Court Opinion

ID: 9630177
Source: CourtListenerOpinion
Date Created: 2023-08-22 10:03:43.309059+00
Date Added: 2024-06-11T18:07:33.135864
License: Public Domain

Heheb, J.
(concurring in remand). However it may be viewed under Art. IY, Sec. VII, par. 12 of the 1844 State Constitution, as amended September 28, 1875, R. S. 54:4^3.20, as interpreted and applied in Schwartz v. Essex County Board of Taxation, 129 N. J. L. 129 (Sup. Ct. 1942), affirmed 130 N. J. L. 177 (E. & A. 1943), would seem to be within the purview of Art. VIII, Sec. I, par. 2 of the 1947 Slate Constitution, providing that exemption from taxation may be granted only by “general laws” and “[ujntil otherwise provided by law all exemptions from taxation validly granted and now in existence shall be continued.” In Schwartz the holding was that the cited “exemption statute applies to all personal property stored in a *515warehouse and it includes all property within the state so situated, omitting none.” Can we say that the framers of the 1947 Constitution had the exemption statute in view, as so interpreted, and that dissent from the policy would have found expression in the new draft of the organic law, embracing as it does a new exemption provision, Art. VIII, Sec. I, par. 2, following consideration of the subject matter in committee and on the floor? Ordinarily, the constitutional sufficiency of legislation is measured by the organic law in force when the act was adopted. Here, the exemptions continued are those “validly granted.” It is not unlikely that the Convention, knowing of the provision, determined not to disturb it by a different or more explicit expression of constitutional policy. At all events, in Maritime Petroleum Corporation v. City of Jersey City, 1 N. J. 287 (1949), this court proceeded on the assumption that such exemptions are constitutionally sound. The equal protection and due process clauses of the Fourteenth Amendment to the Federal Constitution as delineated in Carmichael v. Southern Coal & Coke Co., 301 U. S. 495, 57 S. Ct. 868, 81 L. Ed. 1245 (1937), do not resolve the issue. The basic inquiry here is the essential meaning of the exemption statute.
This court now holds that “[i]f the taxpayer stores its property in a well-established or newly created public warehouse, genuinely operated as such, it is entitled to the benefit of the statutory exemption”; but “* * * if it stores its property in a warehouse created or operated for its own private convenience and not genuinely operated as a public warehouse, then the statutory exemption must be deemed inapplicable for here the statutory objective is not being served and no justifiable basis exists for favoring such personal property as against personal property stored at premises of taxpayers generally.” The majority opinion then refers to Borough of Edgewater v. Connoil Corporation, 4 N. J. Super. 338 (App. Div. 1949); and it is said that “the court [there] distinguished” Maritime Petroleum Corporation v. City of Jersey City, supra, “pointing out that *516there the warehouse company was ‘engaged in the public warehousing business, owned and maintained tanks for the sale of its storage facilities, accepted petroleum products from all who desired to store same/ and ‘issued warehouse receipts therefor/ ” seemingly determinative considerations leading to the ultimate standard and rule of action laid down in the majority opinion here, as stated supra.
But I deem this to be an illusory criterion. B. S. 54: 4-3.20 makes no reference to a “public” warehouse: “All personal property stored in a warehouse” of one “engaged in the business of storing goods for hire” is rendered immune from taxation. The Uniform Warehouse Receipts Law of 1907, B. S. 57:1-1 et seq., defines “warehouseman” as “a person lawfully engaged in the business of storing goods for profit.” “Goods” means “chattels or merchandise in storage, or which has been or is about to be stored.” Ibid. As pointed out in Maritime, a common carrier storing goods at the instance of the consignor has been held to be a warehouseman under the duty of reasonable care. Armstrong Rubber Co. v. Erie R. R. Co., 103 N. J. L. 579 (Sup. Ct. 1927). And a garage keeper storing automobiles for hire is a warehouseman charged with a like duty. New Jersey Mfrs. Ass’n Fire Insurance Co. v. Galowitz, 106 N. J. L. 493 (E. & A. 1930). As said in Maritime, the policy of the exemption “is to place such warehouses on an economic parity with the tax-free warehouses of neighboring states, and thus to lend the aid and encouragement found essential to the provision of such facilities in New Jersey and thereby to serve the general welfare rather than to alleviate the burden of the individual owners of the property”; such tax immunity “does not rest in the inherent characteristics of the property, nor in the use to which it is put, but rather in the location and relation of the property to a business the exemption was designed to serve in the common interest.”
■ And, as there also said, the Uniform Warehouse Receipts Act was primarily designed to achieve uniformity in the law relating to warehouse receipts and thus to effect' the secure and ready use of such receipts as instruments of *517title and credit. The act applies to all warehousemen “engaged in the business of storing goods for profit,” not to “public” warehousemen alone; and the issuance of warehouse receipts is not determinative of the legal existence of a warehouse. R. S. 57 :1-4 et seq. See Halligan & McLellan, Inc., v. State Board of Tax Appeals, 122 N. J. L. 551 (Sup. Ct. 1939).
There is no rational distinction in this regard between “public” and “private” warehouses. Warehouses are sometimes deemed “public” in the sense that they perform a function affected with a public interest and are therefore subject to governmental regulation for the common good. E. g. Townsend v. Yeomans, 301 U. S. 441, 57 S. Ct. 842, 81 L. Ed. 1210 (1937). But warehousing is generally considered a business operation of concern only to the warehouseman and the private persons for whom he stores goods. Eor most purposes a distinction between public and private warehousemen is of no moment; the law ordinarily does not require a warehouseman to hold himself out to the general public as such. National Union Bank of Reading v. Shearer, 225 Pa. 470, 74 A. 351 (Sup. Ct. 1909); Carley v. Offutt & Blackburn, 136 Ky. 212, 124 S. W. 280, 26 L. R. A., N. S., 1114 (Ct. App. 1910). See 56 Am. Jur., Warehouses, §§ 4, 8, 9.
There is no reason in principle for distinguishing in regard to such ad valorem taxation between “public” and private warehouses even where the “private” warehouse is used for the storage of the goods of a single customer and is not open to others, certainly so where there is independent ownership, management and control of the warehouse; and there is no evidence contra here, either direct or circumstantial, although the inquiry was less than exhaustive. Our statute does not embody a different policy. There can be no doubt of that.
The Legislature may, for good reason related to the general welfare, classify warehousing as a public employment, even where the warehouse is established and conducted by private individuals. Munn v. Illinois, 94 U. S. 113, *51824 L. Ed. 77 (1876); People v. Budd, 117 N. Y. 1, 22 N. E. 670, 5 L. R. A. 559 (Ct. App. 1889), affirmed 143 U. S. 517, 12 S. Ct. 468, 36 L. Ed. 247 (1891); People ex rel. Annan v. Walsh, 117 N. Y. 1, 117 N. Y. 621, 22 N. E. 670, 682, 5 L. R. A. 559 (Ct. App. 1889), affirmed 143 U. S. 517, 12 S. Ct. 468, 36 L. Ed. 247 (1891). But this the Legislature has not done. The exemption statute covers all goods and personal property stored in “a warehouse”; and to differentiate in this behalf between “public” and “private” warehouses, without more, and exempt the one from taxation but not the other, is to indulge in arbitrary classification at war with fundamental law. Washington National Ins. Co. v. Board of Review, 1 N. J. 545 (1949). In Schwartz, as said supra, the statute was read as extending to all personal property stored in “a warehouse,” including “all property within the state so situated, omitting none.” This was the accepted interpretation of the act when the 1947 Oonsiitution was framed and approved by the people. And thereafter, in Maritime, the new Supreme Court unanimously held the exemption applicable “to all warehouses whether public or private.”
It cannot matter, in the fulfillment of the legislative policy of protecting New Jersey warehouses against the competitive inequality arising from the immunity of foreign warehouses from such taxation, whether the particular warehouse has at a given time one, two or three or several or many customers. The classification is determined by the avowed economic purpose in the service of the common weal; and, so viewed, this proffered distinction is unreal and discriminatory.
We are not here concerned with a mere pretense of independent warehousing planned to secure freedom from ad valorem taxation. Without hypothesizing the circumstances that would preclude such exemption, and even though on the record made below the action of the State Division could well be affirmed, I consider it to be in the common and individual interest that the cause be remanded for a full exploration of the facts and circumstances and a determina*519tion in the context of the foregoing principles rather than the standard laid down by the majority, as I conceive it.
Hbher, J., concurring in result.
For reversal and remandment—Chief Justice Weintraub, and Justices Hbhbr, Wacheneeld, Burling, Jacobs, Erancis and Proctor—7.
For affirmance—Hone.