Holt v. May , 235 N.C. 46 ( 1952 )

68 S.E.2d 775 (1952) 235 N.C. 46

HOLT et al.
v.
MAY et al.

No. 741.

Supreme Court of North Carolina.

February 1, 1952.

Cooper, Sanders & Holt, Burlington, and Long & Long, Graham, for original petitioners and defendants, appellants.

Thomas C. Carter, Burlington, J. Elmer Long and Clarence Ross, Graham, for movant, appellee.

JOHNSON, Justice.

Ordinarily, in the absence of statute, when land is sold under judicial sale, all taxes accrued prior to the consummation of the sale are charges on the property, rather than on the proceeds of the sale, and pass with the property to the purchaser. 31 Am.Jur., Judicial Sales, sections 172 and 220.

In this jurisdiction, however, by statute, G.S. § 105-408, a judicial sale of land, as between the purchaser and the parties to the proceeding, transfers the lien of a designated class of tax accruals to the proceeds of sale in exoneration of the land. The pertinent provisions of this statute are as follows: `In all civil actions and special proceedings wherein the sale of any real estate shall be ordered, the judgment shall provide for the payment of all taxes then assessed upon the property and remaining unpaid, * * * all of which payments shall be adjudged to be made out of the proceeds of sale. * * *" (Italics added).

In the instant case, the order directing the sale was entered by the court on June 27, 1950. The City Council of the City of Burlington, acting under the provisions of G.S. § 105-339, set the tax rate and levied for the City on July 18, 1950. The Board of Commissioners of Alamance County set the tax rate and levied for the County on July 31, 1950. The sale was confirmed August 10, 1950. The purchase price was paid and the deed delivered by the commissioners on August 24, 1950.

The question for decision here is: What taxes are intended to be covered by the statutory expression "taxes then assessed upon the property"?

The question seems to be settled by what is said in American Agricultural Chemical Co. v. Brock, 198 N.C. 342, 151 S.E. 869, 871. It is there said: "The statute contemplates the payment, out of the proceeds of the sale, of such taxes as are assessed when the sale is made. * * *" Adams, J, speaking for the Court, then goes on to define the word "assessed" as used in the statute: "To `assess' a tax is to fix the proportion which each person among those who are liable to it has to pay; to fix or settle a sum to be paid by way of a tax; to charge with a tax. Black's Law Dictionary; Bouvier's Law Dictionary. An assessment or levy of a tax is essential to its certainty." It thus appears that the Court interpreted the word "assessed" as being synonymous with "levied". This is manifest from the conclusion reached in the decision, 198 N.C. at the bottom of page 345, 151 S.E. 869, at page 871: "For the purpose of attaching to and following the land, the lien of the tax when assessed and levied relates back to the 1st day of May; but the proceeds of a sale made under section 7980 (now G.S. § 105-108) may be applied to such taxes only as are assessed when the sale is made." (Italics added).

Until a judicial sale is confirmed, the purchaser is a mere preferred proposer. Parker v. Dickinson, 196 N.C. 242, 145 S.E. 231; Dixon v. Osborne, 204 N.C. 480, 168 S.E. 683. Therefore it would seem that a judicial sale is not deemed made as contemplated by the statute, G.S. § 105-408, until it is confirmed. See Harrell v. Blythe, 140 N.C. 415, 53 S.E. 232. This is in accord with the rationale of the decision in American Agricultural Chemical Co. v. Brock, supra, cited by the appellants. See 198 N.C. last paragraph of page 345, 151 S.E. 869.

Title is not involved here. Therefore we are not concerned with the rule under which title, upon confirmation, relates back to the date of sale. Parker v. Dickinson, supra; Vass v. Arrington, 89 N.C. 10.

In the instant case the tax levies had been made by both the city and the county before the order of confirmation was entered August 10, 1950.

It follows, then, that the court below correctly ruled that the taxes of both taxing units should have been paid out of the proceeds of sale.

The appellants' plea of waiver seems to be without substantial merit. An intentional relinquishment of a known right is a prerequisite of waiver. 56 Am.Jur., Waiver, sec. 15. The purchaser's right to have the city and county taxes paid out of the proceeds of sale was fixed by statutory mandate. On the record as presented it has not been made to appear that he intentionally relinquished this right. The case of Johnson v. Futrell Bros. Lumber Co., 225 N.C. 595, 35 S.E.2d 889, cited by the appellants, is distinguishable. Nor has it been made to appear that appellants have been prejudiced by any delay of the movant, appellee, in asserting his rights, and in the absence of such showing the benefits of the defense of laches may not be invoked. 30 C.J.S., Equity, §§ 112 and 118. The court below properly overruled the appellants' pleas of waiver and laches.

The judgment below is affirmed.