author: Leyden, C. C. J.

text:
    Essex County Circuit Court.
    TITLE CLEARING CORPORATION, A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF, v. MORRIS H. KLEIN, MILDRED J. HELD, MAX T. SAX, HERMAN SAX, UNITED STATES OF AMERICA, THE CITY OF NEWARK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, AND NEWARK TIDEWATER TERMINALS, INC., A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS.
    Decided May 26, 1941.
    For the plaintiff, Richard J. Filz Maurice.

    For the defendants Klein et al., Harold Simandl and Joseph Coull.

      For the defendant the United States of America, no appearance.
    For the defendant the City of Newark, James F. X. O’Brien (by Raymond Schroeder).

    For the defendant Newark Tidewater Terminals, Inc., Lum, Tamblyn .& Fairlie (by John S. Foster).

   Leyden, C. C. J.

The plaintiff in its complaint demands of the defendants possession of a tract of land with the appurtenances, situate in the City of Newark, containing 2.59 acres more or less, * * * (description omitted).

The plaintiff alleges that its right to possession accrued on February 16th, 1829, and the defendants wrongfully deprive it thereof to its damage in the sum of $200,000. The summons was issued August 23d, 1937.

The United States of America filed no answer. The defendants Klein et al. and the Newark Tidewater Terminals, Inc., each filed an answer denying the truth of the matters contained in the complaint, and the defendant the City of Newark, in addition to a general denial, gave notice of its claim for an allowance and set-off for permanent improvements amounting to $61,479.75.

The case was tried by the court without a jury. After examining the evidence, hearing the testimony and counsel for the plaintiff and defendants, the court finds the following facts:

• By stipulation between the plaintiff and the defendant, the City of Newark, the plaintiff withdrew its claim for damages and the City its claim for allowance and set-off for permanent improvements; both withdrawals being without prejudice.

It was stipulated by and between counsel for the respective parties that the lease to the Tidewater Terminals, Inc., and the ordinance of the City of Newark authorizing said lease cover the premises in question, and that said premises are also known in the city records as lot 2 in block 1585 and lot 3 in block 1586 and were formerly known as section 8, plot 16.

Enos Pierson and Abigail, his wife, * * * in consideration of the sum of $1,250, conveyed to Daniel Smith, William Williams, Stephen D. Day, Samuel Williams, Amos Williams, Abraham P. Meeker and William Condit, * * * four lots or tracts of land, the third of which is the lot or tract in question, by deed dated the 16th day of February, 1829, * * * and recorded March 2d, 1829, in Book Z-2 of Deeds, * * * page 549-551.

On May 12th, 1829, approximately three months later, said’ seven grantees with their respective wives, in consideration of the sum of $843.54, conveyed the first tract described in the Enos Pierson deed to Stephen Condit * * *. This conveyance was * * * recorded in Book B-3 of Deeds, page 412, &c.

On May 12th, 1829, William Williams, Stephen D. Day, Abraham P. Meeker, William Condit, Samuel Williams and Amos Williams, six of the said seven grantees, with their respective wives, in consideration of the sum of $450, conveyed the second tract mentioned in the deed of Enos Pierson to Daniel Smith * * * one of the seven grantees. This instrument was * * * recorded on the 9th day of Juno, 1829, in Book B-3 of Deeds, page 465, &c.

No conveyance of the remaining two parcels (one of which, the third tract, is the premises in question), out of the seven grantees or any of them appears of record. About eight years later, on the 20th day of July, 1837, Enos Pierson made and executed his last will and testament in the presence of P. Kingsley, E. P. Day and John M. King. This will was probated on June 26th, 1838. By it inter alia he gave and devised to his son, Lewis Pierson, his heirs and assigns forever, fourteen and twenty-hundredths acres of land known as the “Amos Place,” also “all my salt meadow lying, situate and being at a place called ‘Crab Pond. ”

On the 17th day of September, 1838, Lewis Pierson conveyed the premises in question to George W. Sharpe in consideration of the sum of $12.95 by the same description contained in the deed from Enos Pierson and wife to Daniel Smith and the six other grantees, with the additional descriptive clause: “Bounded Westwardly by Meadow now or formerly of Samuel Dodd & "Uzel Ogden Northerly by Nathaniel & Stephen Harrison Easterly by John Perry & Southerly by Jotham Harrison dec’d it being a lot of land bequéathed by Enos Pierson dec’d to the said Lewis Pierson.” This instrument was * * * recorded on the 9th day of May, 1844, in Book B-4 of Deeds, page 396, &c. .

The plaintiff traced its chain of paper title to the premises in questiqn beginning on the 16th day of February, 1829, as follows:

Deed from Enos Pierson and Abigail his wife, to Daniel Smith, William Williams, Stephen D. Day, Samuel Williams, Amos Williams, Abraham P. Meeker and William Condit, the said seven grantees. Daniel Smith died in 1853. His last will and testament was probated September 9th, 1853. He left him surviving as residuary legatees three daughters, Charlotte Traphagen, Harriet Carter and Catherine Smith; a grandson, William S. Pierson and such other grandchildren as should survive him. Charlotte Traphagen died intestate prior to October 21st, 1878, leaving her surviving Albert Traphagen, husband, Phoebe P. Traphagen, daughter, Fannie E. Traphagen, daughter, and Sarah Katherine Traphagen Cox, daughter. Sarah Katherine Traphagen Cox died testate December 29th, 1929, her will being probated on January 9th, 1930, leaving one-third of her residuary estate to Alberta Traphagen Cox Kelson, a daughter, a life estate in two-thirds to her son, Joseph E. Cox, Jr., and one-half of two-thirds of remainder, after the death of their father, Joseph E. Cox, Jr., to a grandson, Joseph E. Cox, 3d, and a granddaughter, Barbara Cox.

Deed from Phoebe Traphagen and Fannie E. Traphagen, both unmarried, Joseph E. Cox, Sr., and Mary Cox, his wife, Barbara Cox, unmarried, Joseph E. Cox, Jr., unmarried, and Fannie E. Traphagen and Joseph E. Cox, Sr., executrix and executor and trustees of the last will and testament of Sarah K. Cox, deceased, to the plaintiff. Joseph Edmund Cox life tenant, now distinguished with the designation “Senior” and Joseph Edmund Cox, a grandson, now distinguished with the designation “Junior” and Barbara Cox, remaindermen, are living. Joseph Edmund Cox, Jr., was born October 9th, 1914, and Barbara Cox was born August 20th, 1912.

Catherine Smith, unmarried, daughter of Daniel Smith, died November 26th, 1905. By her will, probated December 7th, 1905, she devised one part of the residue of her estate to her sister, Harriet Carter; one part to her nieces, Phoebe P. Traphagen, Fannie E. Traphagen and Sarah Katherine Traphagen Cox; and one part to her nephews, Prank, Bobert P. and Edgar Williams.

Harriet Carter, widow, died January 26th, 1916. By her will probated February 7th, 1916, she devised one-third of the residue of her estate to Mary Louise Carter, daughter; one-third to Elizabeth Carter, daughter; and one-third to her granddaughters, Helen L. Carter Anderson and Hilda H. Headley.

Deed from Mary Louise Carter and Elizabeth Carter to the plaintiff.

Hilda II. Headley, granddaughter of Harriet Carter, devised the residue of her estate to her husband, Harold W. Headley. He died November 4th, 1936, leaving a will wherein he devised the residue of his estate to his then wife, Sarah, and to his children Boberta Headley Beeve, then aged twenty years, and Prances Headley, then aged nine years.

Similarly the plaintiff has acquired by deed a portion of the interests, if any, of two other of the said seven grantees, namely, Amos Williams and Abraham P. Meeker.

It seems quite unnecessary to trace in detail the various steps in the descent of these interests from the ancestors Amos Williams and Abraham P. Meeker to the grantors of the plaintiff. Suffice it to say that ostensibly the plaintiff has acquired a paper title to the premises in question equal to an undivided 5/63ds interest out of the grantee Daniel Smith; an undivided 2/35ths plus a life interest in an undivided l/35th out of the grantee Amos Williams; and an undivided 1/21st interest out of the grantee Abraham P. Meeker, totaling an undivided 58/315ths interest plus an undivided l/35th of a life estate. It is unnecessary to determine accurately the quantum of the undivided interest of the plaintiff for the owner of such an interest may maintain ejectment.

There is no proof that the plaintiff or any of its predecessors in title, including the said seven grantees, ever exercised or asserted any proprietory interest, dominion, possession or control of the premises in question.

The defendants Klein et al., trace their chain of paper title to the premises in question beginning with the last will and testament of Enos Pierson, probated on June 26th, 1838, as follows:

The said will of Enos Pierson wherein he devised the premises in question, described as the salt meadow situate at a place called “Crab Pond” to his son, Lewis Pierson.

Deed dated September 17th, 1838, from Lewis Pierson to George W. Sharpe. This instrument was recorded May 9th, 1844.

Deed from George W. Sharpe and Sarah Sharpe, his wife, to William S. Perry, dated May 6th, 1844, and recorded May 9th, 1844.

The proof indicates without contradiction that William S. Perry was born in 1817 and died January 11th, 1900. He had married Mathilde Williams who died December 11th, 1879. The following six children were born to William S. Perry: (1) Lewis Perry, who died December 6th, 1872. His widow, Sarah A. Reed, died June 21st, 1903. Lewis Perry had two children, Jay E. Perry, who died December 16th, 1902. Jay E. Perry was survived by a son, Carl E. Perry, and a son, Lewis Perry. Carl E. Perry is married and his wife is Bessie Perry. The other child of Lewis Perry was named Margarette N. Perry, who was born in 1871 and died in 1872; (2).Martha Jane Perry who married Stephen Post. She died August 19th, 1881, leaving her surviving one child, Estelle Perry Hannan, wife of John Hannan; (3) Pyrena Perry who married Isaac A. Pierson. He died in 1903; (4) Stacy B. Perry; (5) Marion A. Perry who married Ebenezer Rice; (6) William W. Perry who was born in 1859 and died in 1866.

Deed from Marion A. Perry Rice, widow of Ebenezer Rice, to Lucy L. Fairchild, dated February 26th, 1920, for a lot of meadow land known and designated on the assessment maps of the City of Newark as lots 2 and 3 in block 1585 and lots 3 and 4 in block 1586 containing five acres, more or less, which embraces the premises in question.

Deed from Pyrena Perry Pierson, widow of Isaac A. Pier-son, to Lucy L. Fairchild, dated February 26th, 1920, conveying the premises in question by the assessment map designation.

Deed from Lucy L. Fairchild and Cecil- Fairchild, her husband, to Morris H. Klein, dated July 2d, 1935, conveying an equal undivided two-fifths interest acquired from Marion A. Perry Rice and Pyrena Perry Pierson in the premises in question to this defendant.

Deed from Stacy 13. Perry et ux. and Estelle Hannan and John E. Hannan, her husband, to David L. Perry, dated May 5th, 1920, convoying the premises in question.

Deed from David L. Perry et ux., to Stuart Lindsley dated July 26th, 1935, conveying an equal undivided two-fifths interest of the grantors to the premises in question. David L. Perry is described in this conveyance as the son of Stacy B. Perry.

Deed from Stuart Lindsley et ux. to Morris II. Klein dated August 7th, 1935, conveying an equal undivided two-fifths interest in the premises in question.

Deed from Lewis K. Perry and Edith, his wife, and Carl E. Perry and Bessie, his wife, to Morris II. Klein dated August 5th, 1935, conveying an equal undivided one-fifth interest in the premises in question.

Deed from Morris II. Klein and Anna M., his wife, to Max T. Sax, Mildred J. Held and Herman Sax dated January 11th, 1936, conveying an undivided three-quarter interest in the premises in question.

There is some testimony tending to support the inference that on occasions, William S. Perry cut the salt hay on the land which he owned in the Newark meadows.

In its bill of particulars of claim or title the City of Newark traced a supporting chain of paper title beginning December 27th, 1907, with a deed from the Comptroller of the City of Newark to Florence C. Cahill under Pamph. L. 1886, ch. 112, commonly called the Martin Act; then from Cahill to Communipaw Central Land Co., to the City of Newark, to the United States of America, to the City of Newark (under contract to repurchase). This effort was abandoned and the City of Newark elected to rely upon, its open, notorious and continued possession of the premises in question for more than twenty years next before the commencement of the present proceeding. Briefly, the proof of the City of Newark demonstrates that prior to 1914 there was considerable agitation in the City of Newark for the reclamation of the meadow-lands and the development of the Newark Bay area-into’ a port. Dr. Charles F. Kraemer, a witness for the city, had studied the possibilities of the development of the port since 1907. After filling an unexpired term as a member of the Board of Street and Water Commissioners of the city he was elected a member thereof, campaigning upon a platform planked solely with the project for the reclamation of the meadows and the development of the area. On January 2d, 1914, the day after his assumption of the duties of the office for the full term, Dr. Kraemer and a group of city officials, after wide publicity, conducted a ground breaking ceremony on the site. He made public announcement at noon on that day that the city had acquired title to sixty per cent, of the meadow and the owners of the other forty per cent, should take notice that the city was then taking possession thereof and the period of adverse possession would thereupon commence. At first blush such an announcement upon the part of a layman seems startling, but when one considers that the difficulties surrounding the acquiring of good title by purchase were apparent to the law department of the city and that it undoubtedly instigated and composed the announcement, the testimony is quite credible and it is so found as a fact.

After the taking of pictures to commemorate the occasion the city proceeded in accordance with a preconceived plan to dredge the present ship channel and to use the hydraulic fill therefrom to raise the level of the meadow to the required height. 'The premises in question are in the area so affected. A sign was erected at or near the corner of the premises in question advising the general public t-hat the area was the site of the development of the Port of Newark, and further and more detailed information would be furnished at the city hall on application therefor. The dredging was finished in 1914, after which Port street was graded, paved and necessary railroad tracks laid in 1915. Other streets, water, gas and sewer mains, electrical conduits, lumber bulkheads and wharves were laid and constructed by the city. The city employed watchmen at the private railroad crossing and prevented access to the area by non-business visitors. The city exercised possession, dominion and control to such an extent that it leased the area known as the Army Base to the United States Army in 1917, and in 1916 or 1917 leased portions of the said area to two tenants. On April 10th, 1919, the city convoyed the army base area which included the premises in question to the United States Government and thereafter the United States Government by contract, agreed to re-convey the base area to the city upon the completion of the installment payments therein specified.

The possession of the city of this area, which includes the premises in question, from January 2d, 1914, was open, visible, notorious, continuous and uninterrupted for more than twenty years prior to the institution of this litigation by the plaintiff on August 23d, 1937; 'in fact, it has so continued to the present time.

The plaintiff raises two nice points in opposition to the city’s claim of title by adverse possession, namely: (1) that the city by the purchase of a supporting paper title arising out of the attempted foreclosure of the tax lien under the Martin Act has broken the continuity of the intentional hostility as against the whole world, so necessary in a claim of title by adverse possession; and (2) that the running of the statute (N. J. S. A. 2:24-12) has been tolled by intervening disabilities of infancy and outstanding life estates.

The first point is developed by the plaintiff’s proof, as part of its main case, of the city’s purchase of a paper title commencing, as has already been pointed out, on December 27th, 1907, with a deed from the Comptroller of the City of Newark to Florence C. Cahill under the Martin Act, supra, and also upon the alleged admission by the city in its bill of particulars that it would rely, in addition to its claim of title by adverse possession, on said supporting paper title. The second point is developed by the fact that during a portion of the twenty-year period Barbara and Joseph E. Cox, Jr., were infant remaindermen with an outstanding life estate in their father, Joseph E. Cox, Sr. Similar intervening disabilities and life estates arose in the descent of the alleged interests of Harriet Carter, daughter of Daniel Smith and Alfred G. Williams, son of Edward Williams, grandson of Amos Williams.

There are at least two answers to these points of the plaintiff. As to both contentions, the plaintiff cannot succeed on the weakness of the defendant's title. More particularly as to the second, the proof shows that when the statute (N. J. S. A. 2:24-12) began to run on January 2d, 1914, if the paper title of the plaintiff is sound, Sarah Katherine Traphagen Cox was vested with an undivided interest in the premises in question with a right of entry which had descended to her about October 21st, 1878, and had remained in her to her death on December 29th, 1929. There is no proof that she was laboring under any disability on January 2d, 1914, or for the fifteen years, eleven months and twenty-seven days which elapsed from the entry into possession by the city to the date of her death. It was her last will and testament which created the life estate in her son, Joseph E. Cox, Sr., with the remainder over to her grandchildren, Joseph E. Cox, Jr., and Barbara Cox.

Similarly Harriet Carter, daughter of Daniel Smith, died on January 26th, 1916, two years and twenty-four days after the city had entered into possession of the premises in question. There was no proof that she was laboring under any disability on January 2d, 1914. It was by her last will and testament that the residue of her estate was devised to her daughters, Mary Louise Carter and Elizabeth Carter and to her granddaughters, Helen L. Carter Anderson and Hilda H. Headley.

Likewise Alfred G. Williams was vested with an undivided interest with a right of entry on January 2d, 1914, as the devisee of his father, Edward Williams, who died April 21st, 1893. Alfred G. Williams died March 7th, 1929, fifteen years, two months and five days after the city entered into possession. There is no proof that he suffered any disability on January 2d, 1914. It was by his will that he created a life estate in his wife, Josephine B. Williams, with the remainder over to the rector, wardens and vestrymen of Holy Trinity Episcopal Church of Orange, New Jersey. Therefore when the statute commenced to run, those persons, namely, Sarah Katherine Traphagen Cox, Harriet Carter and Alfred G. Williams, who had an undivided interest and a right or title of entry in the premises in question were neither insane nor under the age of twenty-one years.

The settled rule is that when the statute of limitations has once begun to run against a person who has a present right of entry and who is under no legal disability, its course will not be impeded nor its operation suspended by any subsequent disability. Den ex dem. Clark v. Richards, 15 N. J. L. 347; Thorpe v. Corwin, 20 Id. 311; Pinckney & Bruen v. Burrage & Stephens, 31 Id. 21; Freeholders of County of Somerset v. Veghte, 44 Id. 509; Freeman v. Conover, 95 Id. 89; 112 Atl. Rep. 324. The running of the statute therefore was not tolled.

In any event these points avail the plaintiff nothing. To succeed, the plaintiff must do so on the strength of its own title and it cannot rely upon the weakness of that of its adversaries. Troth v. Smith, 68 N. J. L. 36; 52 Atl. Rep. 245; Winfield v. Saunders, 105 N. J. L. 580; 147 Atl. Rep. 537. The plaintiff has failed to establish its title or right to possession by a preponderance of the evidence.

The plaintiff traced its chain of paper title to Enos Pier-son in 1829 with no showing of possession in the plaintiff or any of its predecessors in title. Defendant Klein et al. traced his chain of paper title to the same source with a possible showing of the exercise of some dominion over the property by one of his predecessors in title. The defendant city traced its right to possession to January 2d, 1914, a source not common with either that of the plaintiff or the other defendant. Its claim of title by adverse possession in the bill of particulars does not admit good paper title in the plaintiff. The rule is well settled that the plaintiff must, in order to succeed, trace its paper title back to some one who is shown to have been in possession of the premises in question, or failing in that, it must show that its grantor acquired title from the original proprietors, or it must trace its title back to a common source, provided the defendant does not claim by any other title. Troth v. Smith, supra; Rollins v. Atlantic City Railroad Co., 70 N. J. L. 664; 58 Atl. Rep. 344; Wittke v. Wittke, 102 N. J. L. 176; 130 Atl. Rep. 598. At least in so far as the city is concerned, the plaintiff has not complied with this rule of law. Its failure so to do permits the defendant the city of Newark to retain possession until ousted by some one who has a superior title. Troth v. Smith, supra.

The verdict is in favor of the defendants and against the plaintiff, and a judgment may be entered accordingly.


source: Caselaw Access Project

author: Quinn, President.

license: Public Domain

text:
    State Board of Tax Appeals.
    TOWN OF MORRISTOWN, PETITIONER, v. TOWNSHIP OF RANDOLPH, RESPONDENT.
    Decided May 27, 1941.
    Por the petitioner, Nathaniel O. Toms.

    Por the respondent, Morris II. Saltz.

   Quinn, President.

Fourteen appeals are brought by petitioner to reduce or cancel assessments upon certain parcels of real property, some improved and some unimproved, owned by it and assessed for taxes by the respondent taxing district for the year 1939. The lands are part of the water supply system of the Town of Morristown. The buildings are tenanted structures, contemplated for eventual removal. They do not relate to the water supply function served by the lands. The land appeals have been withdrawn, and the only issue presented is as to the claimed right of examination from taxation of the improvements, urged on behalf of petitioner. The Morris County Board of Taxation dismissed the appeals on all of these properties.

Under Trustees v. Trenton, 30 N. J. Eq. 668, it was held that property of taxing districts is not subject to the operation of R. S. 54:4-1; N. J. S. A. 54:4-1, declaring that all property within the state, not expressly exempted under the taxing statutes, is subject to taxation annually at its true value. In that ease it was held that general statutes prescribing what property should be taxable, would not be construed as applicable to the property of the state or its political subdivisions. And see Jersey City v. Blum (Court of Errors and Appeals, 1925), 101 N. J. L. 93; 127 Atl. Rep. 214.

The attempt to lay an assessment on the property here in question is not based upon any cited act subjecting such property to taxation. While, under R. S. 54:4-3.3; N. J. S. A. 54:4-3.3, lands of municipalities, used for public water supply, are subjected to taxation, that act specifically excludes “any buildings or other improvements thereon, from its scope.” There is no distinction made based upon the nature of the use to which such buildings are put. As a matter of plain statutory construction therefore, none of the improvements here in question were taxable, and cancellation will be ordered of all such assessments in the pending appeals. The land assessments will be affirmed.

Judgments accordingly.


text:
    State Board of Tax Appeals.
    THE HAVEN OF GRACE, PETITIONER, v. TOWNSHIP OF LAKEWOOD, RESPONDENT.
    Decided June 10, 1941.

      For the petitioner, Franklin II. Berry.

    For the respondent, Milton Miller.

   Quinn, President.

This is an appeal for exemption from taxation of certain real property assessed by the respondent for the year 1939, allegedly used exclusively for religious purposes, within R. S. 54:4-3.6; N. J. S. A. 54:4-3.6.

The property in question consists of land originally purchased by Margaret L. Wiesenberg and Charles Wiesenberg, her husband, and buildings subsequently erected by them thereon. These persons conveyed the premises to the petitioner corporation May 13th, 1938, the grantee having been incorporated April 30th, 1938. The named grantors are two of three trustees of the corporation, and they control it. They are also officers of The Christian Witness to Israel, Inc., a New York corporation, which is apparently the beneficial owner of the property, having furnished the funds for the erection of the buildings.

The main building on the premises consists of a five-room dwelling, in which the Wiesenbexgs reside, attached to which is another building containing a garage and office. In this office, as of the assessing date, three clerical employes were occupied in sending out typed letters pertaining to the work of The Christian Witness to Israel, Inc., aforementioned, and in distributing a printed booklet concerning the work of that body. Some of these books were sold at 35 cents per copy, and some were given away. The employes received salaries of from $10 to $15 per week, and the Wiesenbergs $70 per month, each. In addition to these activities persons were invited to live at the premises in what is described as a “rest home.” Some made contributions in return, while others did not.

The certificate of incorporation of petitioner recites, among other things, the corporate purpose, “to conduct one or more rest homes, at cost, for converts to the Christian religion, made by The Christian Witness to Israel, Inc., or otherwise }f! if! if!

The statute cited by petitioner as the basis for its claim, R. S. 54:4-3.6; N. J. S. A. 54:4-3.6, recites, so far as is here material, that there should be exempted from taxation, “* * * all buildings actually and exclusively used for religious worship * * *; used in the work of corporations organized exclusively for * * * religious purposes." The uses must also be not for profit, and the exemption claimant must own the property in question, be incorporated under the laws of this state, and authorized to carry out the exemption purposes.

The activities of petitioner fail to meet the statutory requirements. “Rest homes,” so far as is here shown, do not constitute religious activities. The corporation is not, therefore, organized exclusively for religious purposes, nor exclusively engaged in religious worship or activity. The residence of the Wiesenbergs in a substantial portion of the building is not within any exempted use provided by- the statute. Nor are the clerical activities of workers distributing literature for a corporation of the State of New York, as was proven. The religious aspects of the use of this property seem to us to have been merely incidental, not primary, and, in any event, did not constitute the exclusive function of the premises, as is required by the statute. See American Sabbath Tract Society v. City of Plainfield, New Jersey Tax Reports, 1934-1939, p. 99.

The judgment of the Ocean County Board of Taxation, denying the exemption sought, will be afiirmed.


author: Harry S. Medinets, Deputy Commissioner.

text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    WILLIAM LIEBERMAN, PETITIONER, v. HARRY WARMAN, RESPONDENT.
    Decided May 22, 1941.
    For the petitioner, David Bosleein.

    For the respondent, McCarter, English, & Egner (Verting C. Enteman, of counsel).
   A petition to re-open a previous judgment in the above entitled matter, was filed by the petitioner pursuant to B. 8. 34:15-27 for the purpose of increasing the award for his disability which he alleged has increased since the previous adjudication.

It appears that on October 31st, 1934, a judgment was entered in favor of the petitioner and against the respondent, wherein it was found and determined that the petitioner on August 26th, 1933, sustained an accident arising out of and in the course of his employment with the respondent, and that the petitioner’s wages were $30 a week.

It was further determined that the petitioner sustained, as a result of said accident, injuries to his back which entitled him to compensation for temporary disability for a period of 15 weeks, from August 26th, 1933, to December 9th, 1933, and permanent disability to the extent of 3% of partial permanent total disability, entitling him to compensation for 15 weeks at the rate of $20 a week. At that time, Dr. Isidore Haskell appeared as a medical witness for the petitioner and Dr. Irving Vanderhoff appeared as a medical witness for the respondent.

Subsequent thereto, a formal petition was filed praying for additional compensation resulting from an increase in the petitioner’s disability. This application came on for hearing on September 23d, 1935, at which time the testimony of Dr. Isidore Haskell and Dr. Irving Vanderhoff was taken. As a result of the said hearing, Deputy Commissioner John J. Stahl entered an award wherein he found, inter alia, that since the prior determination the petitioner had sustained an increase in disability to his back, which increase in disability was caused by the accident of August 26th, 1933. The deputy commissioner found that the petitioner’s disability was equivalent to 8% of total, and directed the respondent to pay the same, together with costs.

Within the statutory period, a third and subsequent petition was filed, praying for additional compensation for the petitioner due to further increase in his disability. Testimony on behalf of the parties was adduced before me.

The sole question for determination was whether or not the petitioner’s disability has in fact increased since the last adjudication.

Dr. Samuel B. Greenwood who took X-rays of petitioner’s spine testified that the plates revealed a scoliosis in the dorsal lumbar region with a convexity to the right, together with a lipping of the lower angle of the ilium at the right sacro-iliac joint. They further indicated that the lumbar sacral joint was narrow on October 26th, 1939. Be-examination on October 16th, 1940, by Dr. Greenwood does ont indicate that any change in the bony structure demonstrable by X-ray has taken place in the interval.

The testimony of the petitioner reveals that he was under treatment by Dr. Haskell and Dr. Avidan since the prior adjudication, having received his last treatment by Dr. Avidan early in 1940.

It is significant to note that Dr. Haskell and Dr. Yanderhoff, the two original examining physicians had died in the interim.

In order to ascertain if there has been an increase in petitioner’s disability proofs of petitioner’s former condition are necessary. Cirillo v. United Engineers and Constructors, Inc., 121 N. J. L. 511; 3 Atl. Rep. (2d) 596. In the Cirillo case the court stated: “The use of the word ‘increase’ or of the word ‘decrease’ connates two states of physical condition, one which was and one which is, and there must be knowledge of each state in order to support a conclusion that the present condition marks an increase or a decrease. When once the degree of disability from which a workman suffers at a named time has been judicially determined, then in fairness both to the employer and to the employe the question of increase or decrease in disability must be predicated upon the conditions as it was at the hearing out of which the determination emanated.”

The medical witnesses who testified at the present trial were not the original examining physicians. The facts of petitioner’s condition at the prior hearing were not within the personal knowledge of these witnesses. In order to determine whether or not there has been an increase in disability those prior findings must be made known to them. Again, in the Cirillo case, supra, it was stated: “To make such testimony competent for that purpose the witness should at least be informed from his own 'knowledge, made manifest, or from proofs aliunde incorporated into a question what the workman’s condition was at the time when the court rated it at a fixed partial permanent disability.”

The findings of the deceased medical witnesses at the prior hearing were incorporated into hypothetical questions put to the medical witnesses at the present trial. It is elementary that where a trial has been had and witnesses testified and opportunity for cross-examination was afforded the parties, and where said witnesses have since deceased, their testimony is admissible in a subsequent proceeding involving the same parties and subject-matter. Berney v. Mitchell, 34 N. J. L. 339.

I therefore felt that the physicians for both the petitioner and respondent may allude and refer as a basis for comparison, to the condition of the petitioner as it existed at the time of the prior adjudication and base their opinion as to the character and extent of the change in the disability on the testimony adduced at that time. This was done.

Hi # Hi Hi ❖ Hi *

In order to establish and obtain an amended compensation allowance for an increase or decrease in disability, the burden is on him who asserts the change. Pasquale v. Clyde Pure Dye Works, 120 N. J. L. 557; 1 Atl. Rep. (2d) 45; Tucker v. Frank J. Bellramo, Inc., 117 N. J. L. 72, 80; 186 Atl. Rep. 821; affirmed, 118 N. J. L. 301; 192 Atl. Rep. 62; Rotino v. J. P. Scanlon, Inc., 15 Atl. Rep. (2d) 336.

I find that petitioner has sustained the burden placed upon him by law in proving an increase in disability.

The respondent in order to avoid liability must ascribe the increase to a cause other than that alleged by the petitioner. The burden of proving such is on the respondent. Atchison v. Colgate, 102 N. J. L. 425; 131 Atl. Rep. 921; Murowisky v. Pyrene Manufacturing Co., 17 N. J. Mis. R. 390; 9 Atl. Rep. (2d) 683. I feel that the respondent has completely failed to sustain the burden placed upon it, there having been no corroboration in any degree either by testimony of others on laboratory tests of respondents contentions.

Hi • Hi ❖ ❖ H* . Hi Hi

Harry S. Medinets, Deputy Commissioner.


author: Per Curiam.

text:
    THE PORT OF NEW YORK AUTHORITY, PROSECUTOR, v. CITY OF UNION CITY, DEPARTMENT OF REVENUE AND FINANCE OF THE CITY OF UNION CITY, AND WILLIAM F. MEEHAN, COMPTROLLER OF THE CITY OF UNION CITY, DEFENDANTS.
    Submitted January term, 1941
    Decided May 17, 1941.
    Before Brogan, Chief Justice, and Justices Parker and Perskie.
    For the prosecutor, Russell E. Watson (Austin J. Tobin, Daniel B. Goldberg and O. Thomas Schettino, of counsel).
    For the defendants, James O. Agnew.

   Per Curiam.

This writ was allowed to review certain assessments for the year 1940 levied on property of the prosecutor, The Port of New York Authority, by the taxing department of the defendant City of Union City. The validity of the tax is challenged, the prosecutor taking the position that the property acquired, as it admittedly was, for tunnel purposes, is exempt by law from taxation. The prosecutor is a municipal corporate instrumentality of the States of New York and New Jersey and is a body corporate and politic established by compact between the states, dated April 30th, 1921, pursuant to chapter 151, Pamph. L. 1921 (R. S. 32:1-1, et seq.; N. J. S. A. 32:1-1, et seq.), and chapter 154 of the Laws of New York, .1921, which compact was ratified by resolution of the Congress of the United States, public resolution No. 17—57th Congress; that among the facilities, bridges and tunnels operated and maintained by the prosecutor as the agent of both states is the Lincoln Tunnel (formerly Mid-Town Tunnel) . For the construction of that tunnel, and the approaches thereto, it was necessary to acquire certain lands in the City of Union City, New Jersey, which have been nsed for that purpose and the lands under consideration here are lands which were so acquired (and part of them used) for such purpose. Indeed certain of the properties in the list of those here assessed were intended when acquired as part of the approaches and right of way to the Lincoln Tunnel. But as the result of modification in design, made subsequent to their purchase, they were not so incorporated. Some of the lots acquired by the prosecutor were only in part used for tunnel approach purposes and the remainder of those lots was of course not so used because not needed; the prosecutor, however, deeming it more economical, purchased such lots, &c., in their entirety in preference to acquiring them in part and paying compensation for damages to the remainder. All of this is conceded.

Chapter 4, Pamph. L. 1931; R. S. 32:1-131 (there was identical legislation enacted in the State of New York) provided, among other things, that the Port Authority be regarded as performing an essential government function in undertaking the construction, maintenance and operation of bridges, tunnels, &c., in the Port of New York district, and shall be required to pay no taxes or assessments upon any of the property acquired or used by it for such purposes. The statute r.eads as follows:

“The construction, maintenance and operation of vehicular bridges and tunnels within the said Port of New York District (including the said Holland tunnel and the said MidTown Hudson tunnel), are and will be in all respects for the benefit of the people of the States o'f New York and New Jersey for the increase of their commerce and prosperity and for the improvement of their health and living conditions; and the port authority shall be regarded as performing an essential governmental function in undertaking the construction, maintenance and operation thereof and in carrying out the provisions of law relating thereto, and shall be required to pay no taxes or assessments upon any of the property acquired or used by it for such purposes.”

No reason is advanced why this statute is not controlling and we perceive none. The assessments will therefore be canceled, with costs.


author: John J. Stahl, Deputy Commissioner.

text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    ADELEE E. MILLER, PETITIONER, v. CHARLES F. GUYON, INC., RESPONDENT.
    Decided May 20, 1941.
    For the petitioner, Nathan Babinowitz and Ernest Tischler.

    For the respondent, Stanley V. Phares.

   *******

The only issue, * * * was whether the petitioner was a dependent and entitled to compensation for the death of the said Mathew Miller.

The petitioner, Adelee E. Miller, testified at length and from her testimony there seems to be little doubt but what she was married to the deceased on March 26th, 1926, in Yew York City. They lived together as man and wife at various places in and around the City of Passaic. Apparently this continued up until June of 1930. At that time various arguments relative to financial conditions and domestic conditions terminated in physical violence being rendered to the petitioner by her husband. After this argument the deceased left the petitioner and never lived with her again after that date.

Subsequent to this time the petitioner lived at various places and obtained domestic work and she testified that she would see her husband once in a while, and that on occasion she would try to persuade him to come back, but the deceased never offered to take her back to live with him. She testified that she, at one time, consulted a lawyer to get some support from her husband, but nothing resulted from this effort. The petitioner testified that the deceased would give her a little money occasionally when she would see him. She said that he, during this time, did not really support her but occasionally he would give her something to help her out. The petitioner testified that the last time she spoke to her husband about trying to get him to make up and resume their home life was in 1934. The petitioner testified on cross-examination that the last time she saw her husband alive was in 1936, and at that time she did not ask him to return and live with her. It was stipulated that the deceased died on November 19th, 1938.

The petitioner testified that she went to Eoehester in the latter part of 1937 and stayed there until the latter part of 1939, when she moved to Virginia. The petitioner admitted that when she went to live in Eoehester, New York, she lived with another man by the name of Eev. Christopher Leath, and that she and the Eeverend held themselves out to be husband and wife .in that community and in the church where the Eeverend was officiating. All the members of the church knew them as husband and wife and this situation continued up to the latter part of 1939 when they moved to Virginia together, and that all the members of the church in Virginia know them as Mr. and Mrs. Leath, and the petitioner admits having lived with the Eev. Leath since the later part of 1937 as husband and wife, both in Eoehester and in Virginia. Apparently the only support the petitioner ever received from the deceased after their quarrel was a dollar or two occasionally when the petitioner would meet him on the street and ask him for money, and the last time that he gave her any money was in 1934.

Having carefully considered the petitioner’s testimony I 'cannot concede to counsel’s argument that, despite her own wrongdoing she is a lawful dependent of the deceased and therefore entitled to compensation. I have in mind the case of Alexander v. Cunningham Roofing Co., 124 N. J. L. 390; 11 Atl. Rep. (2d) 41, but I feel that the facts in the present case go far beyond those of the Alexander case. In the Alexander case certain prerequisites were laid down for a widow to meet before she is entitled to compensation, if, at the time of her husband’s death, she was separated from him. One of these prerequisites is that the widow diligently seek to force her husband to support her, and another is that she remain in fact dependent upon him and not assert her independence. In the present case I do not feel that the petitioner has met either of these prerequisites. From her testimony I cannot find that she, at any time, strenuously sought support from her deceased husband after he left her in 1930. She was working and evidently never asked him for money except when she would happen to meet him on the street, and although her testimony is that at one time she consulted a lawyer, so far as I can gather from the testimony she went no further than this. In the second place, I feel that by her conduct she has clearly and unequivocably evidenced her independence of her husband. I cannot conceive of any other acts that would more definitely show an intention of independence than the act of living with another man. This relationship evidently started in 1937, before the husband’s death, and continued up to the present time. Therefore, I feel that at the time of the deceased’s death the petitioner was not, in fact or in law, a dependent of her husband. In addition, thereto, the testimony clearly indicates that since 1937 the petitioner and the Rev. Christopher Loath considered and held themselves out as husband and wife. There was evidently no ceremonial marriage in this ease and the only thing that would prevent the existence of a common law marriage would be a statutory ban or the continued good health of the first spouse. I understand that Lew York State by statute has abolished common law marriages, and if such were so, then, of course, the petitioner, bv living with this other man as husband and wife in Rochester could not have contracted a common law marriage there, despite the fact that her husband died in Yovember of 1938. However, it seems clear to me that she had the clear intention of being the Rev. Christopher Leatb’s wife, and holding herself out as same, and that when they moved to Virginia, the common law marriage having no impediment in its way, then ripened into being in law. Therefore, it would seem that if the petitioner was a dependent at the time of her husband’s death the dependency would no sooner come into being than 'it would be defeated by re-marriage.

However, regardless of the question as to whether a common law marriage existed in this case, I do not feel from the testimony and evidence produced before me that the petitioner was, at the time of her husband’s death, a dependent either in fact or in law, and I therefore am forced to dismiss the petition filed.

John J. Stahl, Deputy Commissioner.


text:
    State Board of Tax Appeals.
    THE CENTRAL RAILROAD OF NEW JERSEY, LEHIGH VALLEY RAILROAD COMPANY, DELAWARE, LACKAWANNA AND WESTERN RAILROAD COMPANY, ERIE RAILROAD COMPANY AND THE TRUSTEES OF ITS PROPERTY, NEW YORK CENTRAL RAILROAD COMPANY, NEW YORK, SUSQUEHANNA AND WESTERN RAILROAD COMPANY AND THE TRUSTEES OF ITS PROPERTY, READING COMPANY, NEW YORK AND LONG BRANCH RAILROAD COMPANY, NEW JERSEY AND NEW YORK RAILROAD COMPANY AND THE TRUSTEES OF ITS PROPERTY, PETITIONERS, v. J. H. THAYER MARTIN, STATE TAX COMMISSIONER, RESPONDENT.
    Decided May 13, 1941.

      For the petitioners, Maximilian M. Stallman and Robert J. Bain.

    For the respondents, David T. Wilentz, Attorney-General, Duane E. Minard and Charles V. Webb, Jr.

   Quinn, President.

The appeals represented in the foregoing caption are brought on behalf of the railroad systems named, -and of the separately assessed individual companies, aggregating sixty-six in number, which they operate through stock control, lease, or otherwise. The assessments sought to be reviewed were made by respondent upon the railroad properties operated in this state by those systems, for the tax years 1937 and 1938, determined as of the assessing dates fixed in the controlling statutes, January 1st, 1936, and January 1st, 1937, respectively. Pamph. L. 1888, ch. 208, as supplemented and amended (R. S. 54:19-1, et seq.; N. J. S. A. 54:19-1, et seq., through R. S. 54:29-7; N. J. S. A. 54:29-7).

The major contentions of the railroads are, (1) that the valuations and assessments were made arbitrarily and are greatly in excess of the true value of the properties, and therefore are in violation of the constitution and laws of New Jersey (which provide that property shall be assessed for taxes according to its true value), and deprive the companies of their property without due process of law, in violation of the Fourteenth Amendment of the Constitution of the. United States; and (2) that the valuations and assessments were made at a relatively higher ratio to the true values of the properties of the companies than the ratio to true value at which the properties of other taxpayers generally throughout the state' were assessed for taxes for the same years, and therefore that the assessments of the companies’ properties are in violation of article IV, section VII, paragraph 12 of the Constitution of New Jersey, which provides that property shall be assessed for taxes under general laws and by uniform rules according to its true value, and deny the companies the equal protection of the law, in violation of the Fourteenth Amendment of the Constitution of the United States.

Subsidiary questions are raised with respect to the validity of certain practices of the State Tax Department in the mechanics of valuation, primarily as to the following: (a) the determination of the value of land in railroad use by the criterion of the value of adjacent lands not used for railroad purposes; (b) in determining the value of lands by first fixing their value as ordinary lands not fitted or conditioned for railroad use, and then adding thereto elements of cost involved in such conditioning, such as grading, clearing, erection of retaining walls, &c.; (c) in valuing and assessing as railroad property structures designed to protect the traveling public at grade crossings, such as overhead bridges, abutments, gates and signs; (d) the valuation and assessment, as against the Delaware, Lackawanna and Western Eailroad Company, of active floating equipment of that company, claimed by it not to have a situs for taxation in this state.

Although the statutory scheme for the assessment of railroad property in this state has been the subject of frequent exposition in prior judicial opinions disposing of appeals for prior years by these companies in both the state and federal courts, as well as by this board, it becomes advisable briefly to review the relevant statutes, in view of the contention here urged by the railroads to the effect that the essential issues are not concluded by earlier adjudications, because of the presentation of expert testimony in these eases as to railroad true value, and as to the correct method for its determination.

Under section 3 of the act (Pamph. L. 1888, ch. 208, p. 270; Comp. Stat., p. 5264; R. S. 54:22-1; N. J. S. A. 54:22-1) the State Tax Commissioner is directed to ascertain the true value of all property used for railroad purposes, including franchises. No specific directions are provided by the statute as guiding criteria for use by the commissioner in arriving at such true value, but he is directed expressly to ascertain:

I. The length and value of the main stem of each railroad.

II. The value of the other real estate used for railroad purposes in each taxing district, including the roadbed (other than main stem) waterways, reservoirs, tracks, buildings, water tanks, waterworks, riparian rights, docks, wharves and piers, and all other real estate, except lands not used for railroad purposes.

III. The value of all the tangible personal property of each railroad.

IV. The value of the remaining property, including the franchise.

The commissioner is further directed to serve upon each company a statement of the assessed valuation of the property of such company in the state, and of the separate valuation of the property of such company in each taxing district.

' To aid him in performing his statutory function of fixing the true values of the four classes of property created by the act, the roads are required, annually, to make returns of statements or schedules, showing:

(a) The real estate, specifying its extent and dimensions, setting out in detail the total length of the road including branch and leased lines, the entire length in this state, and the length of double or side tracks, designating the length and value of the main stem of each railroad, and of the waterway of each canal, and the length of such main stem and waterway in each taxing district, and the width wherever it exceeds one hundred feet, and designating particularly any portion in each taxing district which is not used for railroad purposes and which is locally assessed and taxed, and the value thereof;

(b) The real estate and number, character and value of all buildings and structures in each county and taxing district used for railroad or canal purposes, including the roadbed (other than main stem), waterways, reservoirs, tracks, buildings, water tanks, waterworks, riparian rights, docks, wharves and piers, and being the property referred to in subdivision II of section 54:22-l of this title;

(c) The character and value of all the tangible personal property used by it for railroad and canal purposes;

(d) The amount of capital stock authorized and the number of shares into which such capital stock is divided.

Pamph. L. 1905, ch. 91, § 1 (R. S. 54:23-1; N. J. S. A. 54:23-1).

These statements are required to be made on forms prescribed by the commissioner. Such reports have not been filed by the petitioners for the years in question.

The act provides for a full and detailed procedure for the hearing and review by the commissioner of any complaints by any railroad company with respect to assessments of railroad property made by him, and in the course of such review, it is specifically provided that he “shall be entitled to use his personal knowledge and judgment as to the value of property.” (Underscoring supplied). Pamph. L. 1888, ch. 208, p. 276, § 12, as amended by Pamph. L. 1933, ch. 11, p. 23, § 1, and Pamph. L. 1933, ch. 305, p. 819, § 1.

In the instant cases all of the petitioners availed themselves of the right of preliminary review, and these appeals are from the commissioner’s final determinations.

Although the hearings in these matters resulted in the accumulation of a stenographic record of 4,610 pages of testimony, and the production of some 450 separate exhibits, a careful review of the cases in their entirety elicits one major and decisive issue: Have petitioners overcome the presumption of correctness which must be deemed to attend the valuations made by the State Tax Commissioner, as assessor, particularly in the light of the prior tax litigation maintained by these railroad companies since 1933 ?

The underlying and fundamental complaint of the companies is that the valuations fixed by the commissioner are arrived at in complete disregard, and without any material reflection, of the earning capacities of the railroads as business enterprises. They purport to show that whereas the State Tax Department recognizes that functional depreciation should be taken into account in fixing true value of railroad properties, yet radical decline in both gross revenues and net operating revenues of these petitioners has not found appreciable correlative reaction in the form of reduced assessed valuations of their properties. In support of their views they offer a great mass of statistical material pertaining to the amount and character of their business, both quantitatively and in terms of dollars, for a period of years prior to the tax years in question, and they adduce a priori estimates by two competent utility valuations experts as to what, in their judgment,, those parts of the petitioner railroad systems which are situated in New Jersey would be worth, as between the mythical willing buyer and willing seller, upon the assessing dates.

These witnesses are offered by the railroads as presenting new and hitherto unconsidered evidential material on the subject of true value of New Jersey railroad properties. We have concluded that they are, on the contrary, merely apologists of a different method and theory of railroad valuation. The New Jerse]'- railroad tax statutes, however, illumined by their practical administration at the hands of the State Tax Commissioner, without legislative interference over a period of half a century, vest an authoritative, though not conclusive, status in this peculiar knowledge and judgment in the matter. No such authority can attend the theories of the railroad experts, conceding their eminent qualifications in the scholarship of utility appraisal, for general purposes. These conclusions have been arrived at by us upon a study of the relevent recent tax litigation, an examination of the testimony of the railroad experts as well as that of the commissioner and his chief engineer in charge of railroad assessments, and of the history of railroad operations and revenues, as contrasted with assessments, since 1932. We consider these matters in that order.

The early history of the several railroad tax statutes and of the judicial interpretations of the law has been admirably set out by Professor Harley L. Lutz in his treatise, The Taxation of Railroads in New Jersey (1940, Princeton University Press), pp. 4-42. The details of that history prior to 1933 are not decisive of the immediate issue before us, since the assessments for that year resulted in a decision by the Supreme Court, which, in its completeness and its full responsiveness to the major contentions urged by the railroads in the instant cases, must be our primary guide post. Central Railroad Co. v. Thayer Martin (Supreme Court, 1934), 114 N. J. L. 69; 175 Atl. Rep. 637. Por present purposes, it will suffice to review the earlier development of the law in brief. The fourfold class division of railroad property for assessment purposes found in the present law flows from Famph. L. 1884, ch. 101, as broadly revised by Pamph. L. 1888, ch. 208. The separation of property into classes was sustained as constitutional in State Board of Assessors v. Central Railroad of New Jersey (Court of Errors and Appeals, 1886), 48 N. J. L. 146; 4 Atl. Rep. 578. The delegation by the legislature to an administrative board of the function of selecting methods for the ascertainment of the true value of the separate classes of railroad property was likewise sustained. Later attempts to attack the legislative plan for valuation of railroad property in classes rather than as entire operating units, were similarly repulsed. Central Railroad Co. v. State Board of Assessors (Supreme Court, 1886), 49 N. J. L. 1; 7 Atl. Rep. 306; Central Railroad Co. v. State Board of Assessors (Supreme Court, 1907), 75 N. J. L. 120; 67 Atl. Rep. 672.

Emphasis was early laid upon the legislative reliance upon the personal knowledge and judgment of the assessors. In the decision of the court passing upon the act of 1884, 49 N. J. L. 1, the opinion states:

''* * * it is not to be overlooked that the statute in question expressly declares that these t assessors 'shall be entitled to use their personal knowledge and judgment as to the value of the property/ a capacity with which this court is not endowed by the legislature.”

The personal knowledge and judgment thus referred to became crystallized in an assessing methodology which was based upon a physical appraisal, piecemeal, of each of the separate components entering into the makeup of the property in classes I, II and III, with the earnings factor relegated to a place, along with the value of the bonds and stock of a company, in determining the value of class IV property, the franchise. See Report of Chandler W. Riker, chairman, in Report of the New Jersey Tax Commission, 1905, p. 102. Although the present State Tax Commissioner and his chief engineer in charge of railroad property assessments, testify that functional depreciation is applied as a factor. in the valuation process, and that any sufficiently long continued decline in earning capacity of a railroad should and does enter into a determination of the extent of its functional depreciation, we are satisfied that under the historical practice-of the several state boards of assessment, and of the Tax Department since its establishment in 1931, no great degree of attention has been paid to the earnings factor, so far as classes I, II and III are concerned. This, we think, was so when railroad earnings boomed, as well as during the period of sharp decline from 1926 to 1932. See Report of Charles Hansel, on Revaluation of Railroads and Canals in New Jersey (1911). During the entire period referred to, the legislature has refrained from any interference with the administrative application of the law, other than in the treatment of grade crossing eliminations as an element of cost, by Pamph. L. 1931, ch. 227, referred to hereinbelow.

As .heretofore indicated, the controlling adjudication in these matters is the case of Central Railroad Co. v. Thayer Martin (Supreme Court, 1934), 114 N. J. L. 69; 175 Atl. Rep. 637, in which the court reviewed appeals by all of the railroads of the state, excepting the New York and Long Branch Railroad Company, from assessments upon railroad property made by the State Tax Commissioner for the year 1933. The major contentions of the companies in that case were substantially the same as those here made, i. e., (1) illegality of the method by which the assessments were made; (2) regardless of the method of assessment, the property was assessed in excess of its true value; and (3) that the great mass of real estate taxable under the General Tax Act is. assessed at less than true value, and that properties of railroad companies, being assessed at true value, are thereby discriminated against. After referring to the findings of this board, the court said (at p. 73) :

“The proof is clear that the provisions of the statute have been observed. Mr. Louis Focht, a civil engineer since 1884, has been identified with the branch of the state department in charge of the detail work incident to the making of the assessments since 1898; he is the chief engineer of the division oí railroad valuation and taxes; he was formerly employed by the Lehigh Yalley Eailroad Company of New Jersey for about sixteen years as a division engineer; and ho has walked every foot of railroad in this state. He was called and testified as a witness for the prosecutors and respondents. He said that the method employed in the making of the instant assessments, and herein complained of, is the method that has been employed in this state since 1884. This is the first time that an attack has been centered and directed against it.”

The court further quoted, with approval, from the opinion rendered by this board, as follows (pp. 74, 75) :

“The statute does not prescribe any specific method for determining true value. It is obvious, however, that it contemplates a physical valuation of each class of railroad property. The method of determining true value is left in the discretion and judgment of the State Tax Commissioner.

“The true value of railroad property is not determined solely by cost of acquisition of land, by cost of improvements and personal property, less depreciation, or reproduction cost less depreciation, but is based upon a consideration of many elements, such as the statutory returns made by railroad companies showing the cost and true value of their property as determined by them, a personal examination and investigation of the property, consideration of its physical conditions, usability and location and its proximity to large cities for transportation of freight and passengers and to industrial manufacturing and mining centers, pleasure resorts and ocean and river termini. In valuing structures and tangible personal property, additional elements are frequently considered, namely; cost, or reproduction cost, less depreciation, obsolescence and other elements not reflected in the physical value. All these elements are considered in connection with the railroad as a going concern.

“For the respondents it is strongly urged in substance, that the methods followed and the factors considered, as indicated, are basically, traditionally and legally sound; they are productive of the True value’ of the prosecutors’ properties. This, we, think, is so.”

The court then referred to the assertion that the true value of a railroad should be determined by the market value of its stocks and bonds representing its property, or by its earnings, or by a combination of both, over a period of years, and that the assessments then before the court were erroneous in that they disregarded these factors. The effect of the court’s response to the contention thus urged by the railroads can be fully appreciated only by considering the actual figures reflecting the degree of failure of correlation between trends of earnings and of assessments of the major systems for a period of years prior to the tax year 1933, with which year the court was there concerned. These tables are illustrative:

Delaware, Lackawanna and Western Railroad

GROSS REVENUES N. J. ASSESSMENTS

Calendar Tax Year Amount Year Amount

1924 .....$86,753,529 1926 ...... $73,527,897

1925 ...... 83,659,202 1927 75,468,565

1926 ...... 88,823,202 1928 76,526,743

1927 ...... 84,699,577 1929 77,948,242

1928 ...... 81,138,442 1930 79,497,856

1929 81,743,222 1931 82,137,269

1930 ..... 69,661,490 1932 85,677,586

1931 ...... 58,674,838 1933 85,836,862

Lehigh Valley Railroad

GROSS REVENUES N. J. ASSESSMENTS

Calendar Tax Year Amount Year Amount

1926 ...... $80,453,150 1928 ...... $41,294,624

1927 ...... 74,502,819 1929 41,898,848

1928 ..... 71,935,071 1930 44,765,010

1929 ...... 71,722,735 1931 46,596,877

1930 ...... 60,664,188 1932 46,351,532

1931 ..... 50,024,627 1933 45,694,813

Erie Railroad

GROSS REVENUES N. .J. ASSESSMENTS

Calendar Year Amount Tax Year Amount

1924 $105,042,224 1926 $40,746,423

1925 . 104,252,181 1927 41,989,343

1926 . 110,574,0.19 1928 44,424,109

1927 108,357,165 1929 46,511,317

1928 . 110,091,920 1930 47,269,237

1929 113,610,598 1931 48,507,412

1930 95,372,547 1932 48,410,772

1931 . 79,227,205 1933 49,194,482

Central Railroad oe New Jersey

GROSS REVENUES N. J. ASSESSMENTS

Calendar Y ear Amount Tax Year Amount

1923 $55,478,125 1925 $92,423,194

1924 53,652,580 1926 92,949,912

1925 53,16],021 1927 97,022,887

1926 58,123,744 1928 102,132,397

1927 56,812,453 1929 102,957,694

1928 56,147,270 1930 105,218,047

1929 56,302,198 1931 104,837,338

1930 50,092,802 1932 104,061,272

1931 38,243,100 1933 102,351,077

New York Central Railroad

GROSS REVENUES N. J. ASSESSMENTS

Calendar Y ear Amount Tax Year Amount

1924 $552,156,569 1926 $23,882,604

1925 . 577,647,802 1927 24,833,053

1926 . 597,564,113 1928 26,665,844

1927 . 572,030,511 1929 27,575,331

1928 . 570,169,610 1930 28,801,821

1929 590,008,624 1931 29,811,955

1930 478,918,348 1932 30,057,632

1931 . 382,190,183 1933 30,910,862

Despite the clearly defined issue thus drawn as to the extent to which the Tax Department had disregarded the earnings factor, the court was able to dispose of the showing thus made with these conclusions (p. 78) :

“The board, as stated in its opinion, clearly set forth the method employed and the various factors which it considered in reaching its conclusions. If we are at all concerned with the method or formulas so employed, as long as the sum it declared be due is based on the true value of prosecutors’ properties (Central Railroad Co. v. State Board of Assessors, 49 N. J. L. 1, at p. 8), we are of the opinion that the methods employed and the-factors considered by the board were fairly inclusive; they were sound, fair and reasonable. It appears to us that they truly form, under the proofs herein submitted, a practical, sound, fair and legal basis for the result reached. The practical construction given to the law by the board for nearly half a century on which it reached its conclusions is strong evidence that it is right. It has become the firmly rooted, established and fixed law applicable thereto. It cannot, under these circumstances, be changed by or through the judicial branch of our government. The relief, if any, prosecutors are entitled to have in the premises, must come, if at all, by or through the legislative branch of our government. This we think is the well settled law.”

The court proceeded to cite a number of authorities dealing with the effect of legislative concurrence with a long-continued course of administrative construction of an act, and concluded that the assessments were neither excessive, nor satisfactorily proven to be discriminatory. The assessments made for the year 1933 were accordingly affirmed, and no further review thereof was sought by the railroads.

In due course, appeals were filed with this board by petitioners to review the 1934, 1935 and 1936 assessments, upon substantially the same grounds as those urged in the 1933 case, and as in the present appeals. For each year the. assessments were sustained in ioto, the issues being regarded as dependent upon the legality of the assessing method in use by the State Tax Commissioner, and therefore concluded by the decision of the Supreme Court in the 1933 case. Central Railroad Company of New Jersey et al. v. J. H. Thayer Martin, New Jersey Tax Reports 1934-1939, p. 82 (1934 case); Central Railroad Company of New Jersey et al. v. State Tax Commissioner, Id. p. 231 (1935 case). The judgment in the 1936 case was without opinion.

Kebuffed in the state courts, the petitioners filed their bill of complaint in the United States District Court of New Jersey seeking to enjoin the collection by the state authorities of the claimed excess of the taxes assessed for the years 1934, 1935 and 1936 over what was alleged would be due were the assessments not unconstitutionally excessive. It was charged in those proceedings that the assessments as made were erroneous in principle, excessive, unduly discriminatory and illegal, and that they deprived the companies of their property without due process, contrary to the Fourteenth Amendment.

The federal trial court found no evidence of intentional discrimination by the state against the railroads, but did conclude that the methods of assessment were not productive of true value, that railroad lands were being valued on the same basis as adjacent land not used for railroad purposes, that structures were valued upon the basis of depreciated cost new, and that despite substantial decline in the earnings of the railroads during and preceding' the years in question, there was no showing of any reduction in assessments attributable to this decline. The court concluded that by reason of its findings aforementioned, the assessments were arbitrary, capricious, basically unsound, and so grossly excessive, as to amount to constructive fraud, and that the disregard of earnings in the valuation process was a denial of rights secured by the due process clause of the Fourteenth Amendment. Central Railroad Company of New Jersey et al. v. Martin, 30 Fed. Supp. 41. The court proceeded to enjoin the collection of more than 60% of the taxes due, pending a reassessment for the years contested by the state authorities. The percentage was increased to 70% by a supplemental memorandum.

Upon appeal taken by the state to the Third Circuit Court of Appeals, the decree of the District Court was reversed (C. C. A. 3d, November 27th, 1940). The court held that the only meritorious question presented by the bill was as to whether a violation of the Fourteenth Amendment was shown. After stating that the practice of valuing railroad lands with reference to the value of adjoining lands, and railroad structures upon the basis of depreciated cost, without regard to earnings, did not raise a federal question, the court made this observation, significant as to the issues now before this board:

“We think it clear that these methods of valuation do conform to the New Jersey laws. They have been followed by the taxing authorities of that state for more than fifty years, and, as this court pointed out in Lehigh Valley Railroad Company of New Jersey v. Martin, 100 Fed. Rep. (2d) 1929 (which involved similar taxes of the plaintiffs for the years 1932 and 1933), have received the sanction of the courts of New Jersey and are now firmly imbedded in its laws.’ ”

Eespecting the claim of the railroads that they were denied the equal protection of the laws because of discriminatory assessments against railroad property, that contention was held to have fallen with the finding of the District Court that no discrimination was shown to exist, the court observing, moreover, that even were there discrimination, it would not constitute a violation of the Fourteenth Amendment, because of the separate classification of railroad property under the New Jersey laws. The contention of the plaintiffs to the effect that there resulted, in consequence of the failure of the state assessors to give effect to declining earnings, an assessment so grossly excessive as to be unconstitutional, was rejected by the court upon the authority of Nashville, C. and St. L. Railway v. Browning (1940), 310 U. S. 362. There the United'States Supreme Court held that mere overassessment or overvaluation by a state of railroad property did not offend the Fourteenth Amendment, if, as stated by Mr. Justice Frankfurter, “the needs of a state require higher taxes” (p. 370).

The Third Circuit finally considered the contention of the state to the effect that- the same issues presented in the case before the court had been adjudicated by the New Jersey Supreme Court in the 1933 case, hereinabove discussed at length, and that the questions of legality and constitutionality of method of assessment were res judicata. The court concluded that the plea of res judicata should have been sustained, in that the parties and issues were the same in each case.

The railroads contend that in these cases, this hoard is free to undertake a new approach to the question of a proper and legal method of determining the true value of railroad property, regardless of the adjudications of the courts referred to hereinabove (except the decision of the Third Circuit, entered after the filing of briefs herein), for the asserted reason that testimony was not introduced by the companies before the court, dealing with the method of valuing railroad property, whereas it is claimed that such testimony was offered in this ease. It is asserted that the doctrine of res judicata is therefore not applicable, and the further implication in the argument is that the former decisions are'not authoritative precedents. The testimony thus referred to as having been introduced in the pending eases, was that of the two valuation engineers, Messrs. Burpee and Merriman.

The essential basis of the valuation methods which these witnesses espoused as calculated to result in a fixing of the true value of the railroad properties in New Jersey, was that of determining the value of the respective systems as entireties, primarily upon a capitalization of their earnings and a valuation of their stocks and bonds, averaged over fixed periods of time in both cases, and then of allocating a value to the New Jersey portion of the whole, upon the basis of a formula of composite factors of varying weight, such as proportions of all track miles, relative investment according to Interstate Commerce Commission records, relative car miles, passenger miles and ton miles, and proportionate operating revenue, (See Burpee, record, pages 2808 et seq.; Merriman, record, pages 2992 et seq.)

We think it requires no extended analysis of the testimony of these witnesses to demonstrate that what they offer is not evidentiary material hearing upon true value, but proposals of methodology in valuation from the standpoint of principle. In the light of the cases hereinabove referred to, which settles as authoritative under the statutes of this state the methodology adopted historically by the State Tax Department and applied for the years here in question, the offer of such testimony does not avail to circumvent the application of the rule of res judicata in these cases. The issues presented are substantially the same as those raised by the same petitioners in all of the cases since the appeals of the 1933 taxes. If what is here offered through these witnesses be regarded as indeed constituting new evidentiary matter, the application of res judicata is nonetheless indicated, the rule being that where the issue' is the same as in the prior litigation ■ (i. e., the. propriety of the methods of assessment employed by the State Tax Commissioner under the. laws of the state), the parties are concluded as respects any proof or matter which might have been presented in support of the issue concluded. Grubb v. Public Utilities Commission, 281 U. S. 470, 475; Baltimore S. S. Co. v. Phillips, 274 Id. 316, 319; Southern Railroad Co. v. United States, 183 Id. 519, 528, 533; Bates v. Bodie, 245 Id. 520, 526. As noted above, the Third Circuit Court of Appeals, in passing on the 1934, 1935 and 1936 cases, held the petitioners concluded by the prior proceedings, and particularly by the decision of the Supreme Court of this state in the 1933 case. See supra.

It is to be noted, moreover, that Mr. Burpee did testify before this board on behalf of the major systems in the 1934 case, and in the United States. District Court in the 1934-1936 cases. This expert admitted that his fundamental approach to the questions involved was the same in these eases as in his testimony in the other litigations. (Record, pages 2896, 3032.) Therefore, so far as the attempt of petitioners to escape the doctrine of res judicata is based upon the testimony of Mr. Burpee (and that of Mr. Merriman is of similar claimed effect), it cannot advance past -the barrier of the decision of this board in the 1934 case, which was never appealed by the railroads, or past that of the Third Circuit Court of Appeals, as to federal constitutional issues raised, in the 1934-1936 cases.

Passing from the question of method to' that of ultimate inquiry, the true value of the railroad properties for the years in question, we must conclude that the presumption of correctness attending the assessments as made, Central Railroad Co. v. State Tax Department (Court of Errors and Appeals, 1933), 112 N. J. L. 5, 8; 169 Atl. Rep. 489, has not been overcome by petitioners in this case. We have seen that the method of valuation judicially sanctioned in this state places heavy emphasis upon a physical appraisal and valuation of the tangible properties, in detail. Petitioners’ experts made no careful inspection of the properties in detail. Such physical inspection as was made by Mr. Burpee was admitted by him to have played no part in his valuation results. (Record, pages 3034, 3038.) He further disregarded in its entirety the significance of the separate classifications of property called for by the Railroad Tax Act. He gave no consideration to the question of how his allocated system values could be apportioned to the four separate property classes, the determination of which is mandatory upon the State Tax Commissioner. (Record, page 3114.) The prior experience of petitioners’ witness, Merriman, was limited to the valuation of securities and to the valuation of railroad property by the security method (Record, page 3353.)

We have further seen, hereinabove, that peculiar weight is attached by the statute to the personal judgment and experience of the commissioner in the matter of valuation. In addition to what has been stated elsewhere, the status of his determinations as the assessor of first instance is subject to the observations of the Supreme Court in the recent case of The Colonial Life Insurance Company of America v. State Board of Tax Appeals (March 12th, 1941):

“While it is the undoubted function of this court to revise an inordinate valuation (R. S. 1937, 2:81-8; 54:4-59), due regard must needs be had for the experience of the county and state boards of taxation in matters of appraisement. In passing upon a value fixed by the old state board of equalization of taxes, this court said: ‘The valuation having been adjudged by a statutory tribunal erected for the particular purpose and experienced in such matters, this court will be loth to interfere with its findings on matters of fact * * * unless the evidence is persuasive that injustice has been done.’ ”

The same personnel through which the department has administered the duties of assessment of railroad property in the years giving rise to the several litigations referred to above, and long before, was in charge of the assessments for the years here under appeal, and the method has been fundamentally the same at a.ll times. (Record, page 3753.) Briefly summarized, that method consists of an examination of the statutory returns filed by the railroads, a check-up in the field of the data disclosed, and an independent examination of all of the physical plant. (Record, page 3755.) Upon this basis, primary valuations are arrived at, corrected for physical and functional depreciation. The valuations are separate for each railroad company and are divided into the four statutory classes. While the department regards it as impractical to place great weight upon capitalized earnings or stock and bond values, as not feasible of allocation to the separate statutory classes of railroad property, or, in the case of second class property, among the taxing districts (record, page 3761), it nevertheless does attribute some weight to the factor of earnings as an element influencing the determination of functional depreciation of railroad property. (Record, pages 744, 745.) A consideration of Exhibit B-33, introduced in evidence by the department, disproves the assertion of petitioners' that the assessment process is merely a mechanical addition of new property to the pre-existing inventory, and a deduction therefrom of retired property. It shows that for the seven major systems in the state, whereas there were additions of new railroad equipment of $49,073,371, and retirements of old equipment to the extent of $24,882,701, both being figures for the period 1929-1938, nevertheless there were over-all reductions in valuations during that period aggregating $54,966,507. .

The comparative earnings assessment tables of the years since the 1933 assessment litigation, wherein the Supreme Court sustained the 1933 valuations, clearly establish that the earnings factor does not indicate exeessiveness in the 1937-1938 assessment figures of the major systems, assuming, as we must, the correctness of the 1933 valuations. While there was a sharp drop in revenues from 1931 to 1932 (corresponding to the tax years 1933 and 1934), there was a steady recovery thereafter, and by 1936, almost a full return to the 1931 figures, in most cases. As to the assessment totals, on the other hand, there was a marked decline for all of those systems from 1933 to 1938. The tables follow:

Delaware, Lackawanna and Western Railroad

GROSS REVENUES N. J. ASSESSMENTS

Calendar 7 ear Amount Tax Year Amount

1931 . ... $58,674,838 1933 $85,836,862

193.2 . . . 46,447,856 1934 79,283,766

1933 ..... 43,339,279 1935 77,671,977

1934 . . 44,592,530 1936 74,920,189

1935 .... 44,722,233 1937 72,877,423

1936 49,728,116 1938 71,090,473

Lehigh "Valley Railroad

GROSS REVENUES N. J. ASSESSMENTS

Calendar Year Amount Tax Year Amount

1931 . . $50,024,627 1933 $45,694,813

1932 38,739,138 1934 44,428,521

1933 38,177,450 1935 44,176,732

1934 39,866,526 1936 43,386,018

1935 . 40,641,557 1937 42,668,069

1936 . 49,156,379 1938 42,530,434

Erie Railroad

GROSS REVENUES N. J. ASSESSMENTS

Calendar Year Tax Amount Y ear Amount

1931 . . . $79,227,205 1933 $49,194,482

1932 . . 64,841,762 1934 48,493,831

1933 63,156,702 1935 47,628,175

1934 . . 66,176,076 1936 45,938,958

1935 66,125,406 1937 46,235,536

1936 ..... 73,937,442 1938 45,810,255

Central Railroad op New Jersey

GROSS REVENUES N. J. ASSESSMENTS

Calendar Tear Amount Tax Tear Amount

1931 ...... $38,243,100 1933 .......$102,351,077

1932 ...... 29,467,838 1934 ...... 97,915,002

1933 ...... 26,649,697 1935 ...... 93,821,901

1934 ...... 28,312,687 1936 ...... 87,152,575

1935 ...... 28,859,337 1937 ...... 84,152,575

1936 ...... 31,073,680 1938 ...... 82,022,186

New York Central Railroad

GROSS REVENUES N. J. ASSESSMENTS

Calendar T ear Amount Tax Tear Amount

1931 ......$382,190,183 1933 ...... $30,010,862

1932. ...... 293,636,140 1934 ...... 28,020,641

1933 ...... 283,341,102 1935 ...... 28,110,728

1934 ...... 295,084,881 1936 ..... 25,987,941

1935 ...... 310,192,980 1937 ...... 25,919,135

1936 ...... 361,063,872 1938 ...... 25,705,141

And finally, the moderateness of the 1937 and 1938 figures, assuming the correctness of the 1933 assessments approved by the Supreme Court, is most persuasively established from the mouth of petitioners’ witness Burpee. Questioned as to his estimate of the prospects of future railroad earnings, as of the assessing dates, he testified as follows (record, pages 2,836, 2,837) :

“Q. Well, in your opinion, as a result of your studies, Mr. Burpee, were there any special factors, considerations showing to your mind the value of these railway properties in New Jersey at the close of 1935 and 1936 from which you could determine or base a determination as to their prospective earnings? A. Yes, sir, I believe there was. As to each of the specific properties, there were certain indications, during 1935 and again during 1936 from which, on the basis of which, an opinion could be formed as to possible prospects. Q. And what are they? A. Speaking generally now, because I want to discuss in connection with these railroads, the particular situation indicated for each of the roads; speaking generally, at the end of 1935, there were indications that it was not a remote possibility that the earnings of the railways would reach the levels of 1930. During 1936 production and trade throughout this country increased quite rapidly and car loadings increased, particularly during the latter part of 1936. All of the railways that we are dealing here with showed better car loadings in 1936 than during 1935. Railway security prices also rose, generally, during 1936 * *

Dor the reasons detailed above, we must conclude that the assessments appealed from have been arrived at in a lawful manner and that they are not shown to be excessive. There has been no proof whatever to indicate that they are discriminatory, as charged.

We have now to consider the subsidiary questions argued by counsel for petitioners. Of these the first is the complaint that the Tax Commissioner has unlawfully added extraneous factors of value to the full land values. Specifically, it is charged that in the assessing process for land values, the commissioner first took neighboring land values, and then added thereto elements of cost in fitting the land to railroad use, such as clearing, grading, retaining walls, grade crossing eliminations, &c. It is asserted that the land values first arrived at must be presumed to represent full value, to which nothing can lawfully be added. The contention urged is specious. Railroad land, including main stem, must be valued in the condition in which it is actually held, as is property generally. Trustees of Stevens Institute v. State Board (Supreme Court, 1928), 105 N. J. L. 99; 143 Atl. Rep. 356. Work done on land which fits it for special use, thereby enhancing its value, should certainly be considered in fixing the value of the land. Emerson v. State Board (Supreme Court, 1928), 6 N. J. Mis. R. 326; 141 Atl. Rep. 23. That the commissioner, for his own working purposes, first arrives at unofficial land values, and then revises them in the light of the work done and structures erected thereon to suit the land for railroad use, does not derogate from the soundness of the ultimate result as representing the true value of the land, in his judgment as assessor of first instance.

We are, furthermore, unreceptive to the view that the cost of grade crossing eliminations should not be considered in valuing class .1 property, because required by law for the benefit of the passing public, and not inherently needed for railroad uses. It appears to us that a capital expenditure which must be regarded as essential to a railroad enterprise, in modern times, is the cost of grade crossing eliminations, as well as of anything else which, as. a matter of public policy, the law of the state imposes upon a road as a condition of its continued operation. The making of that expenditure must be considered, pro tanto, as an asset, or as an element of value to the railroad, in the same sense as the cost of erecting passenger stations, signal systems, or the multitude of other facilities which must be provided by a going road, though not directly used for the actual transportation of persons or freight.

A positive indication that the legislative intention is that such grade crossing costs be included as an element of value, if constructed prior to 1929, is found in the enactment by the legislature of Pamph. L. 1931, ch. 227 (R. S. 54:22-2; N. J. S. A. 54:22-2), providing as follows:

“The value of the main stem of each railroad and of the other real estate thereof used for railroad purposes in each taxing district of this state to be ascertained pursuant to subdivisions I and II of section 3 of the act to which this act is a supplement shall be arrived at without including any part of the cost of improvement, relocation, reconstruction, elimination or avoidance of highway grade crossings, including state highways made pursuant to chapter 88 of the laws of 1929, or chapter 101 of the laws of 1930, or pursuant to the provisions of any agreement for any of such purposes with a municipality hereafter made; provided that such exemptions shall apply only to existing main lines or branches.”

The testimony of the tax department representatives is that the grade crossing eliminations referred to by the act are not included as elements of valuation in the 1938 and 1939 assessments. (Record, page 3861.) Had the legislature so intended, it might have easily provided, when enacting the 1931 statute, that all such projects, no matter when constructed, be omitted from consideration in valuation of railroad lands. That it failed to do so, implies a sanction for the practice of the commissioner in considering such structures as were erected prior to those referred to in the act. JExpressio unius est exclusio alterius.

A further specific complaint of the Lackawanna system petitioner is that there has been included in the property assessed to it certain floating equipment plying between the Morris and Essex Railroad terminal at Hoboken and Jersey City, and New York points of dockage. It is contended that the property has no actual situs in New Jersey and is therefore not assessable in this state, the Delaware, Lackawanna and Western Railroad being a foreign, corporation. So far as appears from the record, the permanent base of operations of the equipment, when not in active use, is at the terminal of the railroad in this state. It has for many years past been assessed in this state, and taxes presumably have been paid thereon, without any question as to situs. Ho testimony has been introduced by the railroad which would tend to overcome the normally applicable presumption of the correctness of the action of the State Tax Commissioner in assessing this property in New Jersey for the years 1931 and 1938. There is no proof to the effect that as of and upon the assessing dates, this equipment was not situated in New Jersey. The cases cited by petitioner are not in point, involving property actually shown to have had no situs in the state seeking to tax it (American Mail S. S. Co. v. Crowell (Supreme Court, 1908), 76 N. J. L. 54; 68 Atl. Rep. 752), or assessments against a company which did not own the property in question. West Shore Railroad Co. v. State Board (Supreme Court, 1911), 82 N. J. L. 37; 81 Atl. Rep. 351.

It is agreed by the Central Railroad Company of New Jersey and the State Tax Department that the assessment levied against that company for the year 1931 upon a parcel of land known as Lot 1, Block 64 on the tax map of the taxing district of Dunellen, be canceled and it will be so ordered. As to all of the other assessments brought before us upon these appeals, judgments of affirmance will be entered.


author: Leyden, S. C. C.

text:
    THE CITIZENS NATIONAL BANK OF NETCONG, NEW JERSEY, A BANKING CORPORATION OF THE UNITED STATES OF AMERICA, PLAINTIFF, v. JOHN WILLS, INC., A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT.
    Decided July 1, 1941.
    For the plaintiff, King & Vogt.

    For the defendant, Milford Salny.

   Leyden, S. C. C.

Defendant moves to strike the complaint pursuant, as counsel for defendant says, to rule 56 of the Supreme Court, upon the ground that plaintiff is precluded from bringing the action by virtue of the provisions of N. J. S. A. 2:26-190 and 191, it having failed to set off the claim it now urges in a prior suit between the same parties. See John Wills, Inc., v. The Citizens National Bank of Netcong, New Jersey, 125 N. J. L. 546; 16 Atl. Rep. (2d) 804.

The defendant conceives this motion to be in the nature of a plea in abatement. I do not agree. There is no attack upon the jurisdiction of the court, no showing of disability of the parties, or defects in the complaint or process. In my opinion the motion is addressed to a point of law which should be raised in the answer and be disposed of before, at or after the trial under rule 40 of the Supreme Court.

However, the law of this case has been decided adversely to the present contention of the defendant.

In the prior suit, defendant sued the bank for the balance on deposit, alleging the same to be $2,196.16. The bank denied the correctness of the amount and by way of set-off, alleged in two counts the indebtedness as endorser of the present defendant to the plaintiff bank on two discounted promissory notes aggregating $1,152.87 which were dishonored by non-payment on the due date, July 13th, 1939, and the defendant’s account debited by said sum that day. The bank therefore did exactly what the defendant now claims it should have done in order to protect itself from the effect of N. J. S. A. 2:26-191. Unfortunately the bank erred in the mechanics of the transaction. It debited the defendant’s account before the notices of the non-payment and dishonor of the notes addressed to defendant were deposited in the post office. In this situation the Court of Errors and Appeals determined that until the notices of dishonor were deposited in the mail, the defendant endorser was not liable on the notes, for there was no debt due from defendant to the bank and therefore no set-off, and the bank could not debit the account or set off the notes at the time it attempted so to do. The court thereupon directed a judgment final be entered in favor of Wills, Inc., in the amount of the attempted set-off, viz., $1,152.87, the balance of the deposit having been returned to Wills, Inc., prior to the trial. This judgment has been paid and satisfied.

The present suit was instituted by the bank in its endeavor to collect the amount due on the notes from Wills, Inc. The complaint, in two counts, alleges the discounting of the notes on which defendant was endorser for its use and benefit and the crediting of the amounts thereof to its account; the presentment for payment; the failure to pay; the protest and dishonor, and due notice thereof given to defendant. The complaint sets forth a good cause of action.

Under these circumstances the provisions of N. J. S. A. 2:26-191 do not operate to preclude the bank from pursuing its alleged right to collect the money owing to it by the defendant.

The motion ,is denied, with costs.