Board of Financial Control of Buncombe County v. Henderson County

• Decision Date: 09 October 1935
• Docket Number: 175.
• Citation: 181 S.E. 636,208 N.C. 569
• Parties: BOARD OF FINANCIAL CONTROL OF BUNCOMBE COUNTY v. HENDERSON COUNTY.
• Court: North Carolina Supreme Court

181 S.E. 636

208 N.C. 569

BOARD OF FINANCIAL CONTROL OF BUNCOMBE COUNTY v. HENDERSON COUNTY.

No. 175.

Supreme Court of North Carolina

October 9, 1935

Appeal from Superior Court, Henderson County; Harding, Judge.

Controversy without action between the Board of Financial Control of Buncombe County and the County of Henderson.From an adverse judgment, the defendant appeals.

Judgment reversed.

This is a controversy without action.The agreed statement of facts is as follows:

"1.The Board of Financial Control of Buncombe County, North Carolina, is a municipal corporation created by the Legislature of North Carolina, and its duties and privileges are set out in chapter 253 of the Public Local Laws of 1931 and as amended in chapter 189 of the Public Local Laws of 1933, and as amended by chapter 227, of the Public Local Laws of 1935, and under authority of these acts is the owner of and is liquidating all of the properties, both real and personal, which were received by the City of Asheville and County of Buncombe as collateral security for their deposits in the Central Bank and Trust Company of Asheville and certain other banks.The County of Henderson is a body politic under the statutes of North Carolina.

2.The Board of Financial Control so created obtained title by conveyance dated November 13, 1931, and is now the lawful owner in fee simple of the following described property:

All that certain piece, parcel or lot of land, situate, lying and being in the City of Hendersonville, at the northwest intersection of Main Street and Fourth Avenue, and more particularly described as follows:

Beginning at a point in the western margin of Main Street, said point being located where the said margin of Main Street intersects the northern margin of Fourth Avenue, and runs thence with the said margin of Main Street, north 10 deg. west 45.8 feet to a point at the extreme northeast corner of the building now occupied by the First Bank & Trust Company, and runs thence with the northern face of the wall of said building South 80 deg.West 130 feet to a point in the eastern margin of a 20 foot alley, now known as Jackson Street; runs thence with the eastern margin of said Jackson Street, south 10 deg. east 45.8 feet to a point where the said Jackson Street intersects, the northern margin of Fourth Avenue; thence along and with the northern margin of Fourth Avenue, north 80 deg. east 130 feet to the point of Beginning.Being all that property conveyed to the First Bank & Trust Company by Adolf Ficker and wife, by deed dated July 16, 1919, and recorded in Deed BookNo. 102, at page No. 245, in the office of the Register of Deeds for Henderson County, North Carolina.

3.The Board of Financial Control has received from W. B. Hodges and his associates of Hendersonville a bona fide offer to purchase the said property at a price agreed upon but requiring title in fee simple, free and clear of all liens and taxes.There are no liens nor claims against said property other than the taxes claimed by the County of Henderson for the years 1935, 1934, 1933 and 1932.

4.Under their duly constituted authority the Board of County Commissioners of Henderson County have assessed said property for taxation for the aforesaid years and have levied a tax against same which the plaintiff has refused and still refuses to pay; and the Tax Collector of Henderson County has advertised said porperty to be sold for taxes for the aforesaid years.The proposed purchasers have refused to accept title while this claim of tax lien stands against the property.The plaintiff, for and in behalf of the County of Buncombe and City of Asheville, denies that the County of Henderson is permitted to tax said property for the years hereinabove set forth, and, therefore, refuses to pay the same.

5.Since plaintiff acquired the property described in paragraph 2 it has been renting and is now renting said property as an office building to various persons and corporations, who operate private businesses.

Wherefore, the parties hereto have agreed upon the foregoing facts and respectfully urge a speedy determination of the matter of law involved in this transaction.The matter in controversy being whether or not such taxes may be assessed as a lien against the said property for and during the period title to same is vested in said Board of Financial Control.

Witness the signature of counsel representing both parties, this the ------ day of August, 1935.J. H. Sample, Attorney for the Board of Financial Control of Buncombe.M. M. Redden, Attorney for The County of Henderson."

The judgment of the court below rendered on the agreed statement of facts was to the effect that the tax on the land assessed by defendant was invalid.To the judgment as rendered, the defendant excepted, assigned error, and appealed to the Supreme Court.

Redden & Redden, of Hendersonville, for appellant.

J. Y. Jordan, Jr., and J. H. Sample, both of Asheville, for appellee.

CLARKSON Justice.

The city of Asheville had certain collateral notes to protect its deposits in the Central Bank & Trust Company of Asheville, when the bank broke.To collect and settle the many matters in which Asheville and Buncombe county were interested, from the failure of this and other banks, the General Assembly set up the Board of Financial Control of Buncombe County-the plaintiff in this action.

Under this set-up the plaintiff acquired an office building in Hendersonville, Henderson county, N. C., by conveyance, on November 13, 1931, and since that time has rented it as an office building to various persons and corporations who operate private businesses.There are certain taxes assessed against said property by Henderson county for the years 1932, 1933, 1934, and 1935.The plaintiff has contracted to sell the land in controversy, but the purchaser requires a title in fee simple, free and clear of all taxes.

The question involved: Is the real property, owned by the Board of Financial Control of Buncombe County, created by chapter 253 of the Public Local Laws of 1931, exempt from the payment of ad valorem tax?We think not.

In Bourne v. Board of Financial Control of Buncombe County,207 N.C. 170, 176 S.E. 306, this court held that the Board of Financial Control for Buncombe County is a corporation with certain enumerated powers and in effect that said board was the collecting or liquidating agent of the city of Asheville and county of Buncombe.

So the question in this controversy narrows itself down: Can the city of Asheville, a municipal corporation, acquire business property in another county, hold and rent it without the payment of taxes in that county?We think not.The property is not held or used for any governmental or necessary public purpose, but for purely business purposes.

If a municipal corporation can go into a rental business and escape taxation, it would have a special privilege not accorded to others who are in a like business.The Constitution of North Carolina, art. 5, § 5, is as follows ""Property belonging to the State, or to municipal corporations,...