Long Dock Co. v. State Board of Assessors

92 A. 439, 86 N.J.L. 592, 1 Gummere 592, 1914 N.J. LEXIS 287

Opinion

The opinion of the court was delivered by

Stvayüe, J.

The Supreme Court held that it would not in settling the question of fair value oppose its judgment to that of an administrative hoard entrusted hv law with the duty of fixing the fair value or market value of land for the purpose of assessing the same for taxes, where there was testimony be fore the board the weight and value of which it was required to determine, to which the members of tlie board might add their individual personal knowledge and judgment. The portion of the opinion thus paraphrased treats the valuation of the state board of assessors as if it were the judgment’of a judicial tribunal, and the Supreme Court a mere appellate tribunal passing upon questions of law only. To leave no doubt that such was the view taken by the court of its functions, the opinion goes on to say that the court cannot supersede the judgment of the board with the court’s own judgment upon a practical question of methods of valuation, unlesé the principle which luis obtained be inherently and legally vicious —an expression which must mean that the principle upon which the state board of assessors proceeded may be inherently vicious and yet cavnot be corrected by the court unless it is also legally vicious. We think the Supreme Court in adopting this view of its functions, and thereupon affirming the assessment, failed to perform the duty which the statute imposed upon it. Section 13 of the act (Comp. Stat., p. 5270, pl. 457) expressly enacts that upon a certiorari of the taxes imposed by the state board, relief may be bad as well in cases where it is claimed that the amount of the tax is excessive or insufficient, as in eases where it .is claimed ihat the principle upon which tire assessment is made is erroneous, and if it shall be made to appear that any assessment is unlawful, excessive or insufficient, the court shall correct the same and reduce or increase it as may be'just, or refer it back to the board of assessors, who shall correct or reassess the same in accordance with the instructions of the court. The act then adds that in any suit or proceeding, except on such certiorari, the certificate of the state board shall be conclusive and have the force and effect of a judgment of a court of record. If this plain language left it at all doubtful that the court was to consider the amount of the assessment as well as the legal principles upon which the board acted, the doubt would be removed by an examination of the state of the law at the time the act was passed, as to review by the court of the amount of fax assessments. Tiie Railroad Tax act was passed in 1884. At that time, the? act of March 26th, 1852 (Gen. Stat., p. 3390), was in force. This act liad been passed immediateiy after the Supreme Court had, in State v. Quaife, 23 N. J. L. 89, laid down the same doctrine as in the opinion now under review. It was no doubt passed to overcome the effect, of that decision. Under the act of 1852, the court reviewed ihe valuation in tax cases and determined disputed questions of' fact when the purpose of the investigation was the affirmance or the reversal, in whole or in part, of the tax imposed. The cases are collected in Royal Manufacturing Co. v. Rahway, 75 Id. 416. Such was the rule as to the review on certiorari of general taxes when the Railroad Tax act was enacted, and we cannot entertain a doubt that the legislature in its desire to avoid any question that the new legislation accorded to the railroad companies the equal protection of the laws, gave them the same right to review by the Supreme Court that was accorded to other taxpayers by the aet of 1852. Our decisions prior to the preserit case arc in accord with this view. In the first ease. Central Railroad Co. v. State Board of Assessors, 49 Id. 1, Chief Justice Beasley, with his usual accuracy, stated the somewhat peculiar situation created by other provisions of the act. He said: “We do not consider that we have the right to alter or annul any of (he proceedings of tins body of officers except for palpable error, for it is not to be overlooked that- the statute in question expressly declares that these assessors shall be entitled to use their personal knowledge and judgment as to the value of properly, a capacity with which this court is not endowed by the legislature.” That the Chief Justice by the expression “palpable error” referred not to mere legal error, but to error in the? valuation, is apparent from the fact that it was the valuation only that he was for the moment discussing; the sentence immediately preceding (lie passage we have quoted is: “We can perceive nothing in the facts before us that would justify us in interfering with valuations of this class.” He was passing upon the facts of the case and not upon the legal principles adopted by the state board. What he held was that the court would not alter the assessment, except for palpable error, which is equivalent to saying that it would do so if palpable error appeared. The exception proves tlie rule. This palpable error did not appear in that case since tlie prosecutors failed to show that the valuation might not be justified by ihe personal knowledge of members of the state board, which the court did hot possess. The recent opinion, cited below, on the valuation of the very property now in question, is in entire accord with Chief Justice Beasley’s opinion. In Long Dock Co. v. State Board of Assessors, 82 Id. 21, Mr. Justice Garrison, after saying that there was testimony supporting the valuation of the state board 9nd testimony opposed thereto, added: “We are unable to say that the latter testimony so preponderates as to overcome the judgment of the board, and the testimony that supports it, as to make it our clear duty to substitute our judgment for that of the state board upon a question of value.” To make it still more clear that he ivas dealing only with the weight of evidence, he continued: “If it were a question of law, our opinion might be of more worth than that of an administrative hoard, but upon a question of value, the presumption is rather the other way.” This was a recognition of the duty of the court to consider tlie facts as to valuation in accordance with the statutory direction; the court was very far from limiting its function tc a consideration of the legal principles on which the board had acted. In both cases the court dealt with the weight of evidence on tlie question of valuation, properly requiring that the evidence should preponderate against the valuation of the state hoard before it was set aside. Wc are not without precedent in this court. The question is Hie same that arises under the G-eneral Tax act; we have held that it is the duty of the Supreme Court under that act to reweigh the evidence and amend the assessment when satisfied that the valuation of the taxable property for' which the taxpayer is assessed is erroneous. Millville Gaslight Co. v. Millville, 84 Id. 409. In1 The pending case the opinion makes it dear that the court did not reweigh the evidence but limited itself to a review of the legal principles on which tire state board had acted. But on that narrow ground, also, there was error. It is well recognized and on the plainest principles-of justice that the judgment, even of a court, is legally erroneous if there is no evidence to support it, since without evidence the judgment is no better than an arbitrary edict. In the present ease, the state hoard added twenty per cent., amounting in the aggregate to nearly or quite a million dollars to the valuations on which the experts on both sides were in substantial accord. There was no evidence to support this addition since the court did not even assume that members of the board possessed knowledge not possessed by the experts, but spoke only of considerations “probably within the personal knowledge of the assessors,” a probability that was at best conjectural since the assessors refused to disclose whether or not they had any means of knowledge or familiarity with the property they were valuing. The question of the value of railroad property is a, highly technical one for experts, and the state had, in 1909, for the information of the people of the state and the state board of assessors, as the preamble of the resolution dec-lares, employed such experts. There was no presumption in the mind of the legislature that members of the board would know more than the experts and the court ought not to assume such to be the fact withoiit proof. Where there is conflicting evidence, the court may properly refuse to interfere with the decision of the state board who may have decided upon the weight and value of the evidence before iliem in the light of their own knowledge, whatever it may have been, as jurors may and as the statute permits. Such seems to have been the situation in the eases c-ited. The present ease is very different. There is no evidence here to sustain the valuation adopted by the board. All the evidence is for a valuation many hundred thousand dollars lower. In tins situation there is presented the very case of “palpable error” in the valuation to which Chief Justice Beasley referred. If the board was possessed of knowledge justifying the valuation it adopted, that knowledge ivas not brought to the attention of the Supreme Court and does not appear on the record. It is urged that it was the duty of the prosecutors to call upon the hoard to certify to their knowledge. To this there are two answers — first, the prosecutors might well rest content with the evidence as to value, and second, a certificate by the board is not the proper way to ascertain their knowledge. The prosecutors might, rest content since the highest value that is testified to is far below the valuation fixed by the board. A certificate by the board is not the proper way to ascertain their knowledge, because knowledge of values is the individual possession of each member and doubtless differs with each, as is sufficiently shown by remarks made by one member of the board during the colloquy at the hearing. The board as a board ma.y certify its official findings, but not the individual knowledge of each member. That individual knowledge differs in no essential respect from the knowledge of the expert witnesses: it may prove more or less valuable when subjected to the same tests. The knowledge of both alike is a fact to be considered byr the board in making up its judgment. The important distinction is that between evidential facts and facts inferred'therefrom. The mental process by which the board makes its inferences and reaches its conclusions is no more open to inquiry than the processes by which a jury reaches its verdict. (Chicago B. and Q. Ry. Co. v. Babcock, 204 U. S. 585), but the evidential facts on which the finding and judgment of the board rests are as open to inquiry as the facts proved before a jury, and none the less open in the one case than in the other, because those facts are within the knowledge of members of the board alone or in the knowledge of jurymen alone. The distinction is, in effect, the same that was pointed out by all the judges in the house of lords in Duke of Buccleuch v. Metropolitan Board of Works, L. R., 5 H. L. 418; 41 L. J. Exch. 137 It was Lherc held that the umpire was properly examined as a witness to ascertain whether he took into consideration matters not included in the reference and therefore not within his jurisdiction, but that the.operations of his mind in reaching his award were not the proper subject of examination. A quotation from the opinion of Lord Chelmsford clearly expresses the distinction: “To prevent the defendants from questioning him so far, would have been to have deprived them of information to which they were entitled by shutting them off from the only source of it in the breast of the umpire. He alone could tell what subjects he included under the general terms of his award. But this having been ascertained, the defendants were not at liberty to go further and to ask the umpire what were the elements which entered into his consideration in determining the question of compensan on.” The only way to ascertain the knowledge of memoers of the board was either by calling on each to certify individually — a proceeding for which there is, we think, no precedent — or by examining each as a. witness. The case is analogous to eases where jurymen may be examined as witnesses to fac-ts hut are not to he examined as to the mental processes by which they draw inferences from those facts and arrive nt a verdict. There was indeed a time in the history of trial by jury when jurors were allowed to avail themselves of one anothe’-’s knowledge without disclosing it in the open; but that was at a time when the jurors wore still witnesses and not triers. Prof. Thayer deals with the question in Ms Preliminary Treatise, page 168, and an interesting history is to he found in Wigmore, section 1800. In 1650, it was laid down that a juror ought to state publicly in court on oath his information and not give it in private to his companions. Bennett v. Hartford, Style 233, cited in Thayer 174. Blackstone (3 Bl. Com. 375) refers to the same case as having first introduced the rule “which now universally obtains that if a juror knows anything of the matter in issue, he may he sworn as a witness and give his evidence publicly in court.” The rule appears in the very first volume of our reports Anderson v. Barnes, 1 N. J. L. 203, and is enacted in section 158 of the Practice act. Comp. Stat., p. 4103. The same rule applies to a judge. Wigm., §§ 1805, 1909. We see no reason why the members of the state board should be exempt from testifying. Whether the members shall be required to testify to their knowledge under the sanction of an oath and with the usual safeguard of cross-examination depends upon the rules of our law in analogous cases. It is true the members of the state board were neither judges nor jurors. They were acting in a double capacity, first, as assessors who had made an assessment against which a complaint had been made, ana second, as commissioners of appeal sitting to review the assessment upon testimony to be subsequently reviewed by the Supreme Court- As assessors they were in no better position than commissioners of assessment who are examined and cross-examined as to special assessments as a matter of everyday practice. While the state board are neither jurors nor judges, the importance of the comparison lies in the fact that the rule applied since 1650 to jurors, and perhaps for an even longer time'to judges, illustrates the fundamental principle that a hearing in order to comply with the law, must be a hearing at which adverse witnesses may be met and cross-examined. Our law is careful to secure, as Blackstone says, that, evidence of facts shall he given publicly in court. The right to cross-examine witnesses as to facts is of the very essence of civilized judicial procedure,' and there is no rule exempting from cross-examination witnesses who happen to he jurors also. Even judges are not exempt. Wigm.. supra. One of the reasons given for exempting judges'from the obligations of witnesses in their own courts is the difficulty of their presiding at their own cross-examination. This difficulty is not insuperable. If it were, the courts would be subject to the mocking question of Henry the Fourth to one of his judges as to the procedure if the judge were the sole witness of a murder. The legislature has power to provide for the takinc of testimony of witnesses who happen also to be members of the tribunal. It has necessarily done so in this case by making the knowledge of members of the board evidential, and providing for a review by the court of the amount of the tax and the excessiyeness or insufficiency of the assessment. There can he no such review unless all the facts before the board are presented to the court. The legislature has taken pains also to provide for a hearing, for process of subpoena and for the examination of witnesses. Comp. Stat., p. 5270, pl. 456. A hearing must he a real, not a sham, hearing. Central of Georgia Railway v. Wright, 207 U. S. 127; Londoner v. Denver, 210 Id. 373; Interstate Commerce Com. v. Louisville and N. R. Co., 227 Id. 88 ; Erie Railroad Co. v. Paterson, 79 N. J. L. 512. Even in a tax ease, said the court in Londoner v. Denver, a hearing in its very essence demands that he who is entitled to it shall have the right to support his allegations by argument, however brief, and, if need be, by proof, however informal. In order to determine whether there is need of proof on his part, the taxpayer must know what he has to meet. It is not consistent with the methods of judicial tribunals nor of special tribunals seeking to do justice, to give the taxpayer no chance to know what the case made against him may be. In this case, the members must have stated to each other in secret, session their knowledge of the value of this property unless they merely added the twenty per cent, in an arbitrary way — a procedure we cannot impute to them. Such a statement of the individual knowledge of each differs in no essential respect from testimony as to other facts except in its secrecy, in its lacking the sanction of an oath, and its freedom from the safeguard of cross-examination. So open to abuse is such a method, so lacking in the ordinary requirements of a hearing, that we may safely say that no man’s property is safe from confiscation if taxing boards can without evidence and behind closed doors add twenty per cent, to a valuation on which sworn experts on both sides are in substantial, agreement. If twenty per cent, can be added in this way, a •thousand per cent, can be added, and the redress through the open public methods of a judicial tribunal which the legislature has been careful to provide becomes a mere delusion and the legislative intent is frustrated. We cannot sanction acts of a mere administrative board which run counter to the legislative will as expressed in the very statute from which the board derives its powers. If w7e did, those acts might be treated b3r the federal courts as a violation by the state itself of the provisions of the fourteenth amendment. Raymond v. Chicago Traction Co., 207 U. S. 20; Home Tel. and Tel. Co. v. Los Angeles, 227 Id. 278. The observance by the state of its obligations under the federal constitution is in the keeping of the legislature and the courts, not in that of its administrative boards.

In view of the care taken by the legislature to secure a hearing to the railroad companies, we need not deal with the question raised at tlie argument as to the requirements of due process of Jaw under the federal constitution. The state has provided for due process of law. We have not, it is true, adopted in civil as we have in criminal cases, a constitutional guaranty, requiring that a man be confronted with witnesses against him; we have found that the legislature and the courts sufficed to protect the citizen without the constitutional guaranty. We have always had in civil cases what is essential in the right of confrontation, i. e., the right of cross-examination. Wigm., § 139-5. Without this right, a hearing is a sham.

It was suggested iu the colloquy during the effort to take testimony that the practice under the Railroad Tax act from the very beginning had been for members of the board to refuse to give the information here sought. The authority cited is advice given by counsel for the state to a member of the board on the hearing of the original case. Central Railroad Co. v. State Board of Assessors, 48 N. J. L. 1. Wo are not advised whether the inquiry in that case was directed to the method by which the board reached its result or to the knowledge of the individual members. If to the former, the authority is not in point; if to the latter, we can only say that advice of counsel for a litigant to a witness can hardly he treated as authority by a court; however eminent the counsel may be as a lawyer, the attitude and duty of an advocate are very different, and rigidly different, from the attitude and duty of a court.

The judgment must be reversed, and the record remitted to the Supreme Court for further proceedings not inconsistent with this opinion.

For affirmance — Black, J. 1.

For reversal — -The Chancellor, Chief Justice, Sway-ze, Parker, Bergen, Bogert, Vredenluugh, Williams, J J. 8.