Taylor v. Richardson

• Decision Date: 16 October 1918
• Docket Number: 178.
• Parties: TAYLOR ET AL. v. RICHARDSON ET AL., BOARD OF DRAINAGE COM'RS.
• Court: North Carolina Supreme Court

96 S.E. 1027

176 N.C. 217

TAYLOR ET AL. v. RICHARDSON ET AL., BOARD OF DRAINAGE COM'RS.

No. 178.

Supreme Court of North Carolina

October 16, 1918

Appeal from Superior Court, Craven County; Allen, Judge.

Action by R. B. Taylor and others against G. V. Richardson and others, composing the Board of the Moseley Creek Drainage District. Florence K. Banks, as mortgagee of land assessed in the district, moved before the clerk of the superior court to vacate such assessment. From a judgment affirming the judgment of the clerk denying the motion, Florence K. Banks appeals. Affirmed.

Allen J., dissenting.

Dawson Manning & Wallace, of Kinston, and Moore & Dunn, of Newbern for appellant.

Rouse & Rouse and Y. T. Ormond, all of Kinston, for Geo. B. Pate.

CLARK C.J.

This is a motion in the proceeding for the establishment of the Moseley Creek drainage district in Craven. Said district lies partly in Craven and partly in Lenoir. The proceeding however, for the establishment of the district, was filed and the orders taken in Craven as authorized. Pub. Laws 1909, c. 442, § 2. The petitioner Mrs. R. C. Banks in 1915 instituted an independent action to restrain the collection by the sheriff of Craven of an assessment levied upon the lands of George B. Pate (which she had conveyed to him in August, 1913) to pay the bonds and interest issued for the construction of the Moseley Creek drainage district. On appeal (Banks v. Lane, 170 N.C. 14, 86 S.E. 713) this court in an unanimous opinion held that the restraining order should be dissolved. The court said:

"The defendant George B. Pate was in possession of the land under conveyance from the feme plaintiff, and was duly served with summons and acquiesced in all the proceedings taken in said cause, or at least is bound by them. By virtue of the notice required by above acts, the feme plaintiff had opportunity to intervene and assert any right she might have to oppose the proceeding, if deemed contrary to her interest. Laws 1911, c. 67, § 1. Not having done so, she is bound by the judgment under which the bonds were issued for this improvement." * * * Even if the owner in possession of this land, George B. Pate, had opposed the final decree or, indeed, opposed the formation of this drainage district, his land therein is chargeable with payment of the assessment thereon, and his mortgagee, the feme plaintiff, is in no stronger condition and cannot stay the collection. * * * In this case, the district has been regularly established. There is an adjudication that the required notices have been given. The bonds have been issued, and the bondholders have a right to have the assessments collected to pay the interest and principal of the same. The plaintiffs, not having established their claim by coming forward at the proper time to show that their interest would be adversely affected, are bound by the proceedings and cannot restrain the collection of the assessments to pay the bonds issued for the improvement of the land. The presumption is, and the final decree has adjudged in this case, that the land has been benefited by the drainage district more than the burdens assessed against it for such purpose.

"The plaintiffs urge that Pate is insolvent, but this is not material, as the liability is on the land, which has been benefited by the proceedings. The plaintiffs further insist upon the familiar principle that, as the mortgage is for the purchase money, executed simultaneously with the deed to Pate, the title did not vest in him. That is true for the purpose of preventing the vesting of dower right in his widow or the lien of a docketed judgment. But it has no application here. Pate has a conveyance of the land and is in possession of the same, and the property is liable for taxes or legally adjudged assessments in his hands. Under the statute he was the proper party to represent such land in the formation of the drainage district, and it is bound for a pro rata payment of the bonds issued and the interest thereon, just as it is for taxes thereon."

There was a petition to rehear that case (171 N.C. 505, 88 S.E. 754), which was fully argued and carefully considered by the court. There was an opinion with two concurring opinions, and a dissenting opinion. The court said in the opinion in chief as follows:

"The feme plaintiff set out her chain of title down to August, 1913, when she conveyed to George B. Pate and took from him a mortgage back to secure the purchase money. Her complaint averred that she and those under whom she claims had no notice served on her, personally, of the proceedings for the assessment made in said drainage district; that said George B. Pate was insolvent, and asked a restraining order against the collection of said assessment.

It is very evident that, by the expression 'those under whom she claims,' the feme plaintiff refers to the grantors in the deeds set out in her chain of title, and not to George B. Pate. The answer does not deny, but asserts, that the latter, who is in possession, has been served with summons in the cause. In our former decision we called attention to the fact that the statute did not require that mortgagees and lienholders by judgment or otherwise should be served with summons; that to require them to be parties would greatly increase the difficulty of creating these drainage districts, and they would have no interest to serve in the creation thereof. As was said in Drainage Com'rs v. Farm Ass'n, 165 N.C. 701 [81 S.E. 947, Ann. Cas. 1915C, 40], where the point was presented, mortgagees and lienholders are not required to be served with notice personally, because: 'A mortgage is subject to the authority to form these drainage districts for the betterment of the lands embraced therein. The statute is based upon the idea that such drainage districts will enhance the value of the lands embraced therein to a greater extent than the burden incurred by the issuing of the bonds, and the mortgagee accepted the mortgage knowing that this was the declared public policy of the state.'

In our former opinion we held that it was no more necessary that mortgagees and other lienholders should be consulted in the formation of such districts than to permit a mortgagee or lienholder, in the like absence of statutory provision, to enjoin an assessment for the pavement of sidewalks or streets or other improvements of property. We said that the proceeding was in rem, and that the decree for the formation of the district could not be made until a majority of the original landowners, and the owners of three-fifths of all the land which will be affected, have signed the petition, and until all other landowners in the district are notified, and that the decree creating the district must be presumed to have been regularly granted and advertisement of notice for other persons interested in the land has been made as required by sections 5 and 15, c. 442, Laws 1909, and section 1, c. 67, Laws 1911. The complaint does not aver that the plaintiff is the owner of the land, but, on the contrary, that George B. Pate is the owner and in possession, and does not negative that notice by publication was duly made as to all others in interest, but merely avers that the feme plaintiff was not served personally--which is not necessary.

The drainage act has been held constitutional, and the validity of the district laid off under it cannot be attacked collaterally. Newby v. Drainage District, 163 N.C. 24 .

The district has been formed, the assessment made without objection from landowners, and Laws 1909, c. 442, § 37, provides that the collection of assessments shall not be defeated, where the proper notices have been given, by reason of any defects occurring prior to the order confirming the final report, but that such report shall be conclusive that all prior proceedings were regular, unless appealed from. This is absolutely necessary if the public are to be protected in their purchase of the bonds put upon the market. It is to be presumed that, when the court has rendered such final judgment and the bonds are issued, there will be no interference with the collection of the assessments to pay the bondholders, but that all controversies were thrashed out and settled before such final judgment.

Though the proceeding to create the drainage district was instituted before the plaintiff executed her deed to Pate in August, 1913, yet it may well be that the summons, as the answer avers, was served on him after that date and before the final judgment making the assessments and directing the issue of the bonds. This is another reason why the motion should be made in that cause where the facts in regard to the proceedings are of record. * * *

The mere fact, so strongly insisted on by plaintiff's counsel, that, while this assessment is only $445, all the assessments on this tract aggregate $2,200 on a tract of land which brought before it was drained $4,000, is a matter that was doubtless considered before the decree making the assessment and directing the issue of bonds was entered. The presumption is that the land was benefited far more than the amount of these assessments, or objection would have been made by Pate, the landowner, or by the plaintiff, as to whom notice by publication is,...