Caldwell Land & Lumber Co v. Smith

• Decision Date: 27 November 1907
• Citation: 59 S.E. 653,146 N.C. 199
• Court: North Carolina Supreme Court
• Parties: CALDWELL LAND & LUMBER CO. v. SMITH, Sheriff.

59 S.E. 653

146 N.C. 199

CALDWELL LAND & LUMBER CO.

v.SMITH, Sheriff.

Supreme Court of North Carolina.

Nov. 27, 1907.

1. Taxation—Collection—Implied Power.

The county commissioners have implied power, after making an assessment for taxes on unlisted property, to authorize collection by the sheriff.

[Ed. Note.—For cases in point, see Cent Dig. vol. 45, Taxation, § 1023.]

2. Same—Assessment—Notice.

Although the machinery act (Revisal 1905. 5 5232), providing for the assessment of taxes on unlisted personal property, omits to provide that notice shall be given to the owner that he may have opportunity to be heard before the tribunal having power to make the assessment, the owner is entitled to such notice under Const N. C. art. 1, § 17, prohibiting the taking of property without due process of law.

[Ed. Note.—For cases in point, see Cent. Dig. vol. 45, Taxation, § 604.]

3. Same—Action—Parties.

In an action to enjoin collection of taxes on unlisted property, where an assessment is made and the list given to the sheriff for collection, the sheriff is the proper party defendant.

[Ed. Note.—For cases in point, see Cent. Dig. vol. 45, Taxation, § 1249.]

4. Same.

In an action against the sheriff to enjoin collection of taxes assessed on unlisted property, the county commissioners may be joined as parties at their request.

[Ed. Note.—For cases in point, see Cent. Dig. vol. 45, Taxation, § 1249.]

5. Same—Enforcement—Injunction.

The county commissioners placed on the tax list notes executed to plaintiff February 13, 1902, valued at $417,000, and assessed them for taxation at that sum as a solvent credit for the years 1902 and 1903, and added the penalty 25 per cent.; no notice being given to plaintiff of the proceedings. The commissioners placed the list in the hands of the sheriff, who advertised plaintiff's real estate for sale. Held, that plaintiff was entitled to an injunction against the sale pending a final hearing.

[Ed. Note.—For cases in point, see Cent Dig. vol. 45, Taxation, § 1233.]

Appeal from Superior Court, Caldwell County; Ward, Judge.

Action by the Caldwell Land & Lumber Company against John M. Smith, sheriff, to enjoin collection of taxes. From an order continuing the injunction until the final hearing, defendant appeals. Affirmed.

This action is brought by plaintiff, the Caldwell Land & Lumber Company, against defendant, sheriff of Caldwell county, for the purpose of enjoining the collection of certain taxes assessed against its property. The facts disclosed by such allegations in the complaint as are not denied, or are admitted by the answer, are: The board of commissioners of Caldwell county at their meeting in May, 1907, placed upon the tax list, as a solvent credit, certain notes amounting to $417,000 executed by one Geo. O. Shakespeare, February 13, 1902, to plaintiff and secured by a deed in trust. These notes had not been listed for taxation. The commissioners valued the notes at the sum of $417,000, being their face value, and assessed them for taxation at said sum, as a solvent credit, for the years 1902 and 1903, adding to the tax the penalty of 25 per cent. aggregating the sum of $7,655.16. No notice was given plaintiff, either of listing, valuing, or assessing said notes. The commissioners immediately plac-ed the said tax list in the hands of defendant sheriff for collection and he at once advertised for sale plaintiff's real estate consisting of some 42, 982 acres of land. Plaintiff instituted this action June 12, 1907, asking for an injunction, etc. Judge Councill granted a restraining order returnable before Judge Ward, who, on the hearing July 9, 1907, "continued the injunction until the final hearing of the cause." He did not find any facts, simply referring to the pleadings. Defendant excepted and appealed.

Mark Squires, Lawrence Wakefield, and M. N. Harshaw, for appellant.

W. C. Newland and Jones & Whisnant, for appellee.

CONNOR, J. (after stating the facts as above). The machinery act (Revisal 1905, $ 5232), being the same as Acts 1901, p. 101, § 69, c. 7, and all other acts on the subject subsequent thereto, provides that "in all cases where any personal property, chose in action, or any property, except land, liable to taxation, shall have been omitted, or shall be omitted, in any future year from the tax list by the owner, or persons required by law to list the same, the board of commissioners shall enter the same on the duplicate of the next succeeding year and shall add to the taxes of the current year the simple taxes of such preceding year not exceeding five years, with twenty-five per centum added thereto, in which such personal property as aforesaid shall so have escaped taxation and the said board of commissioners shall value and assess the personal property aforesaid for those years and are empowered to examine witnesses and to call for papers to determine the value and to ascertain the persons liable for the tax upon said personal property." This is the only section in the statute concerning or regulating the listing and assessment of personal property omitted from the tax list by the owners. It omits to provide that notice shall be given the owner, or to give him any opportunity to be heard either before or after the property is listed, valued, and assessed. We have no doubt of the power of the Legislature to provide for the listing, assessment, and taxing personal property omitted to be listed as the law requires by the owner. Nor do we perceive any reason why it may not be taxed for five or more preceding years, if it has escaped taxation so long. These questions have been settled by several decisions of this court. Kyle v. Fayetteville, 75 N. C. 445; Railroad v. Com'rs, 82 N. C. 259; Wilmington v. Cronly, 122 N. C. 388, 30 S. E. 9. It is the settled policy, and so required by the Constitution, that all of the property, including solvent credits in the state, shall be assessed and taxed at its value in money. The method of enforcing this constitutional requirement is left with the Legislature, subject to other provisions of the Constitution securing to the citizen the right to be heard before his property is subjected to taxation. We are also of the opinion that an industrial corporation is liable to pay tax on its solvent credits, under such regulations as to the method of listing an assessment as may be provided by law. Of course, the special statutory provision prescribing the mode of assessing the property of banks and building and loan associations are exclusive of all others. A number of interesting questions are raised by the pleadings upon controverted allegations. In the absence of any finding of the facts, we are unable to discuss or decide them intelligently.

There are, however, several questions respecting the procedure in such cases which we think best to dispose of at this time. We would hesitate to give the construction to the statute for which defendant contends. It must be conceded that the provisions of the section in regard to listing, valuing, and assessing unlisted property are painfully indefinite and obscure. While no express power is conferred upon the commissioners, after making the assessment, to place the list so made in the hands of the sheriff, we think that by a fair construction, in the light of the power conferred, in other portions of the statute, respecting the regular tax list, such power is given. The courts have so held. "Assessments of escaped property are made nunc pro tunc; and it is immaterial that the regular periods for making and reviewing assessments, levying the taxes, or placing the rolls in the hands of the collection officers have elapsed, when they are made, unless the owner is thereby deprived of some constitutional...