Hood Ex Rel. Planters Bank & Trust Co. v. McGill

Bbogden, J. A bank, owning tbe land upon which tbe bank building was situate, closed its doors and tbe Commissioner of Banks took possession for purposes of liquidation by virtue of tbe statute. At tbe time of closing there was an outstanding mortgage securing an indebtedness of $25,000, all of which was unpaid and in default. Tbe mortgagee took possession of tbe real estate and collected tbe rents and thereafter tbe liquidating agent of tbe bank listed tbe real property for taxation. County and town taxes were duly assessed and subsequently tbe mortgagee duly exercised tbe power of sale and became tbe purchaser of tbe property. Tbe respective tax collectors of tbe county and town upon notice from tbe purchaser of tbe property, contend that they have tbe right to levy upon tbe personal property in tbe bands of the liquidator for tbe payment of taxes. *86 Tbe foregoing facts produce two questions of law, to wit: 1. Who is liable for tbe taxes? 2. Do sueb taxes constitute a preferred claim against tbe assets of tbe insolvent bank? Tbe rights and remedies of mortgagors and mortgagees pronounced in tbe decisions of tbis State, are assembled and discussed in Mordecai’s Law Lectures, Yol. I, page 579, et seq. Mordecai says: “If tbe mortgagee take possession be must account for rents and all manner of profits; not only those actually received, but also for what be might have received from any reasonable and prudent use of tbe property without detriment thereto. He is not entitled to betterments put upon tbe land, but is entitled to credit for money expended for necessary repairs, and under some circumstances, for money expended in payment of liens. He may off-set against rents and profits tbe increased value of land caused by bis improvements when be has been long in peaceful possession.” A recent utterance is found in Bank v. Lumber Co., 193 N. C., page 759, as follows: “Tbe legal title to property, whether real or personal, conveyed by a mortgage deed, passes to and vests in tbe mortgagee, who bolds tbe same, however, only for purposes of. security. . . . Tbe equitable or beneficial title remains in tbe mortgagor, who, as to all persons except tbe mortgagee, is considered tbe true owner of tbe property.” Property must be listed for taxation by tbe owner or bis agent except in special instances prescribed by statute. Consequently, tbe owner is primarily tbe taxpayer. Stone v. Phillips, 176 N. C., 457, 97 S. E., 375. Tbe mortgagor is tbe real owner of bis land and liability for taxes thereon is not shifted to tbe mortgagee merely by reason of possession of tbe premises after default; nor is liability for taxes duly levied against real estate, affected by tbe receipt of rents and profits. Harper v. Battle, 180 N. C., 375, 104 S. E., 658. See Chowan County v. Comr. of Banks, 202 N. C., 672, 160 S. E., 808; Rockingham v. Hood, Comr., 204 N. C., 618. Tbe land was duly listed for taxation by tbe Commissioner of Banks or bis agent and tbe taxes were duly assessed. C. S., 218c (14) provides a statutory order of preference in tbe distribution of assets of an insolvent bank. Taxes are specifically included as a preferred item therein. Therefore, tbe trial judge ruled correctly. Affirmed.