Winborne, J.
The question for decision is this: Where bonds regularly issued by a drainage district duly established, organized and existing under and by virtue of chapter 442, Public Laws of 1909, as
amended, subchapter III of chapter 94, section 5312
et seq.,
of Consolidated Statutes of 1919, as amended, pertaining to the establishment of drainage districts, for the payment of which assessments duly made under authority of said act are due and unpaid, may the holder of such bonds maintain an action against an individual owner of land within the district for the foreclosure of the lien of such unpaid assessments? The answer is “No.”
It is noted at the outset that the Legislature has declared: “That the State having authorized the creation of drainage district and having delegated thereto the power of levying a valid tax in furtherance of the public purposes thereof,” such districts “are created for a public use, and are political subdivisions of the State.” Public Laws 1921, chapter 7, section 2, amending C. S., 5360.
It is a basic principle that the legislation by authority of which bonds of a municipal corporation or other political subdivision of the State are issued, and their payment provided for, becomes a constituent part of the contract with the bondholders. So the provisions of the statutes regarding the issuance of drainage bonds and the levying, assessing and collecting of assessments, as well as remedies generally existing for the enforcement of such assessments, in effect at the time the bonds are issued,, become a part of the contract between the district and the bondholders. Jones on Bonds and Bond Securities, sec. 527, Vol. 1, page 590.
What then are the provisions of the statute under which the bonds held by the present plaintiffs were issued, regarding the collection of the assessments levied for the payment of those bonds?
Section 5360 of Consolidated Statutes, as amended, provides that the assessment roll, after the clerk of Superior Court has appended thereto an order directing the collection of such assessments, “shall thereupon have the force and effect of a judgment as in case of State and county taxes.”
Section 5361 of Consolidated Statutes declares in part that: “The assessments shall constitute first and paramount lien, second only to State and county taxes, upon the lands assessed for the payment of the bonds and interest thereon as they become due, and shall be collected in the same manner and by the same officers as the State and county ta^es are collected.”
Adverting to these and other provisions of the drainage act, in the case of
Comrs. v. Lewis,
174 N. C., 528, 94 S. E., 8,
Allen, J.,
said: “The assessments are to be collected by the sheriff, who collects the taxes; they are to be paid over by the sheriff to the county treasurer; they are protected by the bonds of these public officers, and they are the only means provided in the statute for their collection, custody and protection.” See, also,
Canal Co. v. Whitley,
172 N. C., 100, 90 S. E., 1.
Tbe statutes relating to sale of real estate for the nonpayment of taxes wbicb are a lien thereon shall be made by the sheriff or other tax collecting officer, C. S., 8010, who issues to the purchaser a written certificate of sale. C. S., 8024. The county, municipality or individual holder of such certificate of sale may in due time foreclose the lien of such certificate under the provisions of C. S., 8037.
Guilford County v. Estates Administration, Inc.,
213 N. C., 763, 197 S. E., 535.
However, the county or municipality levying taxes or assessments which are a lien upon real estate may at its election proceed under the provisions of C. S., 7990 to enforce the lien in an action in the nature of an action to foreclose a mortgage in which the court shall order a sale of the real estate.
Wilmington v. Moore,
170 N. C., 52, 86 S. E., 775;
Cherokee v. McClelland,
179 N. C., 127, 101 S. E., 492.
The right of a drainage district to so proceed in its own name is recognized in
Drainage District v. Huffstetler,
173 N. C., 523, 92 S. E., 368;
Commission v. Epley,
190 N. C., 672, 130 S. E., 497.
“Throughout all the authorities a clear distinction seems to run between the cases where a private plaintiff brings an action to compel and levy the collection of taxes to pay a debt due him, and where the sovereign seeks to collect its own taxes for the general purpose of government. The citizen has only such remedies as are given to him; the State has inherently all remedies not voluntarily and unequivocally relinquished.”
State and Guilford County v. The Georgia Co.,
112 N. C., 35, 17 S. E., 10.
The provisions of C. S., 7990, are only available to a private individual or a private corporation “holding a certificate of tax sale or deed under a tax sale, whether as original purchaser at a tax sale or as assignee of the county or other municipal corporation or of any other holder thereof.”
The remedies provided for the collection of taxes are adequate. Speaking thereto in
Cherokee v. McClelland, supra, Hoke, J.,
said:. “The laws of the State make comprehensive provision for the collection of public revenues affording to the officers charged with the duty adequate remedies for the purpose, both by action and by summary proceeding.”
This Court has considered the drainage act in many decisions. It is held that the lien of drainage assessment does not arise
ex contractu,
and is not a debt of the owner of land in the drainage district, but is a charge solely upon the land.
Pate v. Banks,
178 N. C., 139, 100 S. E., 251;
Canal Co. v. Whitley, supra; Drainage Co. v. Huffstetler, supra; Comrs. v. Sparks,
179 N. C., 581, 103 S. E., 142;
Com. v. Epley, supra; Foil v. Drainage Com.,
192 N. C., 652, 135 S. E., 781;
Branch v. Saunders,
195 N. C., 176, 141 S. E., 583.
It bas also been held that the moneys collected from drainage assessments, although devoted to the definite purpose of paying the principal and interest of drainage bonds issued under authority of the drainage act, are public funds.
Comrs. v. Lewis, supra.
“The bonds issued for the improvement of the district, like bonds issued for public roads or other purposes, become an indebtedness of the district and not of any landowner therein. . . . They are a ‘public charge’ which falls upon the land in the district
in rem
and are to be collected in the same manner as all other public charges.”
Clark, C. J.,
in
Pate v. Banks, supra.
The drainage act under which the bonds in question here were issued provides in part that: “If any installment of principal or interest represented by.
Free access — add to your briefcase to read the full text and ask questions with AI
Winborne, J.
The question for decision is this: Where bonds regularly issued by a drainage district duly established, organized and existing under and by virtue of chapter 442, Public Laws of 1909, as
amended, subchapter III of chapter 94, section 5312
et seq.,
of Consolidated Statutes of 1919, as amended, pertaining to the establishment of drainage districts, for the payment of which assessments duly made under authority of said act are due and unpaid, may the holder of such bonds maintain an action against an individual owner of land within the district for the foreclosure of the lien of such unpaid assessments? The answer is “No.”
It is noted at the outset that the Legislature has declared: “That the State having authorized the creation of drainage district and having delegated thereto the power of levying a valid tax in furtherance of the public purposes thereof,” such districts “are created for a public use, and are political subdivisions of the State.” Public Laws 1921, chapter 7, section 2, amending C. S., 5360.
It is a basic principle that the legislation by authority of which bonds of a municipal corporation or other political subdivision of the State are issued, and their payment provided for, becomes a constituent part of the contract with the bondholders. So the provisions of the statutes regarding the issuance of drainage bonds and the levying, assessing and collecting of assessments, as well as remedies generally existing for the enforcement of such assessments, in effect at the time the bonds are issued,, become a part of the contract between the district and the bondholders. Jones on Bonds and Bond Securities, sec. 527, Vol. 1, page 590.
What then are the provisions of the statute under which the bonds held by the present plaintiffs were issued, regarding the collection of the assessments levied for the payment of those bonds?
Section 5360 of Consolidated Statutes, as amended, provides that the assessment roll, after the clerk of Superior Court has appended thereto an order directing the collection of such assessments, “shall thereupon have the force and effect of a judgment as in case of State and county taxes.”
Section 5361 of Consolidated Statutes declares in part that: “The assessments shall constitute first and paramount lien, second only to State and county taxes, upon the lands assessed for the payment of the bonds and interest thereon as they become due, and shall be collected in the same manner and by the same officers as the State and county ta^es are collected.”
Adverting to these and other provisions of the drainage act, in the case of
Comrs. v. Lewis,
174 N. C., 528, 94 S. E., 8,
Allen, J.,
said: “The assessments are to be collected by the sheriff, who collects the taxes; they are to be paid over by the sheriff to the county treasurer; they are protected by the bonds of these public officers, and they are the only means provided in the statute for their collection, custody and protection.” See, also,
Canal Co. v. Whitley,
172 N. C., 100, 90 S. E., 1.
Tbe statutes relating to sale of real estate for the nonpayment of taxes wbicb are a lien thereon shall be made by the sheriff or other tax collecting officer, C. S., 8010, who issues to the purchaser a written certificate of sale. C. S., 8024. The county, municipality or individual holder of such certificate of sale may in due time foreclose the lien of such certificate under the provisions of C. S., 8037.
Guilford County v. Estates Administration, Inc.,
213 N. C., 763, 197 S. E., 535.
However, the county or municipality levying taxes or assessments which are a lien upon real estate may at its election proceed under the provisions of C. S., 7990 to enforce the lien in an action in the nature of an action to foreclose a mortgage in which the court shall order a sale of the real estate.
Wilmington v. Moore,
170 N. C., 52, 86 S. E., 775;
Cherokee v. McClelland,
179 N. C., 127, 101 S. E., 492.
The right of a drainage district to so proceed in its own name is recognized in
Drainage District v. Huffstetler,
173 N. C., 523, 92 S. E., 368;
Commission v. Epley,
190 N. C., 672, 130 S. E., 497.
“Throughout all the authorities a clear distinction seems to run between the cases where a private plaintiff brings an action to compel and levy the collection of taxes to pay a debt due him, and where the sovereign seeks to collect its own taxes for the general purpose of government. The citizen has only such remedies as are given to him; the State has inherently all remedies not voluntarily and unequivocally relinquished.”
State and Guilford County v. The Georgia Co.,
112 N. C., 35, 17 S. E., 10.
The provisions of C. S., 7990, are only available to a private individual or a private corporation “holding a certificate of tax sale or deed under a tax sale, whether as original purchaser at a tax sale or as assignee of the county or other municipal corporation or of any other holder thereof.”
The remedies provided for the collection of taxes are adequate. Speaking thereto in
Cherokee v. McClelland, supra, Hoke, J.,
said:. “The laws of the State make comprehensive provision for the collection of public revenues affording to the officers charged with the duty adequate remedies for the purpose, both by action and by summary proceeding.”
This Court has considered the drainage act in many decisions. It is held that the lien of drainage assessment does not arise
ex contractu,
and is not a debt of the owner of land in the drainage district, but is a charge solely upon the land.
Pate v. Banks,
178 N. C., 139, 100 S. E., 251;
Canal Co. v. Whitley, supra; Drainage Co. v. Huffstetler, supra; Comrs. v. Sparks,
179 N. C., 581, 103 S. E., 142;
Com. v. Epley, supra; Foil v. Drainage Com.,
192 N. C., 652, 135 S. E., 781;
Branch v. Saunders,
195 N. C., 176, 141 S. E., 583.
It bas also been held that the moneys collected from drainage assessments, although devoted to the definite purpose of paying the principal and interest of drainage bonds issued under authority of the drainage act, are public funds.
Comrs. v. Lewis, supra.
“The bonds issued for the improvement of the district, like bonds issued for public roads or other purposes, become an indebtedness of the district and not of any landowner therein. . . . They are a ‘public charge’ which falls upon the land in the district
in rem
and are to be collected in the same manner as all other public charges.”
Clark, C. J.,
in
Pate v. Banks, supra.
The drainage act under which the bonds in question here were issued provides in part that: “If any installment of principal or interest represented by. the bonds shall not be paid at the time and in the manner when the same shall become due and payable, and such default shall continue for a period of six months, the holders of such bonds upon which default has been made may have a right of action against the drainage district or the board of drainage commissioners of the district wherein the court may issue a writ of
mandamus
against the drainage district, its officers, including the tax collector and treasurer, directing the levying of a tax or special assessment as herein provided, and the collection of same . . . and such other remedies are hereby vested in the holders of such bonds in default as may be authorized by law; and the right of action is hereby vested in the holders of such bonds upon which default has been made authorizing them to institute suit against any officer on his official bond for failure to perform any duty imposed by the provisions of this subchapter. The official bonds of the tax collector and county treasurer shall be liable for the faithful performance of the duties herein assigned.” C. S., 5356.
No other remedy is given by statute to the holders of such bonds in default. Hence, the remedies provided are exclusive.
In
Bar Association v. Strickland,
200 N. C., 630, 158 S. E., 110,
Brogden, J.,
said: “The courts everywhere are in accord upon the proposition that if a valid statutory method of determining a disputed question has been established, such remedy so provided is exclusive and must be first resorted to and in the manner specified therein.” This principle was quoted with approval in
Maxwell, Comr., v. Hinsdale,
207 N. C., 37, 175 S. E., 847, and applied in
Rigsbee v. Brogden,
209 N. C., 510, 184 S. E., 24.
Applying these principles -to the case in hand, it clearly appears that the holders of bonds in default may not by direct action against the landowner proceed to enforce the lien of drainage assessment on his land, but must resort to the remedies provided in the statute.
There are cases in other jurisdictions sustaining the right of the holder of an improvement bond to maintain an action to foreclose on assessment lien, but, in such cases which have come to our attention, the right is derived from grant of specific legislative authority.
The judgment helow is
Affirmed.