#### AMERICAN AGRICULTURAL CHEMICAL COMPANY v. W. A. BROCK.

(Filed 19 February, 1930.)

Taxation D a — Where assessment of property for taxes has not been made at time of foreclosure, proceeds from sale are not liable therefor.

Construing C. S., 2815, providing that tbe lien for taxes attaches to realty annually on the first of May, with C. S., 7980, requiring the one selling lands under foreclosure sale of a mortgage or deed of trust to pay all taxes then assessed against the property out of the proceeds, it is *held:*where the taxes have not been assessed nor the tax rate ascertained under the provisions of the County Fiscal Control Act until after the foreclosure sale has been made, the proceeds or surplus from the foreclosure sale are not subject to the payment of the taxes, and the lien of a judgment creditor of the mortgagor is payable out of the surplus from the sale without deducting the amount of the taxes, and the taxes later assessed attach to the land in the hands of the purchaser at the foreclosure sale, although they attach to the land as of the first of May.

Appeal by defendant from *Sinclair, J.,*at November Term, 1929, of PasquotaNK.

Affirmed.

Special proceeding instituted under O. S., 2593, to determine tbe question of tbe plaintiffs right to a fund paid into tbe office of tbe clerk as tbe surplus remaining after payment of tbe amount due on a deed of trust executed by *W.*H. Jennette and L. B. Jennette and tbeir wives to tbe Southern Trust Company to secure an indebtedness of $12,000. Tbe plaintiff claims that it is entitled to tbe fund in question by virtue of a judgment recovered against tbe makers of tbe deed of trust and docketed after its registration. A jury trial was waived and by consent of parties tbe trial judge found tbe following to be tbe facts: There is now in tbe bands of tbe clerk of tbe Superior Court of Pasquo-tank County tbe sum of $1,456.91, representing tbe surplus formerly held by tbe trustee from tbe sale of the warehouse under tbe deed of trust described in tbe petition herein, which deed of trust was recorded in said county on 2 July, 1923. After several raises in tbe bid under foreclosure proceedings, a final resale was held, and said property was struck off and sold to defendant ’and three other parties, as set out in tbe answer herein, on 19 May, 1928. An order of confirmation of said sale was entered by tbe clerk of tbe Superior Court of said county on 2 June, 1928, and tbe trustee was therein directed to make title for said property to tbe purchasers. A deed dated 9 June, 1928, acknowledged 2 July, 1928, was delivered to tbe defendant by tbe trustee on 3 July, 1928, tbe defendant having become tbe assignee of tbe bid of tbe other three purchasers on 19 June, 1928. Tbe county commissioners of Pas-quotank County at a special meeting held on 28 July, 1928, determined *343tbe tax rate for Pasquotank County for tbe tax year 1928-29, and levied upon all tbe taxable property of Pasquotank County. Tbe board of aldermen of Elizabeth City, it being tbe proper agency so to do, on 23 July, 1929, determined tbe tax rate for Elizabeth City for tbe tax year 1928-29, and levied upon all taxable property within said town.

At tbe time of tbe sale referred to above, confirmation thereof, and delivery of tbe deed to defendant, no tax rate bad been determined by tbe said county 'or city authorities for said year, 1928. On 3 October, 1927, a judgment was duly rendered in tbe Superior Court of Pasquo-tank County in favor of the plaintiff herein and against tbe said *W.*H. and L. B. Jennette for tbe sum of $1,499.46 and costs, said judgment being properly cross-indexed and docketed on tbe same day as rendered, in tbe office of tbe clerk of tbe Superior Court of said county. Said judgment has not been either wholly or partially paid or satisfied, and is now, and was at tbe times hereinbefore mentioned, a validly existing lien on all of tbe real estate of tbe said *W.*PC. and L. B. Jennette, tbe lien of said judgment being immediately subsequent to tbe lien of said deed of trust, except in so far as tbe lien for city and county taxes for tbe tax years 1927-28, 1928-29, and certain paving assessments hereinafter referred to, intervene. Tbe amount of said county and city taxes due on said property for tbe year 1928-29 is $522.43. Neither of said judgment debtors has ever bad a homestead allotted to him, and both are, and were at all times referred to herein, residents of North Carolina. Neither of said judgment debtors claims any interest in said fund, but neither of said judgment debtors has ever conveyed or assigned any interest be might have in said funds.

It was agreed by tbe parties that tbe city and county taxes for 1927 ($617.22) and tbe paving assessments ($93.16) should be paid out of tbe fund in tbe bands of tbe clerk. It was thereupon adjudged that at tbe time of tbe sale and confirmation, and of delivery of tbe deed to defendant, no taxes for tbe city or county bad been assessed for tbe tax year 1928-29; that no levy of said tax bad been made by tbe authorities of tbe city or county; that tbe plaintiff’s petition ought to be allowed; that tbe taxes for 1928, are not a proper charge against tbe fund in tbe bands of tbe clerk; and that this fund be applied as a payment on tbe plaintiff’s judgment. Tbe defendant excepted and appealed.

*McMullan & LeRoy for plaintiff.*

*Ehringhaus & Hall for defendant.*

Adams, J.

Tbe deed of trust was executed on 1 July, 1923, and was duly registered tbe next day. Tbe plaintiff’s judgment was recovered and docketed on 3 October, 1927. Tbe property described in tbe deed *344o£ trust was first exposed to sale in February, 1928, but was finally sold on 19 May, 1928. On 2 June, 1928, tbe clerk issued an order requiring tbe trustee to make title to tbe purchaser; tbe trustee executed bis deed on 9 June, 1928, acknowledged it on 2 July, 1928, and delivered it to tbe defendant on 3 July, 1928. After paying tbe amount due on tbe deed of trust tbe trustee beld a surplus, tbe application of wbicb was disputed, and being in doubt as to tbe parties entitled to it, be brought this proceeding under C. S., 2592 *et seq.,*for tbe purpose of having tbe proper party finally determined. Tbe clerk made an order that tbe surplus be paid on tbe plaintiff’s claim and on appeal to tbe Superior Court bis judgment was affirmed.

It is provided in C. S., 7987, that tbe lien of State, county and municipal taxes shall annually attach to all real estate of tbe taxpayer on tbe first day of June, but it is likewise provided in C. S., 2815, and in Public Laws 1927, cb. 80, sec. 440, that tbe lien shall attach annually on tbe first day of May; and it was beld in *Shaffner v. Lipinsky,*194 N. C., 1, that tbe lien of assessed taxes attaches to real estate as of this date.

In C. S., 7980, provision is made for adjusting tbe rights of contesting parties: “In all civil actions and special proceedings wherein tbe sale of any real estate shall be ordered, tbe judgment shall provide for tbe payment of all taxes then assessed upon tbe property and remaining unpaid. . . . And whenever any real estate shall be sold by any person under any power of sale conferred upon him by any deed, will, power of attorney, mortgage, deed of trust, or assignment for tbe benefit of creditors, tbe person making such sale must pay out of tbe proceeds of such sale all taxes then assessed upon such real estate,” etc.

Tbe defendant contends that tbe lien of tbe State, county, and municipal taxes levied for tbe calendar year 1928-29 attached to all real estate described in tbe deed of trust on tbe first day of May, 1928; that this is tbe first lien on tbe land; and that it should be satisfied out of tbe fund arising from tbe sale of tbe property in preference to tbe lien created by tbe docketed judgment. Tbe plaintiff contends that tbe board of county commissioners did not levy any tax until 28 July, 1928 (C. S., 7971(40), that no tax bad been assessed against tbe real property at that time, and that C. S., 7980, provides for tbe payment of such taxes only as are assessed upon tbe property and remain unpaid at tbe date of tbe sale. These diverse contentions present tbe question in controversy.

Tbe County Fiscal Control Act went into effect on 7 March, 1927. P. L., 1927, cb. 146. It requires tbe board of county commissioners to appoint an accountant who shall prepare an estimate of tbe amounts *345necessary to be appropriated to different objects of tbe county and its subdivisions for the next ensuing fiscal year. After the accountant submits his budget estimate the board, not later than the fourth Monday in July in each year, must adopt and record on its minutes an appropriation resolution by which appropriations shall be made for the several purposes of the county, and not later than Wednesday after the third Monday in August in each year and after the ascertainment of the assessed valuation of property for taxation the board must levy such rate of tax as shall be necessary upon all the taxable property of the county, in the ease of county appropriations, and upon all the taxable property in each subdivision, in the case of appropriations for subdivisions. Secs. 10, 11, 12. Under these provisions the board of aldermen determined the tax rate and levied upon the taxable property in the city on 23 July, 1928, and on 28 July, 1928, the board of county commissioners made a like assessment upon property within the county.

If the uncomputed and unassessed tax was a lien upon the land at the time of the trustee’s sale the tax lien was superior to the lien created by the deed of trust or the plaintiff’s judgment. And as the purchaser’s title relates back to the date of the deed of trust the land may yet be subject to a sale under the tax lien unless the defendant’s contention that it should be paid out of the fund is correct in contemplation of law, especially in view of the holding that the object of C. S., 1980, is to pass a clear title to the purchaser. *Wooten v. Sugg,*114 N. C., 295; *Exum v. Baker,*115 N. C., 242; *Smith v. Miller,*158 N. C., 99, 103.

Was the uncomputed and unassessed tax a lien on the surplus fund when the clerk ordered the trustee to execute a deed to the purchaser? We think not. The statute contemplates the payment, out of the proceeds of the sale, of such taxes as are assessed when the sale is made. C. S., 7980. 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. The judgment sets out the fact that no tax had been levied or assessed when the trustee executed his deed. It was impossible for the trustee to pay a tax which had never been levied, and the parties claimed a right to an immediate distribution of the fund. The defendant’s contention involves, not only uncertainty as to the amount of tax to be levied, but indefinite delay in settlement by the trustee. For the purpose of attaching to and following the land the lien of the tax when assessed and levied relates back to the first day of May; but the proceeds of a sale made under section 7980 may be applied to such taxes only as are assessed when the sale is made. We are not inadvertent to *346tbe difficulties arising from statutes wbicb are not easily to be reconciled, but we are of opinion that our disposition of tbe question conforms to tbe spirit of tbe law. Tbe judgment debtors claim no interest in tbe fund and are not proper parties. Tbe interests are those only of tbe plaintiff and tbe defendant. Tbe judgment is

Affirmed.