Philadelphia & Reading Railway Co. v. Township of Woodbridge

91 N.J.L. 180 | N.J. | 1917

The opinion of the court was delivered by

Gummere, Chief Justice.

The Philadelphia and Reading Railway Company sued out a writ of certiorari to test the validity of a tax assessed, by the taxing authorities of Wood-bridge township, upon certain cross-ties belonging to the company which were, being treated in a creosoting plant located in Woodbridge township, and operated by the Reading Company in conjunction with, the Central Railroad Company of New Jersey. The ties were shipped by the Reading Company to the plant solely for the purpose of treatment, and when cr.eosoted were ■ to- he promptly distributed along the company’s right of way, some of them to he used on that portion of the railroad which is located in this state, and others to bo used outside of the state. The tax was assessed upon the whole mass of ties, without regard to their intended use in the roadbed.

The Supreme Court held that the action of the township authorities in levying this tax was without legal warrant, and ordered it set aside. The township appeals.

Under our system of taxation the property of railroad corporations, personal as well as real, used for railroad purposes within the borders of the state, is not taxable by the authorities of the taxing district in which it is located, but by the state board of taxes and assessments, the tax being levied by this latter body for state uses. Railroad Tax act, Comp. Stat., p. 5260. This is conceded on behalf of the township, but it attempts to justify its action upon the theory that flic property on which it levied the tax was not at that time used for railroad purposes, and, consequently, was taxable by the local, not the state, authorities.

That the ties in question were not actually in use for railroad purposes on the taxing date is apparent from what has already been stated. The primary question, therefore, is what is the scope to he given to the words- “used for railroad purposes” as this phrase appears in section 1 of the Railroad Tax act? That question, however, is no longer an open one. Since the decision by this court in 1892 of the case of United New Jersey Railroad, and Canal Co. v. Jersey City 55 N. J. L. 129, it has been consistently held, whenever the matter has come up for judicial consideration, that property owned by a railroad corporation, which has been acquired and is held for a railroad use to which It is intended to be subjected in the near future, is property used for railroad purposes within the meaning of the Railroad Tax law, although such use has not actually been begun; and, therefore. is taxable under that act, and not under the General 'fax law of the state.

The situation then is this: an undisclosed portion of the property upon which the tax was assessed is not subject to local taxation; and the act of the officers of tybodbridge township in attempting to impose a tax thereon was in violation of the right of the state to- tax the property for state uses. It may be- conceded, for present purposes, that the ties which were intended for use outside the state were subject to taxation by the local authorities, but that fact cannot legalize their action in attempting to impose a tax upon the whole mass of the property. What the local assessors should have done was to have ascertained what proportion of these ties were intended to be used outside of New Jersejq and what proportion within the state, and to levy the local tax accordingly. The fact that this would have been difficult (if such.be the fact) affords no justification for the attempt to interfere with the collection of state revenues by the state board, and to appropriate such revenues to the use of the township.

The only other matter presented by the appellant is one of procedure. Its claim is that the certiorari was improvidently allowed because, by the General Tax laws of the state, a dissatisfied taxpayer must first seek redress by appeal to the state board of equalization of taxes before applying to the courts for relief. We concur in the view expressed, by the Supreme Court'upon this point, viz., that the statutory provisions appealed to were not intended to prevent the Supreme Court from exercising its discretionary power of supervision in limine where no question of valuation is presented, but simply an inquiry into the legality of the tax.

The conclusion which we reach, therefore, is that the judgment of the Supreme Court must be affirmed.

For affirmance — The Chancellor, Chief Justice, Trenchard, Parker, Bergen, Heppenheimer, Williams, JJ. 7.

For reversal — Black, White, JJ. 2.