United States Fidelity & Guaranty Co. v. McGougan

*15 BbogdeN, J. Tbe land of a taxpayer is advertised fox sale for taxes. Thereupon tbe taxpayer tenders to tbe sheriff making tbe sale a promissory note, payable to said sheriff individually, covering tbe amount of said taxes. Tbe sheriff enters upon tbe proper record of said taxes tbe word “paid,” detaches tbe original receipt, attaches tbe same to tbe note, discontinues tbe advertisement of tbe land, and in bis settlement with tbe county accounts for and pays tbe amount of said taxes. Tbe note is not paid by tbe taxpayer and is thereafter assigned to tbe surety of tbe sheriff, which surety pays to tbe county all amounts due by tbe sheriff for taxes collected and unpaid during bis administration. Tbe foregoing facts present this question of law: Was tbe tax lien discharged ? Tbe principles of law bearing upon tbe question are contained in tbe following cases, to wit: Jones v. Arrington, 91 N. C., 125; Jones v. Arrington, 94 N. C., 541; Kerner v. Cottage Co., 123 N. C., 294, 31 S. E., 718; Berry v. Davis, 158 N. C., 170, 73 S. E., 900; Hunt v. Cooper, 194 N. C., 265, 139 S. E., 446; Litchfield v. Reid, 195 N. C., 161, 141 S. E., 543. These cases contain certain sign-boards marking out tbe highway of tbe law upon tbe subject. These may be designated as follows: (1) A tax collector has no right to receive anything in payment of taxes except legal tender. Kerner v. Cottage Co., 123 N. C., 294. Such payment is now regulated by statute C. S., 7977, which provides that taxes are payable in the existing national currency, etc. (2) Tbe payment of delinquent taxes by the sheriff to the county in bis settlement does not ordinarily destroy the lien for such taxes. Berry v. Davis, 158 N. C., 170; Hunt v. Cooper, 194 N. C., 265. (3) If a taxpayer gives the sheriff a check, which is paid by tbe bank upon which it is drawn out of funds therein on deposit to tbe credit of tbe taxpayer, and tbe canceled check is returned to tbe taxpayer by such bank, and at the time of such payment tbe sheriff delivers to tbe taxpayer tbe receipt for taxes, then tbe acceptance of such check and delivery of such receipt effects a payment of the taxes and a discharge of tbe lien therefor, although the sheriff received no money on tbe instrument by reason of tbe failure of tbe bank. Litchfield v. Reid, 195 N. C., 161. Tbe statute C. S., 7994, subsection 3, requires tbe sheriff or tax collector to deliver a receipt to tbe party paying tbe tax, showing “the name of tbe party, tbe date of payment, and the amount paid.” The trial judge has found that tbe note for tbe taxes, given by tbe taxpayer, was accepted by tbe sheriff, and entry of payment made upon his tax record and the receipt detached from tbe record and attached to tbe note. Manifestly any person undertaking to determine tbe encumbrances and liens upon tbe land would conclude that tbe entry made *16 ujDcm the office record by the official charged with the duty of making-such entry, would discharge the lien. The land bank as mortgagee had an interest in the property and was empowered by the deed of trust to foreclose the instrument “for the nonpayment of taxes.” The tax records constitute the chief evidence of an outstanding lien for taxes, and in the absence of mistake, fraud, collusion or other vitiating element, the entry of payment, interpreted in the light of the facts found by the trial judge, warrants the conclusion that the lien for said taxes was discharged. In other jurisdictions cases supporting the judgment rendered are: Mercantile Trust Co. v. Hart, 35 L. R. A., 352, and Camden v. Fink Coal & Coke Company, 61 A. L. R., 584, and annotation. For instance, the Court of Civil Appeals for Texas, in Furche v. Mayer, 29 S. W., 1098, in discussing the principle involved where a note was given for 'the payment of taxes, said: “We find no well-considered case holding a person entitled to subrogation where he pays off the lien debt simply upon the request of the debtor, unaccompanied by an agreement of sub-rogation to the discharged lien, or circumstances from which such an agreement may be implied.” Compare Guano Co. v. Walston, 187 N. C., 667, 122 S. E., 663. Therefore, if a sheriff accepts a note in payment for taxes for the accommodation of the taxpayer, marking the records in his office paid and detaching the original receipt from the record, and thereafter pays said taxes to the county, neither such sheriff nor the bondsman can assert or establish a lien upon the land. There are certain exceptions in the record to the findings of fact, but it appears that the evidence and reasonable inferences that may be drawn therefrom support the judgment. Affirmed. Stacy, C. J., took no part in the consideration or decision of this case.