City of Raleigh v. Jordan

• Decision Date: 19 June 1940
• Docket Number: 460.
• Parties: CITY OF RALEIGH v. JORDAN et al.
• Court: North Carolina Supreme Court

9 S.E.2d 507

218 N.C. 55

CITY OF RALEIGH v. JORDAN et al.

No. 460.

Supreme Court of North Carolina

June 19, 1940

P H. Busbee and John G. Mills, Jr., both of Raleigh, for plaintiff.

R W. Winston, Jr., of Raleigh, for defendant Insurance Company.

CLARKSON Justice.

This was a civil action instituted by the City of Raleigh under C.S. § 7990 to enforce a lien for unpaid taxes for the years 1925 and 1926. Taxes for those years were levied on certain lots in the City of Raleigh then owned by J. R. Jordan and C P. Grantham. These lots were subsequently acquired by the defendant, the Metropolitan Life Insurance Company, in 1931.

The cause was heard upon an agreed statement of facts. The court below held that under the provisions of Chap. 181, Public Laws of 1933, the taxes on this property for 1925 and 1926 were barred and uncollectible. Plaintiff appealed.

Section 7 of the Act of 1933 is in these words: "All tax liens held by counties, municipalities, and other governing agencies for the year one thousand nine hundred twenty-six and the years prior thereto, whether evidenced by the original tax certificates, or tax sales certificates, and upon which no foreclosure proceedings have been instituted, are hereby declared to be barred and uncollectible." It seems reasonably clear that it was the intention of the Legislature to bar the enforcement of liens for unpaid taxes for the year 1926 and prior years, under whatever guise attempted, and that this intention is adequately expressed in the act. Nor do we think there is any constitutional limitation upon the power of the General Assembly which would invalidate the enactment of such a law. One of the purposes of the Act of 1933 was to permit past-due taxes to be refunded, that is, to permit the counties and municipalities to enter into agreements with distressed taxpayers by which the taxes might be paid by installments. But the statute gives the counties no power to enter into any arrangement with regard to taxes for the year 1926, or any years prior thereto. The act permitted the refunding for the years subsequent to 1926 only. The use of the phrase "all tax liens" was obviously intended to include more than tax sales certificates, and to render uncollectible all taxes, however the lien was evidenced, upon which no foreclosure proceeding had been brought. The term "held," as used in this connection, may not be limited to the physical holding of a tangible thing, but is sufficiently comprehensive to include rights appertaining.

The power of the Legislature to release delinquent taxes, where not forbidden by the Constitution, is well recognized. Cooley on Taxation, 4th Edition, section 1254; Illinois Central Railroad Co. v. Commonwealth, 128 Ky. 268, 108 S.W. 245; Auditor-General v. O'Connor, 83 Mich. 464, 47 N.W. 443; Stone v. Board of Com'rs, 210 N.C. 226, 186 S.E. 342.

In some states the Constitution directly forbids the Legislature to pass any law releasing or remitting taxes. There is no such provision in our Constitution. If other parts of the Constitution should be considered as preventing the direct release of taxes, there would seem to be no question that the Legislature may deal with the lien of taxes as it sees fit, may determine when there should be a lien, when it should attach, and when it should cease. Compare: State v. Fibre Co., 204 N.C. 295, 168 S.E. 207, and cases cited; Bemis Lumber Co. v. Graham County, 214 N.C. 167, 198 S.E. 843, and statutes cited. The effect of this act is to destroy the lien, and, therefore, C. S.§ 7990 does not afford an appropriate remedy. The instant action is not to recover taxes from a delinquent taxpayer but to enforce a lien on land acquired by the present owner from the delinquent taxpayer, five years after the taxes were levied. It should be understood that in 1933, when this act was passed, action on tax sales certificates for 1926 and prior years under the foreclosure Act, C.S. § 8037, had already become barred by the time limitation in the foreclosure act itself.

The discretionary provision contained in section 14 of the act does not apply to Wake County. We conclude that the judgment of the court below should be affirmed.

Affirmed.

STACY C. J., and BARNHILL and WINBORNE, JJ., dissent.

STACY, Chief Justice (dissenting).

My vote is for a reversal of the judgment below.

The facts are not in dispute. It is admitted that city taxes, amounting to $310.50, were duly levied against the lots in question for the years 1925 and 1926. The Metropolitan Life Insurance Company purchased the property at foreclosure sale in 1931, subject to the lien of these taxes. The taxes have not been paid.

I. The construction of the statute.

Admittedly, the plaintiff is entitled to enforce collection of the taxes in question in this action brought under C.S. § 7990, New Hanover County v. Whiteman, 190 N.C. 332, 129 S.E. 808, unless they are barred and rendered uncollectible by section 7, Chap. 181, Public Laws 1933, which provides: "All tax liens held by counties, municipalities, and other governing agencies for the year one thousand nine hundred twenty-six and the years prior thereto, whether evidenced by the original tax certificates, or tax sales certificates, and upon which no foreclosure proceedings have been instituted, are hereby declared to be barred and uncollectible".

This language standing alone, or considered without reference to other provisions of the act, might naturally lead to some ambiguity. But taken contextually the intent of the lawmaking body is apparently involved in no serious doubt.

As recited in the title and the preamble to the act, the primary purpose was to authorize counties, municipalities and other governing agencies, in those localities to which it is applicable, "To Refund Tax Sales Certificates". The first six sections of the act deal with such refunding for the years 1927 to 1931, both inclusive, and in section 7, it is provided that all tax liens held by counties, municipalities and other governing agencies for 1926 and prior years, "whether evidenced by the original tax certificates, or tax sales certificates, and upon which no foreclosure proceedings have been instituted", shall be barred and rendered uncollectible, giving clear indication, we think, that what the General Assembly intended to cut short was the foreclosure of certificates for the years designated upon which no court proceedings had theretofore been instituted. Wilkes County v. Forester, 204 N.C. 163, 167 S.E. 691. Note, the liens to be barred are those held by counties, municipalities, or other governing agencies, which connotes something more than levied, i. e., sale and purchase, whether evidenced by the original tax certificates or tax sales certificates, and upon which no foreclosure proceedings have been instituted. As further indication of this intent, it is provided that no part of the section shall apply to liens "for street and/or sidewalk improvements". Such liens are not evidenced by tax certificates or tax sales certificates.

Moreover, it is not after the manner of our Assembly to grant immunities or special privileges to those who have neglected to pay their taxes. Rather, the idea was to preclude foreclosure suits on certificates when held by those governing agencies which, for so long, had slept on their rights. Asheboro v. Morris, 212 N.C. 331, 193 S.E. 424; Logan v. Griffith, 205 N.C. 580, 172 S.E. 348.

This view is strongly fortified by section 14 of the act wherein it is provided that the applicability of the act in a number of counties shall be "within the discretion of the governing bodies of the said counties or municipalities therein"--a provision quite incompatible with the opposite interpretation, as, in that view, it clearly leads to an unwarranted delegation of legislative authority. Durham Provision Co. v. Daves, 190 N.C. 7, 128 S.E. 593. Cf. Livesay v. DeArmond, 131 Or. 563, 284 P. 166, 68 A.L.R. 422. The fact that this discretion is not extended to Wake County renders it no less apposite in searching for the legislative intent.

The whole act deals with "tax certificates". This is so, not only in the title, but throughout the act. There is no occasion for lifting section 7 from its setting. Warrenton v. Warren County, 215 N.C. 342, 2 S.E.2d 463. Language is but a vehicle of thought and may vary in color and content according to the circumstances of its use. Cole v. Fibre Co., 200 N.C. 484, 157 S.E. 857. The pervading purpose of a statute is to prevail over any awkwardness of expression. Belk Bros. Co. v. Maxwell, 215 N.C. 10, 200 S.E. 915, 122 A.L.R. 687; State v. Earnhardt, 170 N.C. 725, 86 S.E. 960. "It is *** fully established that, where a literal interpretation of the language of a statute will lead to absurd results, or contravene the manifest purpose of the Legislature, as otherwise expressed, the reason and purpose of the law shall control and the strict letter thereof shall be disregarded"--Hoke, J., in State v. Barksdale, 181 N.C. 621, 107 S.E. 505, 507.

This interpretation, however, is rejected by the majority. A different meaning is ascribed to the section. As a result, the owner of property who neglected to pay his taxes for the year 1926, and years prior thereto, is rewarded for his delinquency by a gift of his taxes. The State then abandons its primary function as a protector of rights and becomes a giver of gifts. Briggs v. Raleigh, 195 N.C. 223, 141 S.E. 597.

In this view of the matter it is pertinent...