29 A.2d 739 | N.J. | 1943
The ultimate question in this case involves the constitutionality of a certain section of our tax statute that has to do with exemption of public property from taxation. This case before us arises on rule to show cause why certiorari
should not be allowed to review a judgment of the State Board of Tax Appeals. The proposed prosecutor of the writ contends that certain real properties owned by it, a public agency, and assessed by the several taxing districts in which the properties lie, are exempt from taxation under the statute. The assessments were approved by the county tax board and on appeal to the State Board of Tax Appeals these judgments were affirmed. The properties, located in four taxing districts in Essex County, are seven in number and are owned by the Essex County Park Commission. The Park Commission, it appears, had invested pension fund money in bond and mortgage on these properties. The several mortgagors defaulted; two of the mortgages were foreclosed and the property purchased by the Commission at the sheriff's sale; in the remaining five cases, the mortgages being in default, the mortgagors conveyed the property to the Commission in consideration of the mortgage debt. The question is whether these properties are validly subject to taxation by the local taxing districts in which they are located. The pertinent statute is N.J.S.A.
The present case, as has been said, comes to us on rule to show cause why certiorari should not be allowed. The question *338 raised is important, affects the public interest, and we think it should be decided. The writ is therefore allowed and, pursuant to stipulation between the parties, to which this court assented, we proceed to examine the ultimate question as though a return had been perfected and reasons for reversal filed.
The prosecutor contends in the main that the quoted statute, particularly the underscored portion thereof, supra, is unconstitutional. For its first point, conceding that the legislature may tax the property of the state or that of its subdivisions, the argument is that intent to tax must be clearly expressed. This may be admitted. Jersey City v. Blum,
One of the reasons advanced in the brief for the invalidity of the statute, supra, is that it is not general, relying onTippett v. McGrath,
A further argument is made that the italicized portion of the statute is unconstitutional because not general in that it does not include every manner of acquiring property, for instance, by gift but is limited to "property bought in for debts or on foreclosure of mortgages * * *." This reasoning is not sound. If it was, no such statute would be immune from challenge if one hypothesis could be conjured up that the legislature had failed to take into account. The question in this case is whether a classification for exemption, based on use to which the exempt property is put, is valid. And we conclude that it is. Regardless of the manner in which property is acquired, it would be taxable, in our view, unless devoted to that public use which the statute recognizes as a basis for exemption.
It is further said that the italicized language is unconstitutional because it necessarily depends on a clause in the section "when located therein" previously held unconstitutional in Jersey City v. Blum, supra, and therefore it must fall. It is true that the Blum case held that part or clause of the section unconstitutional which restricted exemption to instances where the property was situate within the confines of the taxing district. This decision followed the earlier case of Essex County Park Commission v. West Orange, *340
To return: The point is made that the entire section of the statute falls when any of its essential parts are held to be invalid, citing Van Cleef v. Commissioners of New Brunswick,
The final point made by prosecutor is that the lands in question are in fact devoted to public use. Manifestly they are not as we understand the words "public use." Reliance, however, is placed on the case of Essex County Park Commission v. WestOrange,
"It seems to us that the mere fact that lands are owned by a county or other municipality necessarily imports that it is to some extent impressed with a public use. These public corporations are but agencies of the state, and they exercise no other than public functions. Where lands owned by them are used for such a purpose as a courthouse or a recreation park, the public use is of course manifest. But even where *341 not devoted to such a purpose, we think that nevertheless there is a public use. Take the case of lands purchased at a tax sale, or lands bought in under execution issued to enforce payment of a debt due to the public corporation; while such lands are normally held for a temporary purpose and only to secure the payment of moneys due to the public, yet, while thus held, they are in a sense devoted to the public use, as much so as the moneys themselves for whose payment they are held in pledge."
This language, in our view, was obiter dicta as the lands involved in that case had been condemned for park purposes and the court, while refusing to pass on the constitutionality of the act involved, for lack of argument on the point, refers at page 380 to the language used in that act "where used for public purposes" and stated: "It is, of course, necessary to give some force to the quoted words, and they have been held to limit the exemption to property which, in specie, is used for public purposes." City of Perth Amboy v. Barker, Collec.,
The parties should agree upon a proper record to the end that the writ will be allowed, a return made, reasons filed, and there will be a judgment affirming the findings of the State Board of Tax Appeals and a dismissal of the writ of certiorari. *342