the Eevised Statutes, title 54, chapter 4, to subsume this genus of property under the head of realty or of personalty. The question is not merely academic, aside from the effect of its solution upon the parties before us, as important consequences flow from a classification of property as real or personal. Por example, the tax on realty is not a personal charge against the owner thereof, as is the case with personalty taxes. R. 8. 54:4-l; N. J. S. A. 54:4-l. The latter, furthermore, are enforceable by distraint, arrest and imprisonment, as well as by action at law. R. 8. 54:4-78, 54:4-79, 54:4-1; N. J. S. A. 54:4-78; 54:4-79, 54:4-1. A guess as to the policy underlying the different and more stringent legislative treatment of delinquent personal property taxes, may furnish a clue as to the legislative intent in the matter now in hand. The ease of removal and disposition of personalty generally, as contrasted with the fixity of real estate, undoubtedly induced the provision of extraordinary remedies for the satisfaction of delinquent personalty taxes. Similarly, -with personalty consisting of stock in trade, in order to avoid depletion thereof in fraud of taxes, prior to the assessing date, the statute provides for the estimation of this type of property at its average during the year preceding the assessing date. R. 8. 54:4-11; N. J. S. A. 54:4-11. These considerations are strongly persuasive of the view that the property here in question, constituting as it does the stock in trade of the petitioner, as fully and as realistically as that of merchants and manufacturers generally, and as readily saleable and disposable, should be regarded as intended by the legislature to partake of the tax status of personalty. . That result would have the salutary effect of preserving the personal responsibility of petitioner and others in the same business, for the taxes in question, rather than the bare land, which could readily be stripped of this property to defeat the tax collector.

The courts of two other jurisdictions have regarded it as sound for shrubs and trees of nurserymen to be assessed as personalty, although the particular issues before them were controlled by statutes. See Swain Nelson and Sons Co. v. Department of Finance (1937), 365 Ill. 401; 6 N. E. Rep. (2d) 632, 633; Miethke v. Pierce County (Wash., 1933), 23 Pac. Rep. (2d) 405. In the case first cited the court specifically considered that such property was properly assessable as personal property, for the reason that it was grown for the express purpose of sale, independently of the requirement of the statute.

’ While it is true that prior to the Tax Act of 1903, the general tax laws defined “real estate” and “personal estate,” for general tax purposes, Pamph. L.‘ 1866, p. 1078, §§ 3 and 4, and that the definition of real estate included “trees and underwood growing thereon,” we have not regarded it as significant in the present connection, that the act of 1903 (Pamph. L., p. 394) omitted the inclusion of this definition, as did also the later and present statutes. It is uncertain whether the former reference to “trees, &e.,”’ would have comprehended such property as is here involved, and the significance, if any, of the elimination of the definition, is questionable, in view of the detailing of several other tj'pes of property as realty, under the former act.

Our conclusion is that petitioner’s growing shrubs and trees were properly assessed as personal property. The cases will be set down on the day calendar for hearing as to valuation.

So ordered.


text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    ROBERT WEILAND, PETITIONER, v. AMELIA LEONARDI BORGHI, ALSO KNOWN AS OLGA CINNETTI, INDIVIDUALLY AND TRADING AS LEONARDI POULTRY FARM, RESPONDENT.
    Decided April 15, 1942.
    For the petitioner, James Hart.

    For the respondent, Hugh 0. Baldwin.

   At the time of the trial of said cause, it was stipulated and agreed by and between counsel for the respective parties that the respondent be properly designated in the petition as Amelia Leonardi Borghi, also known as Olga Cinnetti, trading as Leonardi Poultry Farms and Hugh C. Baldwin, attorney for the respondent, also stated that the respondent was also known as Amelia Leonardi. The original answer filed by the respondent stated that her name was Amelia Leonardi and was signed by her as Amelia Leonardi. The amended answer stated that her name was Amelia Leonardi Borghi and she signed as Amelia Leonardi Borghi.

The petition filed in this matter alleges that the petitioner was in the employ of the respondent on August 1st, 1940, as a farm hand on the premises located in Sussex, Hew Jersey, known as Leonardi Poultry Farm at which time the petitioner was performing work for the respondent in removing the bellyband from a horse on said premises; that the petitioner was removing said bellyband from the horse when the horse kicked forward with his left hind foot, kicking the petitioner in the left leg above the ankle as a result of which he sustained personal injuries.

The answer of the respondent admits that she had notice and knowledge on August 1st, 1940, of an accident but sets up the following defense in answer to question No. ST of the amended answer: “Because he was working with me under a farm agreement on shares 2. Because at the time of the making of my agreement with him he represented to me that he was a good general farmer and understood the proper care of farm animals which in fact was untrue and was relied upon by me and was made with the intention of defrauding and deceiving me in order that he might obtain a position. It is true that I agreed to pay him $40 per month for his first two months on the farm as he was in destitute circumstances.”

This matter now coming on for trial to determine the question of liability of the respondent and the extent of disability of the injuries sustained by the petitioner while in the employ of Amelia Leonardi Borghi, also known as Olga Cinnetti, individually and trading as Leonardi Poultry Farm, on August 1st, 1940; and it appearing that the petitioner was employed as a farm hand at the rate of $40 per month, plus board and maintenance. ij: sfc ❖ ❖ # ❖

It further appearing that the attorney for the respondent, at the end of the hearing, made an application for a dismissal of the petition on the grounds of fraud by the petitioner-at the time he was employed by the respondent and that the motion was denied.

It is further appearing from the testimony of the petitioner that he was a good general farmer and understood the proper care of farm animals and that he was not guilty of fraud at the time of his employment by respondent and the court being satisfied that he was not guilty of such fraud.

It is further ordered that judgment be entered in favor of the petitioner and against the respondent, under the names of Amelia Leonardi Borghi, also known as Amelia Leonardi, also known as Olga Cinnetti, individually and trading as Leonardi Poultry Farm, it appearing that the respondent uses all three names, and that judgment be entered accordingly as aforesaid.

John C. 'Wegner,

Deputy Commissioner.