Bemis Hardwood Lumber Co. v. Graham County
| Decision Date | 28 September 1938 |
| Docket Number | 21. |
| Citation | 198 S.E. 843,214 N.C. 167 |
| Parties | BEMIS HARDWOOD LUMBER CO. v. GRAHAM COUNTY et al. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Graham County; J. H. Clement, Judge.
Action by the Bemis Hardwood Lumber Company against Graham County and another to recover certain taxes paid under protest. From an adverse judgment, the defendants appeal.
Reversed.
This was an action brought by the plaintiff to recover of the defendants certain taxes paid under protest, and resulted in a recovery by the plaintiff in the amount of $209.15, taxes paid for the year 1937, with interest and costs.
Pertinent facts are as follows:
The plaintiff was the owner of certain lands in Graham County upon which the taxes were levied. On the 15th day of May 1935, plaintiff executed to the United States of America an option for the purchase of these lands, the said purchase depending upon the approval of the Attorney General of the United States as to the title. It was provided in the option that if the vendors were unable to show an established title, to the satisfaction of the Attorney General, the United States would, if it deemed advisable institute proceedings for the condemnation of the lands.
The option permitted certain privileges to be exercised upon the lands by the United States pending the exercise of the privilege of purchase, among them that the optionee might enter the lands "for all proper and lawful purposes including examination of lands, minerals, timber, and other resources", and that, pending the vesting of title of the lands in the United States, the latter, if it elected to do so, might, upon the acceptance of the option, use, occupy, and administer the lands for the purpose of national forests, or the establishment thereof, subject to the limitations and restrictions provided in the option.
On July 30, 1935, the plaintiff, or its predecessor in title, had notice from the Department of Agriculture of the election to purchase the land under the provisions of the option. After this notification the Lumber Company surrendered the property to the United States of America and exercised no rights thereover except such as were reserved in the option.
On the 10th day of February, 1937, the United States of America began proceedings for the condemnation of the land by filing a petition in the United States District Court For the Western District of North Carolina, at Asheville, and the condemnation proceeded in due form down to the confirmation of the report of the Commissioners on the 25th day of June, 1937, and the final decree of the Court adjudging the title to be divested from this plaintiff (respondent in the condemnation proceedings), and vested in the United States of America, on the 25th day of August, 1937.
Under the assumption that the lands in question were not subject to the county tax as property of the plaintiff, because of the option and the pendency of the condemnation proceedings referred to, the plaintiff refused to list the lands for taxation during the year 1937; and, upon such failure, the lands were listed by the county authorities, as provided in the Machinery Act, and the taxes assessed. The plaintiff paid the taxes under protest, demanded the return thereof in apt time, and, upon failure of the defendants to make refund within the ninety days provided by the statute, brought this suit for their recovery.
Morphew & Morphew, of Robbinsville, for appellants.
R. L. Phillips, of Robbinsville, for appellee.
The Machinery Act, Chapter 291, Public Laws of 1937, governing the listing and appraisal of property and the levy and collection of taxes, contains the following provisions:
Obviously Section 1401, fixing the attachment of the lien as of April first, has reference to State v. Fibre Co., 204 N.C. 295, 168 S.E. 207, cited in defendants' brief, in which it was held that the date on which the lien attached was "when the taxes become due", that is, the first Monday in October of the year in which they are levied, while liability for the tax was held to arise on the first day of the fiscal year,-July 1st. Therefore, a brief reference to State v. Fibre Company becomes pertinent.
In fixing the date of the attachment of the lien, the opinion in that case was not advertent to the fact that the statute itself, C.S. § 7987 (see Michie's Code, same section), fixed the time at which the lien attached as the first day of June. This is recognized and approved by the Court in Bryan v. Craven County, 204 N.C. 728, 729, 733, 169 S.E. 625, filed a little later and printed in the same volume. Apparently both the date for the attachment of the lien and that of the liability for the tax stated in State v. Fibre Co. came about through an inadvertent blending of the Machinery Act, which pertains to property taxes exclusively, with the current Revenue Act, which provides principally for the taxation of privileges, and fixes the period during which they may be exercised under the license granted. The provisions of the latter Act were thus incorporated into the former, although the two acts are separate and distinct, and relate to different subjects.
The tax on property is a visitational tax, and is the taking of a part of the taxpayer's wealth, represented by the property he owns, for the needs of Government. Under our present statute it is taken as a percentage of the ascertained value "according to ownership", as of the day of the visitation,-April 1st. It is not an excise tax for the privilege of owning property for the period of the fiscal year, or any other period.
Logically, therefore, the liability for the tax arises on the day the lien attaches to the property, and on the day the taxpayer is found to be in ownership thereof,-April 1st,-and we so hold. The purpose and effect of the statute above quoted was to reinstate the law in this respect as it existed prior to State v. Fibre Co. here considered.
Since none of the steps taken by the United States Government with respect to the property antedated April 1st (the date we consider the property became subject to the tax, if it did at all), except the taking of the option and the commencement of the condemnation proceeding, the controversy is narrowed down to the question of whether this plaintiff was the owner of the lands upon the first day of April, 1937, within the meaning of the pertinent provisions of the Machinery Act. The plaintiff was such owner unless (1) the giving and acceptance of the option, and the acts of the optionee upon plaintiff's lands, or (2) the commencement of the condemnation proceedings, had divested him of such ownership and vested it in the United States of America. We are of the opinion that neither of these occurrences had that effect.
(1) Neither the option whether standing alone or fortified by the acts done upon the lands, as set out in the findings of fact nor the surrender of the lands to the United States Government for the uses to which they were put, in our opinion, had the effect of transferring the ownership to the United States. At all times, in so far as the option is concerned, until actual title to the land was acquired, the United States had the right to withdraw from the situation and leave the lands in the...
To continue reading
Request your trial