Lenoir County v. Outlaw

Denny, J. The real questions to be determined on this appeal could have been disposed of expeditiously and without needless complication if the trustee had paid the surplus funds to the Clerk of the Superior Court of Lenoir County in accordance with the provisions of G.S. 45-21.31. In re Gibbs, 205 N.C. 312, 171 S.E. 55. This statute is explicit in its provisions as to how surplus funds should be disposed of by a trustee or mortgagee. And subsection (b) thereof expressly provides that the-“. . . surplus shall be paid to the clerk of the superior court of the county where the sale was had— . . . (4) In all cases where adverse claims thereto are asserted.” This statute was enacted in order to provide a remedy in situations identical with that now before us. In re Gibbs, supra; Chemical Co. v. Brock, 198 N.C. 342, 151 S.E. 869. The petitioner claims a lien on the surplus funds in controversy, under and by virtue of the provisions contained in G.S. 108-30.1, the pertinent parts of which read as follows: “There is hereby created a general lien, enforceable as hereinafter provided, upon the real property of any person who is receiving or who has received old age assistance, to the extent of the total amount of such assistance paid to such recipient from and after October 3, 1951. Before any application for old age assistance is approved under the provisions of this article, the applicant shall agree that all such assistance paid to him shall constitute a claim against him and against his estate, enforceable according to law by any county paying all or part of such assistance. . . . The statement shall be filed in the regular lien docket, . . . and same shall bo indexed in the name of the lienee in the defendants’, or reverse alphabetical, side of the cross-index to civil judgments; in said index, the county shall appear as plaintiff, or lienor; . . . From the time of filing, such statement shall be and constitute due notice of a lien against the real property then owned or thereafter acquired by the recipient and lying in such county to the extent of the total amount of old age assistance paid to such recipient from and after October 1, 1951. The lien thus established shall take priority over all other liens subsequently acquired and shall continue from the date of filing until satisfied: Provided, that no action to enforce such lien may be brought more than ten years from the last day for which assistance is paid nor more than one year after the death of any recipient . . .” The above statute includes two separate and distinct methods by which a county may recover the aggregate amount paid as old age assistance to a recipient. Under the agreement executed by the applicant, the assistance payments to him “shall constitute a claim against him and against his estate enforceable according to law by any county for all or part of such assistance.” The claim rising under this provision of the statute is for the purpose of reaching assets of recipients other than real estate. Such claim is to be filed “within one year after the death of any person [101] who bas received old age assistance, reimbursement for which, has not been made . . . The claim shall be for the total amount of old age assistance paid to or for the benefit of such recipient from and after October 1, 1951, by or through the state and the several counties thereof; and such claim shall have equal priority in order of payment with the Sixth class under section 28-105 of the General Statutes . . .” G.S. 108-30.2. Since Stephen Eogers, deceased, the recipient of the old age assistance, left no personal estate, we are not concerned with this type of claim in the present proceeding. However, we wish to say in passing that in our opinion the last cited statute should be amended so as to provide for the proof-of this class of claims in the same manner as now required by law for proving claims against executors, administrators, and collectors. The other method for obtaining reimbursement for old age assistance payments is bottomed on the general lien on the recipient’s real estate. The demurrer admits the existence of the petitioner’s lien as authorized by the statute. However, the respondent appellee challenges the validity of the lien because no action to enforce it was instituted within one year of the recipient’s death. If it be conceded that no action to enforce such lien may be maintained after the expiration of one year from the death of a recipient of old age assistance, we do not concede that the petitioner herein is barred from having its claim satisfied to the extent funds may be available out of the surplus realized from the sale of the recipient’s real estate. When the petitioner ascertained that the party who held a deed of trust on the property, securing an indebtedness, which constituted a first lien on the property, intended to foreclose thereunder, it became unnecessary for the petitioner to institute foreclosure proceedings based on its lien. Even so, when the petitioner filed its lien and had it indexed and cross-indexed to civil judgments, as required by the statute, the general lien thus established took priority over all other liens subsequently acquired and such lien will continue until satisfied. No action to enforce such lien, however, in any event may be maintained after the expiration of ten years from the last day for which assistance was paid. The statute so provides. In light of the provisions contained in G.S. 108-30.1, we hold that the petitioner’s lien from its filing became effective and superior to all other liens subsequently acquired for the amount of assistance paid to the recipient from time to time to the same extent that a judgment becomes a general lien on the date it is docketed. Consequently, when the recipient’s property was foreclosed, the petitioner’s lien was transferred to the surplus funds realized from the sale just as the lien of any other junior encumbrancer would be under similar circumstances. In re Gibbs, supra; Chemical Co. v. Brock, supra; Carpenter v. Duke, 144 N.C. 291, 56 S.E. 938; Staton v. Webb, 137 N.C. 35, 49 S.E. 55. See also Demai v. Tart, [102] 221 N.C. 106, 19 S.E. 2d 130; Fraser v. Bean, 96 N.C. 327, 2 S.E. 159, and Long v. Miller, 93 N.C. 227. The contention of the respondent appellee that the sum of $572.73 is in excess of $500.00, the amount a clerk of the Superior Court is permitted to accept under the provisions of G.S. 28-68, is without merit. The provisions of G.S. 28-68 are applicable to a factual situation in no way related to that involved in this appeal. There is no limit on the amount of funds that may be paid to a clerk of the Superior Court pursuant to the provisions of G.S. 45-21.31. But, when a proceeding is instituted pursuant to the provisions of G.S. 45-21.32, to determine who is entitled to such funds, it is the clerk and not the administrator who determines the priority of payments. As a matter of course, when the administrator claims the funds, he is a necessary party to the proceeding. The judgment of the court below is reversed to the end that E. ~W. Price, administrator of the estate of Stephen Rogers, deceased, be ordered and directed to pay to the Clerk of the Superior Court of Lenoir County, the entire surplus in the sum of $572.73, paid to him by Alvin Outlaw, trustee, and that the proceeding be remanded to the aforesaid Clerk for the purpose of entering judgment for the disbursement of said funds as follows: (1) For the payment of funeral expenses; (2) for the payment of the petitioner’s claim, unless it is made to appear that there is a lien outstanding against said funds which is superior thereto; and (3) for the payment of the balance, if any, to the administrator of the deceased, provided no other valid claim or claims are asserted before the said Clerk. The respondent Alvin Outlaw, trustee, by paying the above surplus funds to E. W. Price, administrator, instead of paying them to the Clerk of the Superior Court of Lenoir County, as required by G.S. 45-21.31, will remain liable therefor until such funds are paid to the said Clerk as provided by law. Brown v. Jennings, 188 N.C. 155, 124 S.E. 150. Therefore, let the respondents, Alvin Outlaw, trustee, and E. W. Price, administrator, pay the costs of this appeal, and the administrator any additional costs. G.S. 45-21.32 (d). Reversed and remanded.