County of Lenoir v. Moore

• Citation: 441 S.E.2d 589,114 N.C.App. 110
• Decision Date: 05 April 1994
• Docket Number: No. 928DC1291,928DC1291
• Court: North Carolina Court of Appeals
• Parties: COUNTY OF LENOIR, City of Kinston, v. William H. MOORE, Jr., et al.

Page 589

441 S.E.2d 589

114 N.C.App. 110

COUNTY OF LENOIR, City of Kinston, v. William H. MOORE, Jr., et al.

No. 928DC1291.

Court of Appeals of North Carolina.

April 5, 1994.

Griffin & Griffin by Robert W. Griffin, Kinston, for plaintiff-appellees.

Atty. Gen. Michael F. Easley by Associate Atty. Gen. Christopher E. Allen, Raleigh, for defendant-appellant.

EAGLES, Judge.

Defendant North Carolina Department of Revenue brings forward three assignments of error. After careful consideration of the record and briefs, we affirm.

Defendant NCDR argues that "[t]he trial court erred as a matter of law in awarding summary judgment to plaintiffs and entering its order finding that plaintiffs possessed a first and prior lien on taxpayers' property for tax years 1986 through 1990, thereby barring defendant's interest, because defendant's lien was superior for such years." We disagree.

This case of first impression presents the issue of whether a State tax lien has priority over local ad valorem tax liens which arose from a property owner's failure to pay real estate taxes in the years subsequent to the year in which the State tax lien was docketed. Here, defendant NCDR concedes the priority of the 1982--1985 local ad valorem tax liens. See G.S. 105-355(a) ("the lien for taxes levied on a parcel of real property shall attach to the parcel taxed on the date as of which property is to be listed under G.S. 105-285"); G.S. 105-285(a) ("All property subject to ad valorem taxation shall be listed annually"); G.S. 105-285(d) ("The ownership of real property shall be determined annually as of January 1"). However, defendant NCDR asserts that the State tax lien has priority over the 1986--1990 local ad valorem tax liens, which arose subsequent to the docketing of the 26 August 1985 State tax lien.

In discerning our General Assembly's intent, we commence our inquiry with an analysis of the statutory framework within which the issue must be decided. First, we proceed with an examination of the relevant portions of the Revenue Act, G.S. 105-1 G.S 105-270, and the Machinery Act, G.S. 105-271--G.S. 105-395.1. In the Machinery Act, G.S. 105-356 provides:

(a) On Real Property.--The lien of taxes imposed on real and personal property shall attach to real property at the time prescribed in G.S. 105-355(a). The priority of that lien shall be determined in accordance with the following rules:

(1) Subject to the provisions of the Revenue Act prescribing the priority of the lien for State taxes, the lien of taxes imposed under the provisions of this Subchapter shall be superior to all other liens, assessments, charges, rights, and claims of any and every kind in and to the real property to which the lien for taxes attaches regardless of the claimant and regardless of whether acquired prior or subsequent to the attachment of the lien for taxes.

(2) The liens of taxes of all taxing units shall be of equal dignity.

(3) The priority of the lien for taxes shall not be affected by transfer of title to the real property after the lien has attached, nor shall it be affected by the death, receivership, or bankruptcy of the owner of the real property to which the lien attaches.

G.S. 105-356 (1992) (emphasis added). Defendant NCDR contends that the proviso appearing in G.S. 105-356(a)(1) (underlined supra) refers to G.S. 105-241 of the Revenue Act, which at all times relevant to this action provided:

... State, county, and municipal taxes levied for any and all purposes pursuant to this Subchapter shall be for the fiscal year of the State in which they become due, except as otherwise provided, and the lien of such taxes shall attach annually to all real estate of the taxpayer within the State on the date that such taxes are due and payable, and said lien shall continue until such taxes, with any interest, penalty, and costs which shall accrue thereon, shall have been paid....

Provided, however, that the lien of State taxes shall not be enforceable as against bona fide purchasers for value, and as against duly recorded mortgages, deeds of trust and other recorded specific liens, as to real estate, except upon docketing of a certificate of tax liability or a judgment in the office of the clerk of the superior court of the county wherein the real estate is situated, and as to personalty, except upon a levy upon such property under an execution or a tax warrant, and the priority of the State's tax lien against property in the hands of bona fide purchasers for value, and as against duly recorded mortgages, deeds of trust and other recorded specific liens, shall be determined by reference to the date and time of docketing of judgment or certificate of tax liability or the levy under execution or tax warrant. Provided further, that in the event any taxpayer shall execute an assignment for the benefit of creditors, or if receivership, a creditor's bill or other insolvency proceedings are instituted against any taxpayer indebted in the State on account of any taxes levied by the State, the lien of State taxes shall attach to any and all property of such taxpayer or of such insolvent's estate as of the date and time of the execution of the assignment for the benefit of creditors or of the institution of proceedings herein mentioned and shall be subject only to prior recorded specific liens and reasonable costs of administration. Notwithstanding the provisions of this paragraph, the provisions contained in G.S. 105-164.38 shall remain in full force and effect with respect to the lien of sales taxes.

The provisions of this section shall not have the effect of releasing any lien for State taxes imposed by other law, nor shall they have the effect of postponing the payment of the said State taxes or depriving the said State taxes of any priority in order of payment provided in any other statute under which payment of the said taxes may be required.

G.S. 105-241 (1992) (emphasis added). See G.S. 105-242(c).

Priority is the central issue here. The Revenue Act, in G.S. 105-241, affords priority to properly docketed State tax liens "as against duly recorded mortgages, deeds of trust and other recorded specific liens, as to real estate...." Recognizing the well established rule of statutory construction that "[w]hen the language of a statute is clear and without ambiguity, 'there is no room for judicial construction,' and the statute must be given effect in accordance with its plain and definite meaning," Avco Financial Services v. Isbell, 67 N.C.App. 341, 343, 312 S.E.2d 707, 708 (1984) (citation omitted), we particularly note that this rule is inapplicable here because the quoted provision of G.S. 105-241, supra, makes no express reference to the tax liens of the State's political subdivisions and the proviso in G.S. 105-356(a)(1) fails to refer explicitly to a particular statute in the Revenue Act.

[W]hen a statute is ambiguous or unclear in its meaning, resort must be had to judicial construction to ascertain the legislative will, and the courts will interpret the language to give effect to the legislative intent. As this Court said in State v. Partlow, 91 N.C. 550 (1884), the legislative intent "... is to be ascertained by appropriate means and indicia, such as the purposes appearing from the statute taken as a whole, the phraseology, the words ordinary or technical, the law as it prevailed before the statute, the mischief to be remedied, the remedy, the end to be accomplished, statutes in pari materia, the preamble, the title, and other like means...." Other indicia considered by this Court in determining legislative intent are the legislative history of an act and the circumstances surrounding its adoption, earlier statutes on the same subject, the common law as it was understood at the time of the enactment of the statute, and previous interpretations of the same or similar statutes.

Finally, it is a well settled rule of statutory construction that, where a literal interpretation of the language of a statute would contravene the manifest purpose of the statute, the reason and purpose of the law will be given effect and the strict letter thereof disregarded. Where possible "the language of a statute will be interpreted so as to avoid an absurd consequence...."

In Re Banks, 295 N.C. 236, 239-40, 244 S.E.2d 386, 389 (1978) (citations omitted). Defendant NCDR contends that it is to be presumed that local ad valorem tax liens qualify as "other recorded specific liens" under G.S. 105-241 because of the proviso which appears in G.S. 105-356(a)(1). Initially, we note that although the proviso currently appearing in G.S. 105-356(a)(1) was originally enacted in 1939, see 1939 N.C. Public Laws, c. 310, s. 1704(a)(2), N.C.Code of 1939 § 7971(213)(a)(2), G.S. 105-376(a)(2) (Michie 1943), the quoted provision upon which defendant NCDR relies did not exist at that time in G.S. 105-241. (The quoted provision in G.S. 105-241 was not enacted until 1949. See 1949 N.C.Sess.Laws, c. 392, s. 6.)

In addressing defendant NCDR's contention, we interpret the general phrase "other recorded specific liens" in relation to the express terms which precede it according to the dictates of ejusdem generis, a well established rule of statutory construction providing that " 'where general words follow a designation of particular subjects or things, the meaning of the general words will ordinarily be presumed to be, and construed as, restricted by the particular designations and as including only things of the same kind, character and nature as those specifically enumerated.' " State v. Lee, 277 N.C. 242, 244, 176 S.E.2d 772, 774 (1970) (citations omitted) (emphasis added). See also State v. Craig, 176 N.C. 740, 744, 97 S.E. 400, 401 (1918) ("when particular and specific words or acts, the subject of a statute, are followed by general words, the latter must as a rule be confined to acts and things of the same kind").

Here, the terms immediately preceding the phrase "other...