(Commissioners Harrigan, Hoff, Huegol, Sharp and Smith, concurring.) Í Those cases consist of two jointly heard appeals. One is by the trustees of the Central Railroad Company of New Jersey, asking for reductions in the final 1943 assessment of $78,187,344, made by the State Tax Commissioner on all its property in railroad use and praying for certain other relief. The only specific property as to which these petitioners offered any proof consists of lands situated in the cities of Jersey City and Bayonne. The other is an appeal by the City of Jersey City requesting an increase in the 1943 assessment of all of the second class lands and some of the structures of the company located in that taxing district.!, The city also claims that part of the property of the railroad company assessed as main stem or Class I was improperly assessed as such by the State Tax Commissioner, and requests that this Board transfer same to second class. The Attorney-General defends the assessments as made and requests that they be affirmed.
The railroad company has introduced proof both by real estate experts and others.'' Counsel for the trustees contend that the aggregate assessment of Class II lands in Jersey City, in the sum of $21,757,449, for the year 1943, should be reduced to the sum of $6,000,000, and that the assessment of main stem lands in the cities of Jersey City and Bayonne should be reduced from $2,338,293, to the sum of approximately $1,000,000. The City of Jersey City is not interested in the valuation of the main stem properties, but requests an increase in the valuation of Class II lands for the year 1943, to the sum of $37,148,560 and also that the assessment of *408certain structures on the property should he substantially increased^!
This case was tried at great length, approximately four thousand pages of testimony having been taken. Very many exhibits were offered in evidence by the railroad company, the city and the state. Careful consideration has been given to all of the proofs and to the lengthy briefs submitted by counsel. We also have heard oral argument over a period of two days. We have concluded that the appeals both by the railroad company and by the city should be dismissed.
^The property under appeal consists of a large waterfront railroad terminal fronting on the junction of the Hudson River and Hew York Bay. It is situated opposite the tip of the Battery on Manhattan, and has central access to all parts of’Hew York Harbor. Its location is slightly south of the center of the almost continuous string of railroad waterfront terminal lands, which run from the Greenville Terminal of the Pennsylvania Railroad Company on the south, to the West Shore Branch of the Hew York Central Railroad Company in West Hew York, on the north. Practically the only properties on this waterfront not owned by any railroad are certain tracts held by the Hoboken Land & Improvement Co., and other parcels owned by municipal or federal authorities. Por various periods of time up to almost 100 years, the railroad properties have been constantly occupied and used as such. The property under appeal in this case was originally acquired by the Central Railroad Company of Hew Jersey or affiliated interests about 80 years ago, and it has continuously used this terminal location for practically the same purposes as at present, since 1864. Í
While this company, like other railroad companies, has had its economic ups and downs, we are satisfied that the property under appeal has to-day the same high degree of suitability and adaptability for railroad terminal purposes which it always has had, just as the similar nearby properties of other railroad companies along the Hudson River and Hew York Bay.
In the case of Long‘ Dock Co. v. State Board of Assessors, 89 N. J. L. 108; 97 Atl. Rep. 900, 902; affirmed, 90 N. J. L. *409701; 101 Atl. Rep. 367, a nearby similar railroad terminal was described by the court as follows:
“This is a great terminal property opposite New York City, and which, while it is in fact connected with the Long Dock railroad, might be connected with any other railroad now operating from the Jersey side, or that might be organized so to operate. If the Erie Railroad Company should go out of business it could be used for a terminal connecting with all the railroads terminating between Communipaw and Weohawken. Taken by itself it is a great unified tract with deep water in front and railroad communications behind. We think it is idle to argue, as do prosecutor’s experts, that it is to be split into two, or three, or four or more zones, each to be valued separately. Every part of this main tract depends for its value in some measure on every other part. There are tracts of land elsewhere that are worth more when cut up into building lots, and there are also tracts worth more because assembled and peculiarly adaptable to business. This is one of the latter class.”
The evidence offered by the City of Jersey City and by the state in this case shows that the terminal property under appeal, taken as a whole, has a very high measure of availability fox xailxoad purposes, and leads us to conclude that its value for such purposes exceeds that which it might have for average business or industrial purposes. This proof was given not only by real estate experts, but was supported by testimony given by a highly qualified utility valuation engineer, Mr. Van Hook, and a,n outstanding expert in railroad operations, Mr. Mantell, former vice-president of the Erie Railroad Company for many years and in charge of all terminal railroad operations in the Port of New York on behalf of the United States Railroad Administration during the last war. Such evidence is held to be of first importance in valuing property of this character for taxation. Long Dock v. State Board of Assessors, 78 N. J. L. 44; 73 Atl. Rep. 53; affirmed, 79 N. J. L. 604; 80 Atl. Rep. 1135; Long Dock Co. v. State Board of Assessors, 82 N. J. L. 21; 81 Atl. Rep. 568; affirmed, 84 N. J. L. 762; 88 Atl. Rep. 1103; Long Dock Co. v. State Board of Assessors, 89 N. J. L. 108; 97 *410Atl. Rep. 900; affirmed, 90 N. J. L. 701; 101 Atl. Rep. 367; Pennsylvania Railroad Co. v. Jersey City, 98 N. J. L. 283; 119 Atl. Rep. 99; 125 Atl. Rep. 921; United New Jersey Railroad and Canal Co. and other Companies v. State Board of Taxes and Assessments, 100 N. J. L. 131; 125 Atl. Rep. 335; United New Jersey Railroad and Canal Co. and other Companies v. State Board of Taxes and Assessments, 101 N. J. L. 303; 128 Atl. Rep. 427; United New Jersey Railroad and Canal Co. and other Companies v. State Board of Taxes and Assessments, 103 N. J. L. 33; 134 Atl. Rep. 669; Lehigh Valley Railroad Co. v. State Board, 12 N. J. Mis. R. 673; 174 Atl. Rep. 359.
The proof put into this case by the railroad company which purports to show a low value for the property “in railroad use,” does not, in.our opinion, have any materiality on the question of the inherent availability or value of this property for railroad purposes, a consideration which the cases cited above indicate to be an important feature of the valuation for tax purposes, of this bind of property.
The proofs of the petitioner railroad company, in this connection, are along two lines. In the first place, great stress is laid upon the fact that the company went into federal reorganization proceedings in October, 1939. An exhibit purporting to show accounting statistics of the railroad company for a number of years past was introduced through the Assistant Comptroller of the company. These figures were designed to show that the company has barely earned enough to pay its Hew Jersey taxes in past years. We find that the exhibit is grossly misleading in that the figures are contrived in violation of the uniform rules of accounting prescribed by the Interstate Commerce Commission. Those rules are formulated primarily to show “net railway operating income,” which is the figure upon the basis of which the Interstate Commerce Commission determines whether the railroad company is earning an adequate return, for rate fixing purposes. .This is arrived at by deducting from operating revenues all operating expenses, railway tax accruals and joint facility and equipment rentals. The exhibit offered by the Assistant Comptroller noticeably avoids any indication of the net rail*411way operating income of the company for past years. It also improperly, in violation of Interstate Commerce Commission regulations, sets np rentals for leased lines as a charge prior to tax accruals and fails to show the non-operating income of the railroad, which is properly available to meet rents for leased lines and other “fixed charges.”
The Attorney-General, on the other hand, has shown that the “net railway operating income” of the company was $259,144 in the year 1938, $1,943,304 in the year 1939, $1,364,795 in the year 1940, $5,088,050 in the year 1941 and $9,321,852 in the year 1942. The 1942 figure is substantially the same as what the net railway operating income of the company was in the years 1928 and 1929, which are admitted by the assistant land and tax agent of the company to be two of the highest years of earnings in the railroad’s history. The figures contained in the dissenting opinion of the president with respect to the rate of return earned by the railway company are based upon “net income,” which we believe to be improper for this purpose, since it is arrived at after deduction not only of the items referred to above, but also of non-operating charges and expenses, and interest on indebtedness and rentals for leased lines.
The Attorney-General offered, in rebuttal of the line of proof by the railroad company based upon its past financial troubles, the testimony of three outstanding experts in the fields of railroad engineering and váluation, railroad credit, and railroad accounting. These were, respectively, Wendell A. Yan Hook, of the How York firm of Ford, Bacon & Davis, Patrick 33. McGinnis, expert, writer and instructor on the subject of railroad securities, specializing in defaulted issues, and Charles E. Barnes, railroad accountant in the State Tax Department. These experts gave testimony based upon very careful and exhaustive studies of the operations of the Central Bailroad Company of Hew Jersey, supported by exhibits comparing the operational statistics of the company with other comparable railroad companies. These proofs lead to the strong suspicion, if not conviction, that the bankruptcy of the railroad company is due to one or more of the following causes: (a) defective management; (b) insufficient atten*412tion to the development of traffic possibilities; (e) control by the Eeading Company, owner of the majority of the Central Eailroad stock, and indirectly by the Baltimore and Ohio Eailroad Company, principal stockholder of the Eeading; (d) inadequate participation hy the Central in through rates on freight interchanged with the Eeading and the Baltimore and Ohio; (e) unsound proportion of bonded indebtedness and capitalized rentals of leased properties, as contrasted with stock, in total capitalization, resulting in excessive proportion of “fixed charges” against income; (f) inadequate creation of reserves during the prosperous period prior to 1931, coupled with a policy of excessive dividends on stock during the same period.
The factor of control by the Eeading and the B. & 0. Eailroad Companies was corroborated by proof of the fact that the bondholders of the railroad company had petitioned the bankruptcy court to investigate the relationship between the Eeading and the Central, by the fact that the Interstate Commerce Commission, in ratifying the appointment of the trustees of the road, had pointed out that one of the principal problems of the Central was the question of securing fair rate divisions on interchange received from the Eeading, and finally, by the fact that during the course of the hearings in this case, the trustees dismissed all of the principal operational officials of the Central, who were also acting in a similar capacity for the dominant Eeading Company, and displaced them by the appointment of Mr. William Wyer, who testified for the trustees as an expert in the present case, as chief executive officer.
While this Board obviously has neither the time nor the qualifications to make an adequate investigation of the proofs offered by the Attorney-G-eneral as to the matters just discussed, or any finding with respect to the relation between the factors testified to and the financial problems of this railroad company, nevertheless, the mere existence of the possibility of such factors is sufficient reason to discard proofs of the profits and expenses of the Central, under its administration ,by officers of its parent company, the Eeading, as evidence of the value of its terminal lands in Jersey City for *413tax purposes. Holdings to that effect in very similar circumstances were laid down by our courts in West Shore Railroad Co. v. State Board of Assessors, 82 N. J. L. 31 (at p. 40); 81 Atl. Rep. 351; affirmed, 84 N. J. L. 168; 85 Atl. Rep. 826, and New Jersey Junction Railroad Co. v. Hendrickson, 84 N. J. L. 413; 81 Atl. Rep. 68.
It is obvious that properties of other railroad companies, having similar characteristics of location, assemblage and consolidation, and proximity to the tidal waters of Hew York Bay and the Hudson Biver, have been used with apparent profit and success for many generations by other railroad companies. Bor example, the Pennsylvania Bailroad Company owns and operates, as its only links to Hew York Harbor, two great waterfront terminals, one some distance south of the property under appeal, on Hew York Bay, and one a half mile to the north, on the Hudson Biver. The test of value for railroad purposes of property of this character, depends upon a study of “external conditions susceptible of universal application as a legal measure,” and not upon factors which are “special and peculiar to the individual user of the land, proceeding as it were, from within.” Long Dock Co. v. State Board of Assessors, 18 N. J. L. 44 (at p. 53); 13 Atl. Rep. 53, 51; affirmed, 19 N. J. L. 604; 80 Atl. Rep. 1135. This legal test completely disposes of the above described approach taken by the trustees to the valuation problem presented.
The second lino of proof by the railroad company was to establish a contention that its Jersey City terminal lands have a value for railroad purposes of only sixty per cent, of their value for ordinary business purposes, on the ground that forty per cent, of the area is devoted by this railroad to operations which result in an overall loss to the company. The losing operations are the passenger, carfloat and lighter-age traffic. The losses on carfloat and lighterage are coneed ediy due to the “lighterage free” rule, under which shipments from points more than one hundred miles east of tidewater are entitled to transfer across the Hudson Biver and Hew York Bay free of charge. Mr. Wyer, railroad expert, testified that the Central was “stuck” on its lighterage busi*414ness received from its parent, the Eeading Company, expense of handling it being greatly in excess of the compensation allowed the Central therefor by the Eeading. All of the railroads bear this lighterage burden, not the Central alone, and they have all resisted attempts by the State of New Jersey to eliminate the rule, obviously because of other advantages which more than compensate them for the expense of the free lighterage. State of New Jersey v. Baltimore and Ohio Railroad Co. et al., 245 I. C. C. 581 (at p. 589).
Practically all passenger operations of railroad companies generally are conducted at a loss. All roads are required to render this service, as a matter of public necessity, in order to retain their franchise.
The attempt of the railroad petitioner to devalue its terminal property on the above grounds is devoid of any sound basis. Moreover the railroad company has failed to furnish any explanation whatsoever as to how Mr. Wyer’s “segregation study” has any bearing whatever on whether the Jersey City terminal lands are assessed at more than “true value.”
/.The proofs offered by the real estate experts in this case, as usual, vary in the extreme. The assessment of the terminal lands was $21,757,449. The three experts for the railroad companies arrived at valuations of $9,427,829, $9,897,762 and $6,042,232, respectively. The real estate experts for the City of Jersey City arrived at valuations of $37,148,560, $36,181,200 and $33,371,000, respectively. The expert for the state appraises the property at $29,182,900. Each of the experts for the railroad company specifically limits his appraisal to value for industrial and steamship purposes. The experts for the City of Jersey City and for the state take into consideration value for all purposes, including railroad purposes. All of these experts appear to be competent and experienced appraisers of this type of property. An example of the extreme range of difference in viewpoint can be seen in the appraisals by the railroad witness, Thompson, and the Jersey City witness, Coffin, for parcel No. 8, Thompson’s appraisal being $6,000 an acre, and Coffin’s, $85,000 an acre. The assessed valuation of that parcel is $32,400 an acre.
*415The principal point -which counsel for the railroad company seeks to establish is that sales of waterfront property within the last twenty-five years demonstrate a substantial decline in the true value of New York Harbor waterfront property on the New Jersey side. The response by the City of Jersey City is that there have been no sales of property truly comparable with a developed railroad terminal such as the property under appeal; that no railroad properties actually in railroad use have ever been sold on the Hudson Eiver or New York Bay; and that there is a relatively constant level of values for property available for railroad terminal purposes and in railroad use. Both the city and the state contend that the occasional sales of small, isolated tracts of property, and the several abandonments of excess lands by the Central and Lehigh Yalley Railroad Companies on New York Bay, due to an accumulation of unpaid taxes assessed locally against property originally acquired by those companies for expansion purposes, but never actually put to or needed for railroad use, have no bearing on the value of large assembled tracts well suited and actually used for many years for railroad waterfront terminal purposes.
There is much to be said for the points of view both of the railroad company and of the city. It is important to keep in mind the recent decisions o£ the Supreme Court of this state, indicating that great caution must be exercised in accepting any sales or transactions during the depression period as criteria of true value in a normal period or from the standpoint of a reasonably long range viewpoint. See Colonial Life Insurance Co. v. State Board of Tax Appeals, 126 N. J. L. 126 (at p. 129); 18 Atl. Rep. (2d) 625; Plainfield v. State Board of Tax Appeals, 127 N. J. L. 5; 20 Atl. Rep. (2d) 651.
j In our opinion, the correct approach to the valuation question with which we are confronted in this case, is somewhere between the respective arguments offered by the railroad company and by the city. We are strongly impressed by the argument of the Attorney-General, who concedes that there was some decline in the value of Hudson River waterfront property from 1930 to 1940, but contends that the decline *416in the value of property available and in use for railroad terminal purposes, such as that involved in this ease, was “moderate,” from a long range point of view We are satisfied that the State Tax Commissioner has reasonably reflected any decline in the value of this property, by the two successive ten per cent, reductions which he made in the assessments of the waterfront tracts (comprising 93 per cent, of the total assessed valuations of the Jersey City terminal), one in 1936 and the other in 1939.
Many sales were cited by the real estate experts on both sides. The experts for the railroad companies ignored entirely acquisitions by the Pennsylvania Railroad Company to enlarge its main terminal one-half mile from the property under appeal, at prices many times the highest rate of assessed valuation of the Central property. They laid paramount emphasis on a recent sale from Jersey City to the army of 300 acres, of entirely undeveloped lands, mostly under water, on Hew York Bay, sold at $6,000 per acre. This property was taken over by the city for unpaid taxes of its prior owner, Lehigh Valley Eailroad Company, and the sale price to the army was in approximately the amount of the unpaid taxes, exclusive of penalties. A sale under such circumstances does not qualify as anjmtirely satisfactory criterion of the true value of property. See Plainfield v. State Board of Tax Appeals, 127 N. J. L. 5 (at p. 6); 20 Atl. Rep. (2d) 651; City Holding Co. v. State Board of Tax Appeals, 127 N. J. L. 168 (at p. 169); 21 Atl. Rep. (2d) 289. fit is also shown by the testimony of Mr. Pocht and Mr. Mantell that the property sold to the army does not compare with that under appeal from the standpoint of availability of railroad terminal purposes.
We have studied all the sales cited carefully, particularly the army sale mentioned above, and that from Delaware, Lackawanna and Western Railroad Co. to General Foods Co., in Hoboken, in 1938. The latter was obviously a transaction in which the seller was primarily interested in the freight tonnage to be received from a very large industrial plant to be constructed by the purchaser, rather than the sales price. This was corroborated by the testimony of the land and tax *417agent of the Delaware, Lackawanna and Western Railroad Co., Mr. Eastburn, who testified that before his department of the railroad company had anything to do with this transaction, the General Foods Co. was investigated and found to he a satisfactory purchaser by the industrial or traffic department of the railroad company. Moreover, ¿he property sold was a small, isolated tract, of irregular shape, having only two-fifths of its backland width on the waterfront. It has, furthermore, no backland sufficient to permit of its development for railroad terminal purposes, similar to the property under appeal, nor sufficient depth between the physical bulkhead and the pierhead line to permit of development for maximum steamship uses, as contrasted with the situation at Parcel Ho. 1 under appeal, which has both sufficient supporting backland and distance to the pierhead line for either railroad waterfront, or the highest type of steamship development.
All of the sales, however, must be taken with an eye both to the circumstances motivating the seller and purchaser and the possible effect of such motives upon the sales prices, Gurley v. Jersey City, 83 N. J. L. 760; 85 Atl. Rep. 197, and to the physical comparison between the property sold and that under appeal, considering location, shape, size, extent of waterfront, upland, water depth, assemblage and consolidation of lands, and general availability for railroad purposes. For example, we have not taken the Exchange Place terminal acquisitions of the Pennsylvania Railroad Company at their face value, reflecting prices of upwards of $250,000 per acre. The location is more valuable than the subject property, some of the properties contained structixres, and the railroad company was not a willing purchaser. But we cannot ignore these sales entirely, even though they were made some time ago. They represent the only fairly recent recorded purchases by a railroad company of lands to be incorporated into a Hudson River waterfront terminal, f
Because of the utter lack of any sales perfectly applicable in all particulars to the property under appeal, it seems necessary to accord some weight, but in greatly varying degrees, to all of the sales on the Hudson River and Hew York Bay.
*418The Deputy Ftate Tax Commissioner, in charge of railroad tax assessments, Mr. Louis Focht, testified in defense of the assessments. He satisfies us, from the manner of his testimony, both on direct and cross-examination, and upon close questioning by the president of the Board at the hearing, that his assessments are and have been reasonable and sound, and based upon a consideration of all proper factors bearing upon the true value of the property, including sales. Mr. Focht showed a particularly careful examination, on primary review of the 1943 assessments, of all of the sales which have taken place in the vicinity of the property under appeal. It seems to us significant that the two separate reductions of ten per cent, which he put into effect on the waterfront properties in 1936 and in 1939, have not been disturbed since that time, despite the greatly increased use and profitableness of railroad property generally since those dates. It is obvious that if the valuations made in 1939 were not excessive, and we have so held in May, 1942, City of Jersey City v. Thayer Martin, 20 N. J. Mis. R. 283; 26 Atl. Rep. (2d) 733, they should not be considered excessive as of the assessing date for the year 1943. Most of the experts on both sides agree that there was no substantial change in the condition or value of the property between January 1st, 1938, and January 1st, 1942.
We are bound to attach great weight to the point of view of the State Tax Commissioner, since the statute expressly provides that he may use his “personal knowledge and judgment as to the value of any property which he is required to assess, upon original assessment, or upon review thereof.” R. S. 54:29A—67; N. J. S. A. 54:29A-67. Assessments made by him should not be interfered with “except for palpable error.” Central Railroad Co. v. State Board of Assessors, 49 N. J. L. 1 (at p. 9); 7 Atl. Rep. 306; United New Jersey Railroad and Canal Co. v. State Board of Taxes and Assessments, 100 N. J. L. 131 (at p. 136); 125 Atl. Rep. 335; Long Dock Co. v. State Board of Assessors, 86 N. J. L. 592; 92 Atl. Rep. 439.
This Board has for many years past been familiar with the administration of railroad tax assessments under the direction *419of Mr. Boeht, who has done this work since 1898, and we find no basis in the present case, to disagree with what the Supreme Court of this state said concerning him in Central Railroad Co. v. Thayer Martin, 114 N. J. L. 69 (at p. 73); 175 Atl. Rep. 637 (at p. 639), as follows:
“Mr. Louis Boeht, 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 of Railroad Valuations and Taxes. He was formerly employed by the Lehigh Valley Railroad Company of Hew Jersey for about sixteen years as a division engineer. He 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.”
The question arises as to what weight or influence should be attached by the Board, in deciding this ease, to our decision in the 1942 case. Appeal of Pitney et al., 20 N. J. Mis. R. 448; 28 Atl. Rep. (2d) 660. The circumstances under which the 1942 case was heard and decided show that very little weight, if any, can be given to it as a precedent for the valuation issues in this case.
Tlie circumstances in the 1942 case were as as follows: The appeal of the trustees of the Central Railroad Company was the only tax appeal filed by any railroad company questioning property valuations for 1942. It was filed in due course on Juno loth, 1942. As in the present case, there was also a Jersey City appeal for an increase in the valuations. Pursuant to its custom of many years past, the Board did not begin the immediate hearing of the appeal, but set the case down for the fall, 1942, calendar, together with several other railroad franchise appeals.
On July 1st, 1942, the term of office of the then president expired, and the Governor appointed the present president of the Board as his successor. The matter of the appeal of the Central Railroad Company and the appeal for an increase of the valuations of the same second class property by the *420City of Jersey City were put on the calendar for September 15th, 1942. -On that day, the Board fixed Monday, September 21st, 1942, as the date for the commencement of the hearings. The hearings did actually begin on that day, and from thence until November 4th, 1942, when the opinion of the president was submitted to the Board, the hearing and handling of this case was exclusively by the president of the Board.
At the very outset of the hearing, the president announced that he would regard himself as bound by the provisions of section 34 of the Railroad Tax Act, Pamph. L. 1941, p. 785; N. J. S. A. 54-.29A-34, to conclude the hearing of the case on or before October 15th, and the case was heard daily from September 21st to and including October 15th. We have inspected the record of the hearing, and we find that with the exception of part of the afternoon session of October 15th, all of the trial days were taken up by direct or rebuttal proof offered by the petitioners. The Deputy Attorney-General had no time, on October 15th, to do more than offer the testimony of Mr. Focht as to the general methods employed in the assessment of railroad property. The Attorney-General’s deputy was urged by the' president of the Board at the hearing to expedite his examination, so that counsel for the City of Jersey City could put in certain remaining proofs, not yet offered by it, before the close of the day. We are satisfied that the advance notice by the president of the closing of the hearing on October 15th and its actual closing on that day effectively deprived the Attorney-General of the opportunity to offer a full and adequate defense of the assessments challenged by the appeals. It appears, moreover, that it was questionable, as a matter of law, whether the Board was legally foreclosed of the right to continue hearings in the case beyond October 15th, if necessary to the full, fair and reasonable conduct of the hearing, or prevented from taking as much time thereafter as was necessary to enable all of the members of the Board fully and intelligently to weigh the report and recommendations of the president, and form an independent determination as to the soundness thereof. See Grobarz v. Slayton, 130 N. J. L. 597; 33 Atl. *421Rep. (2d) 697; Redcay v. State Board of Education, 128 N. J. L. 281; 25 Atl. Rep. (2d) 632; City of Jersey City v. Hudson County Board of Taxation and Moskovitz, 130 N. J. L. 309; 32 Atl. Rep. (2d) 594.
On November 4th, 1942, at a regular meeting of the Board, the president submitted to the members of the Board a written opinion which he had prepared, disposing of the petitions of appeal by fixing very substantial reductions in the assessed valuations of both second class and main stem property of the Central Railroad Company in the cities of Jersey City and Bayonne. The Board was advised by the president, that, as a matter of law, the Board was required to certify its decision no later than the next day, November 5th, and that it was expeditious that the judgments should be signed that day, November 4th. The members had no choice but to concur in the conclusion of the president that the November 5th date was mandatory. Over 2,000 pages of testimony had been taken, many exhibits were introduced in evidence, and briefs had been fded by the railroad company, the City of Jersey City and by the Attorney-General. It was impossible for any of the members of the Board on November 4th or 5th to read the testimony and briefs and to examine the exhibits so as to form an independent judgment whether the conclusions and recommendations of the president as stated in his opinion were justified.
The situation with respect to the present case is entirely different. The hearings began on May 19th, 1943, and concluded in July. At the suggestion of the president, each of the members of the Board has read in full all of the testimony taken in the current case. Each of the members of the Board, furthermore, has been furnished with and has examined carefully, briefs of counsel aggregating almost 400 pages. The full Board has heard oral argument over a period of two days.
A considerable amount of important proof, including support of the assessments by real estate and other experts, was offered by the Attorney-General in the present case, none of which apparently the Attorney-General had opportunity of adducing in the 1942 case. The Board now has a thorough *422insight into the tax history of this property and has had an opportunity to make a full examination of all of the various sales testified to as well as the other evidence hearing on the question of the true value of these properties. Each annual assessment for taxation is a separate and distinct thing. United New Jersey Railroad and Canal Co. v. State Board of Taxes and Assessments, 103 N. J. L. 33; 134 Atl. Rep. 669. We have concluded that our determination of the present case should in no way he influenced by the action ofjthe Board in the 1942 case.
\lt is our conclusion, after a careful consideration of all of the proofs, the opinions of the witnesses, the sales of property, and of the tax history of the property under appeal, that the assessments of second class lands for the year 1943 should not be disturbed, and they are therefore affirmed.”'}
With respect to the appeal of the railroad company on main stem, our conclusion is again that the assessments made by the State Tax Commissioner should be affirmed. The railroad company offered the testimony of two real estate experts to support its claim for a reduction in the assessed value of these properties. But it is clear that the approach taken by the experts is erroneous, and can be given little, if any, weight at all. These experts conceded that their appraisals were made in entire disregard of the usefulness or use of the lands in the main stem for railroad purposes. They said that they had taken each individual parcel of main stem assessed, and considered only what it would bring on the open market if the railroad discontinued operations, removed the tracks, and sought to market the property for general industrial or commercial purposes. The main stem is the right-of-way of the railroad.- Some of it is in deep cuts, and some on fills of varying levels above the surrounding grade of land. Each of these separately assessed tracts of main stem land would be worth very little in its present condition for purposes other than that of a going railroad company. It is true that the property must be assessed in its actual physical condition, as held by the owner. Stevens Institute v. State Board of Taxes and Assessments, 105 N. J. L. 99; 143 Atl. Rep. 356. At the same time, if the property has an obvious value for a *423particular purpose, such as for the right-of-way of a going railroad company, that factor of value may not arbitrarily be disregarded by the assessor. This is well established. Central Railroad Co. v. State Board of Assessors, 49 N. J. L. 1 (at p. 5); 7 Atl. Rep. 306. See, also, Central Railroad Co. v. Thayer Martin, 114 N. J. L. 69 (at p. 75); 175 Atl. Rep. 637.
The state has introduced the testimony of real estate experts who appraised the main stem lands under appeal at considerably in excess of the assessment. We note also that the State Tax Commissioner has heretofore voluntarily made very substantial reductions of the main stem lands, particularly in the ease of the Newark and New York branch, where the valuations have been reduced by the Commissioner approximately fifty per cent., between 1938 and 19*42. Our conclusion is that there is no showing warranting any reduction in the 1943 assessed value of main stem lands and the assessments thereof will be affirmed.
With respect to the appeal by the City of Jersey City on structures, the proofs offered are based exclusively upon asserted reproduction cost minus depreciation, as of the assessing date, and are not shown to be connected with any proof of the true or market value of these structures as of the assessing date. While reproduction cost minus depreciation may be some evidence of trae value, under certain circumstances, we agree with counsel for the railroad company that the very high costs for material and labor which existed on the assessing date do not Justify a conclusion that the assessed value of these structures was too low. Central Railroad Co. v. State Board, 49 N. J. L. 1 (at p. 5); 7 Atl. Rep. 306, and Turnley v. City of Elizabeth, 76 N. J. L. 42; 68 Atl. Rep. 1094. It is also apparent that full weight cannot be given to the conclusions of the city witness on structures, as he has almost entirely disregarded the factor of obsolescence. Most of these structures have been assessed at the same figure without depreciation for a number of years past by the State Tax Commissioner. We are unable to conclude, from the proof offered by the city, that the assessments are at less than the true value of these structures on the assessing date.
*424A claim has been made by the railroad company with respect to the assessment as part of the main stem of certain overhead highway bridges on the ground that such property is not used for railroad purposes. If this contention were sustained, the property would then become assessable locally by the taxing districts instead of hy the state. We have reconsidered our holding in the Appeal of Pitney et al., 20 N. J. Mis. R. 448; 28 Atl. Rep. (2d) 660, the 1942 appeal by the same railroad petitioner. On the recommendation of the president, we held in that case that these bridges are not property used for railroad purposes and were therefore not taxable by the' state. We are now of the opinion that that ruling was in error. The testimony is to the effect that such bridges have always been assessed by the state as property used for railroad purposes. There is a great deal of property of this character throughout the state. When the legislature revised the Railroad Tax Law in 1941, Pamph. L. 1941, ch. 291; N. J. S. A. 54:29A-1, et seq., it failed to make any change whatever in the statutory definition of the various classes of physical railroad property to be assessed by the State Tax Commissioner, and therefore, the long continued practical construction of the law by the State Tax Commissioner to the effect that these bridges are property used for railroad purposes, must be given great weight. Central Railroad Company of New Jersey v. Thayer Martin, 114 N. J. L. 69; 175 Atl. Rep. 637. These bridges are essential to the operation of the railroad. Without them there would be obstructions of the right-of-way, by public streets and highways. The assessment of these bridges as main stem will therefore not be disturbed.
• Claims have also heen made by the railroad company for 'the exemption of the cost of grade crossing eliminations at Elizabethport, Somerville, Perth Amboy and Cranford. We see no reason why the determination of these claims should not be the same in the present case as in the 1942 case, Appeal of Pitney et al., supra. Accordingly, the request for the exemption of grade crossing eliminations will be denied.
Finally, we have before us a contention by the railroad company that the assessment made by the State Tax .Com*425missioner lacks legal validity because of an irregularity in the making of the primary assessment. In order to understand the claim made, it is necessary to review the provisions of the statute concerning the procedure in the making of assessments on railroad property by the State Tax Commissioner.
On or before November 1st in each year, the State Tax Commissioner is required to determine the true value, as of the preceding January 1st, of all property used for railroad purposes, in four statutory classes. No later than December 10th, the Commissioner is required to deliver a detailed statement of his valuations to each taxpayer, and no later than December 15th, lie is directed to certify the value of Class II property in each taxing district to the assessors in such districts in which the property is situated. R. S. 54:29A-17; N. J. S. A. 54:29A—17. Any taxpayer, or the Attorney-General on behalf of the state and of the taxing districts, may file a petition for review of such valuations with the State Tax Commissioner on or before the second Monday of January following. The Commissioner is directed to conduct a hearing, review the valuations complained of, and correct the same as shall appear just, before the 1st day of April. He is also required, before the 1st day of April, to certify to each county hoard of taxation, the value of Class II property situated in each taxing district in the county, as corrected on such review. R. S. 54:29A-18; N. J. S. A. 54:29A-18.
On or before April 10th in each year, the Commissioner is directed to compute the tax and assess the amount thereof to each taxpayer according to his valuations as corrected. R. S. 54:29A—19; N. J. S. A. 54:29A~19. Within ten days thereafter, he is directed to serve a copy of the assessment on the taxpayer. R. S. 54:29A-21; N. J. S. A. 54:29A-21.
The facts pertaining to the making of the 1913 assessment on the property of the Central Eailroad Company of New Jersey, as shown by the proofs in this case, were as follows: The primary valuation was made on November 16th, 1942, in the sum of $70,943,696. As in the ease of assessments of railroad property generally, the detailed work of formulat*426ing and setting up the valuation figures on the property of the petitioners was done by the Eailroad Tax Division of the State Tax Department, under the direction of Mr. Eoeht. Conceiving that he was bound by law to allow in the making of the 1943 assessments the same reductions allowed by this Board in the 1943 appeal of this railroad company, the circumstances of which have been set out fully hereinabove, Mr. Eocht prepared the 1943 primary assessment on that basis without specifically informing the State Tax Commissioner that that had been done. The State Tax Commissioner testified that he was not made aware of this fact until sometime in January, 1943. In the meantime, the Commissioner consulted with Assistant Attorney-General Walsh, who had tried the 1943 case before this Board, as well as with Mr. Eocht, and it was decided by these officials that the Attorney-General should be requested to prosecute a writ of review of the judgment of the Board in the 1943 case. An application for such review, supported by the affidavit of Mr. Eocht, was duly made, and a writ of certiorari was allowed the Attorney-General on January 16th, 1943. Subsequent to the conference of the State Tax Commissioner and the Assistant Attorney-General, the former was made aware, as he testified in the present case, that the primary assessment against the Central Eailroad Company of Hew Jersey for 1943 was based upon the reductions allowed by this Board in the 1943 case. He thereupon wrote to the Attorney-General as follows:
“January 19, 1943.
Hon. David T. Wilentz, Attorney-General, State House, Trenton, Hew Jersey.
Dear Sir:
The primary valuations of property in railroad use of the Central Eailroad Company of Hew Jersey, for 1943 assess-ment purposes, are those valuations fixed by the judgment of the State Board of Tax Appeals in its disposition of the appeal from the 1943 assessment. This procedure has been followed upon the assumption that the judgment of the State *427Board of Tax Appeals was controlling as to valuations not only for 1942, but for 1943 and succeeding years.
The question now arises whether that assumption is correct, or whether instead the valuations for 1943 should represent the judgment of the State Tax Commissioner, unaffected by the referred to judgment of the State Board of Tax Appeals.
It is respectfully requested that you advise me regarding this problem.
Yery respectfully,
(Sig' William D. Kelly. William D. Kelly,
State Tax Commissioner.
S”
The Attorney-General responded as follows:
“January 22, 1943.
Hon. William D. Kelly, State Tax Commissioner, State House, Trenton, Hew Jersey.
My dear Commissioner:
I have your letter of January 19, 1943, regarding the primary valuations assessed for the year 1943 against property in railroad use of the Central Kailroad Company of New Jersey.
In response to your inquiry, it is my advice to you that the judgment of the State Board of Tax Appeals in reducing the 1942 assessments made by you against the property of that company is not controlling upon you in the making of the 1943 valuations, and that you are not only free to make your 1943 valuations in accordance with your judgment as to the value of these properties as of the assessing date for said year, but you are, moreover, under a duty so to do. Bach assessment of property for taxation is a separate entity, distinct from the assessments of the previous or subsequent-years. United New Jersey Railroad and Canal Co. v. State Board of Taxes and Assessments, 101 N. J. L. 303 [128 Atl. Rep. 427]. The judgment of the State Board controls only as to the particular year under review.
*428Moreover, my office has heretofore advised with you concerning the illegality and error in the action of the State Board of Tax Appeals in reducing these valuations and in eliminating certain specific types of property from the assessments, and in consequence thereof it was decided to file certiorari proceedings for the purpose of obtaining a court review of the said actions of the State Board of Tax Appeals. The decision to apply for this review was concurred in by your office and was supported by the affidavit of Mr. Boeht.
A writ of certiorari has actually been allowed the State on my application by Mr. Justice Porter on January 16, 1943, and this proceeding will be vigorously prosecuted to the end that the original valuations made by your department on the property of this company for the year 1942 may be sustained and the ruling of the State Board of Tax Appeals reversed.
I accordingly advise you that in my opinion you should continue to exercise your own judgment as to the making of the valuations in 1943, and in succeeding years, on all railroad property until such time as the courts conclude our certiorari proceedings and thereby advise us as to whether or not the position which has been taken by the State Board of Tax Appeals is correct.
It would be my advice that upon the remaking of the 1943 valuations as dictated by the Commissioner’s judgment the taxpayer be given immediate notice of such action and that an early date be set for hearing any objections which the taxpayer may desire to offer thereto, so that the final assessments for the jrear 1943 against the property of this company may be completed within the time fixed for the making of final 1943 valuations against all of the companies, to wit, on ■or before April 1, 1943.
I should appreciate your courtesy in advising me of any action taken so that my office may be represented at any hearing held and be prepared to defend the legality of the action taken.
Bespeetfully yours,
(Signed) David T. Wilentz. David T. W’ilentz,
Attorney-General.”
*429Thereupon, on February 4th, 1943, the State Tax Commissioner revalued the property of the petitioners, without regard to the State Board judgment in the 1942 ease, at $79,371,391. At the same time, he fixed a date for the hearing of any objections by the taxpayer to the legality of the action taken and for the submission of any testimony bearing upon the propriety of the valuations made, on the merits thereof. In response to the notice thereof, the railroad company appeared by its counsel and tax agent, and offered evidence with respect to the excessiveness of the valuations, and also presented legal argument by way of objection to the making of the corrected primary assessment. Subsequently, the Commissioner disposed of the showing made on behalf of the railroad company by dismissing its legal objections to the correction of the primary assessment, but allowing certain reductions in the valuations, based upon the evidence submitted. As required by the statute, the State Tax Commissioner thereafter made a final valuation and assessment for the year 1943, in the sum of $78,187,344. The railroad petitioner does not claim that this final assessment was not made regularly and within the statutory time.
Contrary to the dissenting opinion which has been filed by the president in this case, the instant petition of appeal to this Board is specifically stated to be “against the valuation, assessment and taxation o£ said property used for railroad purposes in the State of Hew Jersey for the year 1943 as finally determined by the State Tax Commissioner in the amount of $78,187,344 * * i. e., the final assessment, and not, as stated in said dissenting opinion, from the corrected primary assessment of February 4th, 1943, in the sum of $79,371,391.
The State Tax Commissioner testified that his revision of the primary assessment of Hovember 16th, 1942, was based upon the fact that he was in disagreement with the action of the Board in reducing the 1942 valuations and that it would he entirely inconsistent for him to recommend proceedings by the Attorney-General for the reversal thereof in the Supreme Court and nevertheless, at the same time, apply such reductions in the making of the 1943 valuations. Mr. Foeht, moreover, testified in the present hearing and posi*430tively.affirmed his personal disagreement with the soundness of the determinations of the Board in the 1942 case, and reaffirmed his opinion as to the correctness of the 1942 assessment as originally made, as well as of the final assessment for the year 1943.
The question this presented is as to whether the primary valuation, inadvertently signed by the State Tax Commissioner under a mistaken impression as to the contents thereof, is forever barred from correction by the Commissioner or by this Board, upon appeal, unless the Attorney-General files a petition for review thereof with the State Tax Commissioner on or before the second Monday of January, as he may do under the statute. R. S. 54:29A-18; N. J. S. A. 54:29A-18. We find that such is not the law. Taken to its logical conclusion, an acceptance of the argument of the railroad company would lead to the conclusion that there is no valid assessment against the railroad company for the year 1943 whatsoever, thereby resulting in a complete escape of this taxpayer from any taxation for that year. This is for the reason that the original primary assessment, which petitioners claim is the only lawful one, was itself made out of time, the date thereof being November 16th, 1942, while the statutory requirement was that it be made on or before November 1st, 1942.
In our opinion, the question presented is controlled by the provisions of R. S. 54:4-58 and R. S. 54:4^59; N. J. S. A. 54:4-58 and N. J. S. A. 54:4-59. These sections read as follows:
“No tax, assessment or water rate imposed or levied in this state shall be set aside or reversed in any action, suit or proceeding for any irregularity or defect in form or illegality in assessing, laying or levying any such tax, assessment or water rate, or in the proceeding for its collection if the person against whom or the property upon which it is assessed or laid is, in fact, liable to taxation, assessment, or imposition of the water rate, in respect to the purposes for which the tax, assessment or rate is levied, assessed or laid.”
“The court in which any action, suit or proceeding is or shall.be pending to review any such tax, assessment or water *431rate shall amend all irregularities, errors or defects, and may if necessary ascertain and determine the sum for which the person or property was legally liable and by order or decree fix the amount thereof. The sum so fixed shall be the amount of tax, assessment or water rate for which the person or property shall be liable.”
This Board has held that it constitutes a “court” within the meaning of section 54:4r-59. Duke Power Co. v. Hillsborough, 20 N. J. Mis. R. 240; 26 Atl. Rep. (2d) 713 (reversed on another point. Duke Power Co. v. State Board of Tax Appeals, 129 N. J. L. 449; 30 Atl. Rep. (2d) 416).
The purpose of the original act, upon which R. S. 54:4-58 and 54:4-59; N. J. S. A. 54:4-58 and 54:4^59, are based, was stated in the early case of Conover v. Honce, 46 N. J. L. 347, as follows:
“As I read that act, its effect is to destroy, root and branch, the power to defeat such a proceeding except upon a meritorious ground. If the person or the property be not taxable, the processes of appeal and certiorari retain their usual efficacy, but, touching forms and irregularities of procedure, they have been stripped of all force whatever. In fact, the statute, in very terms, declares that such shall be its effect. * * * The expressed purpose of this law, therefore, is to prevent, for the future, the frustration of taxation on the ground of erroneous procedure. * * *”
In Dodge v. Love, 47 N. J. L. 436; 2 Atl. Rep. 810, 811, it was said, as to the same statute:
“The act is remedial and should be liberally construed to embrace within Us scope ail the steps necessarily taken in levying the public revenues. That such was the legislative purpose is manifested by the fact that its operation is expressly extended to the proceedings for the collection as well as for the assessment of taxes. It could not have been intended to exclude the intermediate steps between the initial and final procedure.”
In Saunders v. Morris, 48 N. J. L. 99; 2 Atl. Rep. 666, the Supreme Court held that certain taxes under review had been improperly assessed but nevertheless stated:
“But it does not thence follow that the court should set *432them aside. There is nothing in the state of the case to indicate, nor does the prosecutor assert, that he was not liable to taxation in the district when these taxes were levied, or that they exceed the sums justly assessable against him. Under such circumstances, the general act respecting taxes, assessments and water rents, approved March 23d, 1881 {Pamph. L., p. 194 [N. J. S. A. 54:4-48 to 54:4-60]), prohibits the court from annulling taxes merely because of illegality in the assessment of the same, and make it our duty to see that the complaining taxpayer bears his fair share of the common burden.”
All of the foregoing cases were cited and the rule set forth therein applied by the Court of Errors and Appeals as recently as 1941 in the ease of Ridgewood Elks Holding Corp. v. Ridgewood, 127 N. J. L. 295; 22 Atl. Rep. (2d) 266.
We therefore find that such irregularity as took place in the earlier stages of the making of the assessment under appeal can and should have no influence upon our consideration of the validity and regularity of the final assessment. We further find that the final assessment, to which the appeal of the railroad company is, in terms, directed, was made within the statutory time and under circumstances which have in no way prejudiced the petitioners in the making of a fair and full attack upon the merits of the assessed valuations, in the same manner and with as full freedom as though the assessment of November 16th, 1942, had been in the sum fixed by the revised primary assessment of February 4th, 1943. If the irregularities are deemed to require correction by this Board, then we herewith make such correction, in obedience to the requirements of R. 8. 54:4r-58 and R. 8. 54:4r-59; N. J. S. A. 54:4r-5S and N. J. S. A. 54:4-59, to the end that our conclusions with respect to the merits of these valuations may be made effective.
Detérmination of the questions involved in the appeal of the .City of Jersey City for reclassification of main stem properties will be reserved for later consideration and determination.
Judgments will be entered in accordance with the foregoing conclusions.