Appeal of Perry-Griffin Foundation
Citation | 424 S.E.2d 212,108 N.C.App. 383 |
Decision Date | 05 January 1993 |
Docket Number | No. 9110PTC1222,PERRY-GRIFFIN,9110PTC1222 |
Parties | In the Matter of the Appeal ofFOUNDATION from the Appraisal of Certain Real Property By the Pamlico County Board of Equalization and Review for 1989. |
Court | North Carolina Court of Appeals |
Sumrell, Sugg, Carmichael & Ashton by James R. Sugg, Rudolph A. Ashton, III, and Jimmie B. Hicks, New Bern, for appellant, Pamlico County and Pamlico County Bd. of Equalization and Review for 1989.
Henderson, Baxter & Alford, P.A. by David S. Henderson and Brian Z. Taylor, New Bern, for appellee, Perry-Griffin Foundation.
The Board brings forth two assignments of error concerning the Tax Commission's final decision. These assignments of error present the following issues: (1) whether the Tax Commission erred in its reversal of the Pamlico County Board's valuation of the property; and (2) whether the Tax Commission's decision places uniformity in assessments at risk. After a thorough and careful review of the record, we affirm the final decision of the Tax Commission.
Initially, we note the important competing interests involved in this case in light of this Court's statement in In Re Appeal of Bosley, 29 N.C.App. 468, 472-73, 224 S.E.2d 686, 689, disc. review denied, 290 N.C. 551, 226 S.E.2d 509 (1976), recognizing that On the one hand, there are the significant and substantial concerns involving the general principles of uniformity and equality in taxation, well established in numerous opinions addressing contexts other than the taxation of the property of charitable trusts. See generally Realty Corp. v. Coble, Sec. of Revenue, 291 N.C. 608, 231 S.E.2d 656 (1977); Bosley, 29 N.C.App. 468, 224 S.E.2d 686; Hajoca Corp. v. Clayton, Comr. of Revenue, 277 N.C. 560, 178 S.E.2d 481 (1971).
On the other hand, there are the significant and substantial concerns involving both the unique characteristics and public policy purposes of charitable trusts, previously recognized in numerous opinions and statutes. See generally Board of Trustees of UNC-CH v. Heirs of Prince, 311 N.C. 644, 648, 319 S.E.2d 239, 242 (1984) () ; Edmisten v. Sands, 307 N.C. 670, 674, 300 S.E.2d 387, 390 (1983) () ; YWCA v. Morgan, Attorney General, 281 N.C. 485, 189 S.E.2d 169 (1972) ( ); Trust Co. v. Morgan, Attorney General, 279 N.C. 265, 272, 182 S.E.2d 356, 361 (1971) ( ); Trust Co. v. Construction Co., 275 N.C. 399, 168 S.E.2d 358 (1969) ( ); Sternberger v. Tannenbaum, 273 N.C. 658, 678-79, 161 S.E.2d 116, 131 (1968) (); G.S. 36A-52(a) ( ); G.S. 36A-52(b) ( ); G.S. 36A-52(c) ( ); G.S. 36A-53 (Charitable Trusts Administration Act); G.S. 36A-54 (tax-exempt status).
We also note that the land in controversy here has been the subject of earlier litigation. Foundation-taxpayer filed a complaint in Pamlico County Superior Court on 8 July 1987 seeking to have the restraint on alienation voided "[b]ecause of the inability of the foundation to generate sufficient assets or income to provide the charitable objects created in the Will." In that action brought pursuant to G.S. 36A-53(a), Foundation-taxpayer sought the Superior Court's permission to sell its real properties, including the timberland which the Pamlico County Board seeks to tax at its highest and best use of residential and recreational development. In the complaint, Foundation-taxpayer specifically alleged that "[t]he Foundation has a good faith offer to purchase its timberland tracts for Two Million Two Hundred Thousand Dollars ($2,200,000.00)." The proposed purchaser intervened as a party plaintiff. On 21 March 1988, the Superior Court issued a judgment ruling that the restraint on alienation was valid and enforceable and authorizing "a sale of so much of the real property as is necessary to accomplish such charitable purposes [as found in Perry's will]." The judgment specifically directed that the rental properties were to be sold first. In Perry-Griffin Foundation v. Thornburg, 93 N.C.App. 790, 379 S.E.2d 114, disc. review denied, 325 N.C. 272, 384 S.E.2d 518 (1989) (unpublished opinion), this Court affirmed the Superior Court's judgment and held that the restraint on the alienation of Foundation-taxpayer's property was valid and enforceable precisely because Foundation-taxpayer was a charitable trust. This Court stated:
In directing that the rental property be sold first and only so much of the timberland as is necessary to create the loan fund and build the houses referred to in the will the court reformed the trust in a manner that appears to be in accord with its best interest and that will least conflict with the testatrix's ban against selling any of the trust real estate. While the court might have justifiably approved the sale of all the rural real estate to the intervenor for $2,200,000, it certainly did not err in declining to do so since, inter alia, expert evidence was presented to the effect that the timberland is worth twice that amount. Nor is it fatal to the judgment that it makes no provision for either meeting the foundation's annual maintenance costs and expenses or for eventually disposing of or using the other real property and any remaining surplus after the relatively small needs of the student loan funds and homes for ladies of limited means are met. Such provisions can be made under the court's cy-pres powers whenever it is made to appear that they are either necessary, as paying the foundation's expenses certainly is, or in the best interest of the trust.
Id. Accordingly, the Pamlico County Board and Foundation-taxpayer have stipulated before the Tax Commission that "[t]he net effect of this [the Superior Court's 21 March 1988] judgment was to preclude development and/or sale of forest property in that a sale of only a portion of the in-town property was sufficient to fund the purposes of the trust" and that Foundation-taxpayer "is legally unable to develop, sell or market said forest lands and is unable legally to make any other use of the same except to harvest timber."
The Pamlico County Board argues that the Tax Commission erred by reversing the Pamlico County Board's valuation. The Pamlico County Board's valuation was based on the assumption that residential and recreational development was the highest and best use of Foundation-taxpayer's property. The Pamlico County Board argues that this reversal was "unlawful, unreasonable, unjust and unwarranted." We disagree and find that the Tax Commission did not err.
In re McElwee, 304 N.C. 68, 73-74, 283 S.E.2d 115, 119 (1981). G.S. 105-345.2 provides:
(b) So far as necessary to the decision and where presented, the court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning and applicability of the terms of any Commission action. The court may affirm or reverse the decision of the Commission, declare the same null and void, or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the appellants have been prejudiced because the Commission's findings, inferences, conclusions or decisions are:
(1) In violation of constitutional provisions; or
(2) In excess of statutory authority or jurisdiction of the Commission; or
(3) Made upon unlawful proceedings; or
(4) Affected by other errors of law; or
(5) Unsupported by competent, material and substantial evidence in view of the entire record as submitted; or
(6) Arbitrary or capricious.
Under the statutorily mandated whole record test of G.S. 105-345.2, this Court is not permitted to replace the Tax Commission's judgment with its own judgment even where there are two reasonably conflicting views. "The whole record test is not 'a tool of judicial intrusion; instead it merely gives a reviewing court the capability to determine whether an administrative decision has a rational basis in the evidence.' " Rainbow...
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