Henderson County v. Smyth

• Decision Date: 01 November 1939
• Docket Number: 173.
• Citation: 5 S.E.2d 136,216 N.C. 421
• Parties: HENDERSON COUNTY v. SMYTH et al.
• Court: North Carolina Supreme Court

5 S.E.2d 136

216 N.C. 421

HENDERSON COUNTY v. SMYTH et al.

No. 173.

Supreme Court of North Carolina

November 1, 1939

Civil action instituted in Superior Court of Henderson County by the issuance of a summons on 7 June, 1939. Contemporaneously the Clerk of the Superior Court, in an order extending the time for filing complaint, finds that the nature and purpose of the action is "for recovering judgment on account of the failure of defendants and especially Ellison A. Smyth, to list and pay taxes over a long period of years on a large amount of cash, notes, solvent credits and other personal property".

On the same day upon motion of plaintiff, Rousseau, Judge of Superior Court, holding the courts of the 18th Judicial District in Henderson County, upon facts found from the motion, inter alia "that this action is brought in the name of the sovereign county of Henderson against defendants on account of the failure of defendant Ellison A. Smyth to list certain solvent securities, credits, moneys, notes, and other personal property", and "for the purpose of collecting *** taxes contended to be due on said personalty to the plaintiff", ordered that the defendants, E. A Smyth and E. A. Smyth, III, be examined, individually and as officers of the corporate defendant, before a commissioner then appointed by the Court; and that they produce for the inspection and examination of plaintiff's counsel all books and records of the corporation, showing the amount of its indebtedness to defendant E. A. Smyth since 1 June, 1925 to the present date, and more especially commanding and requiring them to have and produce certain annual audits of said corporate defendant as of 31 December, 1925, and as of 31 December of each and every year since to and including the year 1938. This order was served on defendant on 7 June, 1939, by the Sheriff of Henderson County.

Thereupon, on 8 June, 1939, the defendants excepted to the said order issued on 7 June, 1939, and moved that it be set aside and vacated, and that the action be dismissed for that it appears upon the face of the proceedings that the Superior Court does not have jurisdiction of the subject matter of the action, in that the purpose of the action is to recover judgment for failure of defendants to list for taxation and to pay taxes on solvent credits and personal property in the year 1925 and subsequent years.

Defendants filed affidavits in support of the motion. Upon hearing the Court denied the motion and refused to dismiss the action, and set a time for the examination of defendants in accordance with said former order.

Defendants, and each of them, except and appeal to the Supreme Court, and assign error.

Smathers & Meekins, of Asheville, for appellants.

M. M. Redden and R. L. Whitmire, both of Hendersonville, for appellee.

WINBORNE Justice.

On this appeal two questions are presented for decision:

(1) Has the Superior Court jurisdiction of the subject matter of an action, the nature and purpose of which is to discover, to list and to assess for taxation property which has escaped taxation?

(2) If not, may the action be dismissed after issuance of summons and before filing of complaint, when lack of jurisdiction is then apparent upon the face of the proceedings? The first is answered "No", and the second "Yes".

1. A defect of jurisdiction exists where a Superior Court of general jurisdiction acts upon a subject which under the Constitution or laws of the State is "reserved for the exclusive consideration of a different judicial or political tribunal". In such cases the exercise of power is usurpation. Burroughs v. McNeill, 22 N.C. 297.

The Constitution of North Carolina vests the power to levy taxes exclusively in the legislative branch of the government. N.C.Const., Art. V. The decisions uniformly so hold. Russell v. Ayer, 120 N.C. 180, 27 S.E. 133, 37 L.R.A. 246; Caldwell Land & Lumber Co. v. Smith, 146 N.C. 199, 59 S.E. 653; Pullen v. Corp. Comm., 152 N.C. 548, 68 S.E. 155; Person v. Board of State Tax Com'rs, 184 N.C. 499, 115 S.E. 336; Person v. Doughton, 186 N.C. 723, 120 S.E. 481; Wachovia Bank & Trust Co. v. Doughton, 189 N.C. 50, 126 S.E. 176; Belk Bros. Co. v. Maxwell, 215 N.C. 10, 200 S.E. 915, 122 A.L.R. 687.

In Person v. Doughton, supra, it is said [186 N.C. 723, 120 S.E. 482]: "The judiciary is without power to levy assessments or to devise a scheme of taxation. *** This is a legislative and not a judicial function".

Applying these principles to the present case it is apparent that the courts have no jurisdiction over an action which...