Opinion ID: 2333373
Heading Depth: 1
Heading Rank: 6

Heading: the factual determination.

Text: The remaining questions involved advanced by Erie relate to the adequacy and validity of the Division's findings of fact and determinations. It is observed that all of the appeals involved herein were consolidated by consent of the parties for hearing in the Division of Tax Appeals and before the railroad panel. It was also stipulated at the initial hearing before the panel that the evidence would be presented together for all these matters, and would be the same throughout except that Weehawken contemplated proving a change in value for the 1953 tax year as to parcel No. 2. It is on this stipulated premise that the Division's findings were rendered, and our determination likewise is controlled thereby. There were four principal expert witnesses. Messrs. William J. Stack and Arthur C. Guterl testified for Erie; Mr. William Robertson, Jr., testified for Hoboken; and Mr. Joseph Rubenstein testified for Weehawken. In addition Erie called five other witnesses and the Director, Division of Taxation, called to testify Mr. Henry L. Fryer, a Division of Taxation appraiser (Chief Engineer and State Supervisor, Engineering and Railroad Tax Bureau, Department of the Treasury) and Mr. Aaron K. Neeld, Deputy Director, Division of Taxation, Department of the Treasury. Commissioner Hull's report constituted a detailed analysis of the proceedings and evidence, replete with findings. Succinctly, many of these findings may be stated as follows: Mr. Stack's testimony was discussed and his valuations of the subject parcels were recited. An express finding was made concerning the factors considered by Mr. Stack, including personal knowledge and inspection, location, physical characteristics, accessibility by water and land, and availability for various uses. It was found that his analyses of sales where improvements existed on the land turned in part on deductions made for valuations of improvements based generally on personal examination and appraisal. It was further found that 12 significant responses and concessions were elicited from this witness which were recited in detail in Commissioner Hull's report. Mr. Guterl's testimony was given comparable exhaustive analysis in Commissioner Hull's report, including findings as to his valuations, seven elements or factors of consideration resorted to by this witness, tabulation of the sales he adverted to and his opinions as to land values per acre represented by these sales (a list of 25 sales), and findings that he made 13 admissions affecting the probative value of his expert testimony. These 13 admissions were recited in detail. Mr. Robertson's testimony was given like detailed analysis by Commissioner Hull, again including findings as to the factors considered by the witness, his valuations for the subject properties and tabulation of the sales adverted to and his opinions as to the value per acre of land signified thereby, 25 sales in all. And findings were made in detail with respect to eight elements on which Mr. Robertson's testimony was weighed. Commissioner Hull's report considered Mr. Rubenstein's testimony in the same manner, making findings as to the factors resorted to by the witness, his opinions as to true value of the subject properties and tabulation of sales resorted to by this witness and his opinions as to value per acre exhibited thereby. Mr. Rubenstein used 15 waterfront transactions and 23 industrial backland transactions. Commissioner Hull's report makes detailed findings as to 11 relevant concessions made by this witness. The report, inter alia, detailed further evidence, introduced in rebuttal by Erie. Included in the analysis were findings that the evidence did not support a conclusion that Luckenbach Terminals, Inc., in its sale of May 3, 1950, took undue advantage of its purchaser, Lever Bros. Co. There was also included an express finding that in a transaction (initiated as condemnation proceedings) between Erie and the United States of America (property taken October 22, 1941, and settlement or closing made April 29, 1947) no part of the $700,000 payment represented interest, a factor relied on by Mr. Stack. Similar analysis of the State's witnesses, Mr. Fryer and Deputy Director Neeld, was made. Findings as to five significant factors in Bureau analysis were made. With respect to Mr. Neeld's testimony it was found, inter alia, that he held that tax history is of basic importance. Premised upon the basic findings made, several of which are hereinbefore mentioned, Commissioner Hull's report turned to ultimate findings and determinations. These included the following: No sales cited by the several experts involved lands in railroad use at the time of the conveyance, no railroad company has purchased Hudson River water front properties for railroad use within the last 30 years, and none of the sales properties cited, standing alone, was suitable for such railroad terminal use as the premises under appeal. The experts' testimony was summarized and it was found that the selection of sales [by the experts] in this instance [that is, as to parcels Nos. 1 and 3], smacks of    partisanship and yet we do not find the opinions of the experts to be useless, but his sales do not substantiate the true value figure of any of the experts. It was found that there is a difference in Hudson County waterfront values as between several areas referred to; and that values diminish north and south of the area generally known as the Exchange Place section of Jersey City. And it was specifically found that land sold by Lehigh Valley Railroad Company to Bay Oil Company on September 16, 1952 at the rate of $800 per acre, was in the remote category, was not comparable to the subject properties and that the price was not indicative of the true value of the lands sold. It was found that a conveyance to Todd Shipbuilding Corporation (August 31, 1948, by Park Ave. Pier Corp.  1.61 acres of upland and 3.45 acres under water) at $300,000 included buildings. In respect to the transaction between the United States of America and Erie hereinbefore adverted to, the finding that the sales price did not include interest was reiterated. Commissioner Hull further stated that real estate experts were justified in concluding that in condemnation cases pressure upon the seller may exist to depress the sale price from true value. Findings were made that the Webb and Knapp interests were overwilling sellers, and that they purchased substantial Hudson County waterfront holdings in 1947 for $7,250,000, and up to 1951 had sold portions thereof for a total of $11,000,000. Other express findings were made as to the status of improvements in relation to sales and as to pressure or influence on various sellers or purchasers. Finally it was found that it was proved that railroads have not been acquiring, but have been disposing of waterfront properties, in recent years, but that this did not point to a conclusion that there was no increase in value of waterfront lands. It was found as a fact from the evidence of comparable sales (which had been disclosed in the report as indicated by the matters hereinbefore discussed) and the Consumers' Price Index received in evidence, that there was a trend upward in Hudson River waterfront values between 1940 and the assessing dates involved in these matters. It was determined that the assessments appealed were insufficient, that the true value of the subject lands was $45,000 per acre as to waterfront parcels Nos. 1 and 3, and $30,000 per acre as to the backland parcel No. 2. Finding as to the alleged increase in value for the 1953 assessment of parcel No. 2, claimed by Weehawken, was expressly omitted, on the ground that that Weehawken appeal was subject to dismissal for adjective reasons. These are salient features of the findings made by the Division. In its brief presented to the court on these consolidated appeals Erie asserted, We do not take issue with all of Commissioner Hull's suggested findings of fact but would discuss the suggested findings which we believe are erroneous for lack of support by credible evidence, conflict with the evidence or opposition to pertinent law. This narrows the review to the questioned items. The pertinent general principles of law are briefly stated. Mathematical calculations in appraisals, though made in the best of faith, can lead to divergent results and should be closely scrutinized. Aetna Life Insurance Co. v. City of Newark, 10 N.J. 99, 106 (1952); Town of Kearny v. Division of Tax Appeals, 137 N.J.L. 634, 636, 637 ( Sup. Ct. 1948), affirmed 1 N.J. 409 (1949). Coordination and evaluation of expert evidence, and its attendant highly technical problems especially in the valuation of railroad property, is often a matter of considerable difficulty. This task has been committed by the Legislature to the Division of Tax Appeals, a body contemplated to bring an informed judgment from specialized experience to the nice balancing and ultimate resolution of the many complex factors involved. Delaware, L. & W.R. Co. v. City of Hoboken, supra (10 N.J., at page 425). With these principles as the compass we turn to Erie's objections. (a) Erie contends that the Division's finding that there was no evidence of railroad sales of lands in use for railroad purposes was erroneous. We find no prejudicial error. Erie adverts to four sales. One of these is shown by the evidence and admitted by Erie to have been of unimproved and unbulkheaded lands, although a part of the general waterfront terminal tract of the New York, Susquehanna & Western R.R. Co. A second was admitted by Erie to be not used for railroad purposes at the time of a first sale in 1938, but Erie claims that at the time of a second (adjacent) sale in 1947, Lackawanna (parent of the vendor) had created a freight station on the upland and had installed a floatbridge on the land under water. Mr. Stack testified it hasn't any land under water, it does not extend to the bulkhead line, but it is a piece of upland adjoining the waterfront, and his testimony demonstrates that the land sold was not available for the type of railroad waterfront terminal use to which the property under appeal was devoted. With respect to the transaction between Erie and the United States of America involved in condemnation proceedings hereinbefore adverted to, there is no doubt that the land was part of Erie's waterfront terminal holdings. It contained a power house, a paint shop, an oilhouse, an office and stateroom, carpenter and machine shop, blacksmith shop, storeroom,    some small buildings, two molasses tanks   , a tie rack   , a timber mooring rack and    some yard utilities. This is predominantly an industrial or commercial category and the finding that the lands were not in use as railroad terminal lands is reasonably related to the evidence. And Erie contends that two sales by Hoboken R.R. Warehouse and Steamship Conn. Co. to Jarka Corporation and to Fifth Street Pier Corporation, respectively, were of lands in use for railroad purposes. The Jarka purchase was of 0.26 acres of land without waterfront. It was property bought in connection with and as part of a very good piece of warehouse waterfront property. The predominant use demonstrated by the evidence was warehousing although tracks serviced the area. The Fifth Street Pier Corporation purchase, of 0.67 acre, was comparable. (b) Erie contends that the Division erred in finding that none of the sales properties cited, standing alone, was suitable for such railroad terminal use as the premises under appeal. This finding is a reasonable inference drawn from the evidence. Erie adverts to two sales. One of these was by Lehigh Valley Railroad Company to Bay Oil Company, ante. As examples of the evidence, Mr. Guterl testified that a portion of this sale had no land access and had very little utility, that it could be used for storing barges or for fishing nets. He did not consider the entire area sold as being an intensive railroad use and testified that it could be true that it was practically abandoned for railroad purposes. It was seven miles south of the subject properties and at the time of the hearing before the Division was being used as a ship repair yard and lumber mill. The other sale adverted to by Erie was by California Hawaiian Sugar Co. to Portland Equipment Co., on December 31, 1951, consisting of 36.39 acres of land improved with a covered pier, bulkhead building and processing buildings, in Edgewater, north of the subject properties. Its principal use was warehousing with some industrial use, although having railroad facilities. (c) Erie contends that the Division erred in not accepting without qualification railroad experts' opinions as to true value, and in holding that the municipal experts were warranted in containing their reference sales to Weehawken and Hoboken. We find no error in this respect. These are matters of inference and evaluation of the experts' opinion testimony in support of which there is ample evidence in the record. (d) Erie asserts that the Division finding that the Black Tom sale was not comparable is erroneous. The evidence, hereinbefore adverted to, i.e., in respect to the Lehigh Valley-Bay Oil Company transaction, ante, reasonably supports the Division's findings in this respect. Further, as to true value, the sale on the evidence has the appearance of a salvage sale and therefore is not truly representative of the actual worth of the land. (e) Erie asserts that the Division erred in finding that interest was not included in the $700,000 condemnation price in the transaction between Erie and the United States of America hereinbefore adverted to. Erie points out that the evidence shows that the price was reached, the claim for interest being waived. This supports the Division's finding. (f) Erie asserts error in the Division's conclusion that the circumstances surrounding the condemnation matter justified an inference that the price was depressed from true value. Curley v. Jersey City, 83 N.J.L. 760, 762 ( E. & A. 1912), supports the Division's appraisal of the facts and expert's opinions. (g) Erie contends that the Division erred in finding that Webb & Knapp were overwilling sellers. This is a matter of inferences, and none of the evidence cited by Erie categorically opposes the finding. This is based on opinion evidence including that of the railroad's expert, Mr. Guterl, who testified that Webb and Knapp purchased land for investment, and Mr. Robertson's (the Hoboken expert's) testimony that Webb and Knapp disposed of most of their holdings and the sales involved herein were made to rid the investment enterprise of ownership problems. This testimony shows the factual situation and Webb and Knapp's financial success (purchase of lands at $7,250,000 in 1947, sale of much of it before 1951 for $11,000,000). (h) Erie contends the Division erred in recognizing the Webb and Knapp transactions as demonstrating an increase in property values. Erie's arguments demonstrate the profits realized by Webb & Knapp but discount them on the basis that their purchase was wholesale and sales were retail. This does not destroy the evidential value, although it may reduce the weight. The facts admitted by Erie justify the Division's findings in this respect. (i) Erie asserts that the Division erred in holding Holland-America was not a coerced purchaser. This relates to 5th and 6th Street Pier sales. Erie admits that no testimony of anyone involved in the sales was adduced. The determination is sound on that basis alone. The balance of Erie's argument relates to the experts' reasons for accepting, rejecting or discounting the sales. In this there is conflict, again supporting the Division's finding that the evidence of coercion was not convincing, i.e., Erie failed in its burden of going forward with proof of coercion to disqualify the sale. Erie asserts comparable contentions as to the Jarka (piers 7 and 8) sales. This is without merit, and in fact the Division found that there was pressure or influence on Jarka. (j) Erie asserts that the Division erred in refusing to infer that the lack of railroad purchases precludes a conclusion of increase in value. This argument lacks merits. The mere non-purchase, or even sales of surplus lands, does not per se show a lack of increase in value. Indeed it seems that the opposite view might be reasonable: that the railroads did not purchase (and did sell) because the lands were increasing in value. (k) Erie's objection to the Division's statement, that the Director did not resort to trends, is specious. Erie asserts the same conclusion in its own argument. And Erie's argument opposing the Division's finding that there has been an upward trend in waterfront values since 1940 is premised on Erie's experts' opinions as to the use of some sales and rejection of other sales as bases for opinions. Thus, taking all the evidence into consideration the Division did not err in relying on the sales and their attendant circumstances, and the municipal experts' opinions, to reach the conclusion expressed. In other respects we have dealt with Erie's specific objections to the findings elsewhere in this opinion, and find them to be without merit. We find that the Division of Tax Appeals made adequate findings of fact to enable us to review the tax assessment matters here involved, and no prejudicial error was committed therein in the respects challenged by Erie. Erie also contends that the Division determinations as to true value, and judgments increasing assessments (and denying decrease in assessments) based thereon are not grounded in substantial competent evidence. We have hereinbefore pointed up the findings in detail and we find in them adequate support for the determinations rendered. Although Erie does not assert lack of evidential support for the major portion of the findings, we have examined all the evidence in relation thereto and have discovered no finding that lacks evidential support although conflicts in evidence exist. The Division's judgments in these respects should be affirmed. Upon the same findings, the determinations and judgments of dismissal of Erie's tax appeals by the Division should be affirmed.