#### GURNEY P. HOOD, Commissioner of Banks of NORTH CAROLINA, ex rel. PLANTERS BANK AND TRUST COMPANY, a Corporation, and R. C. COPPEDGE, Liquidating Agent, PLANTERS BANK AND TRUST COMPANY, v. VANCE McGILL, Tax Collector of the Town of LUMBERTON, P. S. KORNEGAY, Sheriff of ROBESON COUNTY, and the FIDELITY MUTUAL LIFE INSURANCE COMPANY, a Corporation.

(Filed 28 February, 1934.)

Mortgages D b: Banks and Banking H e — Insolvent bank mortgagor held liable for taxes as preferred claim, although mortgagee collected rents.

The mortgagor, the owner of the equitable title to the mortgaged property, is the real owner of the land and is liable for taxes thereon, which liability is unaffected by the mortgagee’s taking peaceable posses*84sion after default and collecting the rents and profits therefrom, and where the mortgagor is a bank, and upon its insolvency, the Commissioner of Banks taking over its assets lists the property for taxes, and the mortgagee takes possession of the mortgaged building and collects the rents therefrom, and thereafter forecloses its mortgage and bids in the property at the sale, it may hold the bank liable for the taxes unpaid at the time of the sale, which is made a preferred claim in the bank’s assets. C. S., 218(c).

Civil ACTION, before Devin, J., at May Term, 1933, of RobesoN.

The agreed facts are substantially as follows:

1. The Planters Bank and Trust Company, a banking corporation in the town of Lumberton, closed its doors on 19 December, 1931, and G-urney P. Hood, Commissioner of Banks of North Carolina, by virtue of his office and the statutes in such cases made and provided, immediately took into his possession all the property and assets of said bank. At the time of the closing the bank owned its banking house by deed registered in Book I-a, page 116, in the office of the register of deeds for Robeson County. The bank had previously executed a deed of trust to the Fidelity Mutual Life Insurance Company to secure an indebtedness of $25,000 and such was outstanding, due and unpaid on the day of its insolvency as aforesaid.

2. Thereafter, on 1 April, 1932, the liquidating agent of the bank duly listed said real estate for taxation for the year 1932 for the following values: lot and building, $55,000; furniture and fixtures, $4,000. Taxes were duly levied upon said values, as follows: Town of Lumber-ton taxes, $885.00; county of Robeson taxes, $436.00.

3. On 1 February, 1932, prior to listing the land for taxes as aforesaid, the defendant, insurance company, “took over the possession and operation of the building . . . and collected the rent thereon through the plaintiff, R. C. Coppedge, and applied the same on its mortgage debt,” and Gurney P. Hood, commissioner of banks, and Coppedge, liquidating agent, assumed no responsibility whatsoever with respect to said building and the possession thereof. Thereafter the plaintiff, Hood, Commissioner, rented one of the rooms in the building from the mortgagee and paid rent therefor.

4. On 5 December, 1932, default having been made in the payment of the indebtedness described in the deed of trust, the insurance company sold the land at public auction in accordance with the terms of the deed of trust, and at said sale became the purchaser of the premises for the sum of $27,000, which said purchase price was duly confirmed and a deed duly executed and delivered. At the sale the trustee announced that the 1932 town taxes and county taxes had not been paid, and that, while the trustee contended that such taxes constituted a preferred claim upon the assets of the bank, he made no warranty or *85assurance of any kind that suck taxes would be paid by tbe liquidating agent, and that tbe purchaser at tbe salé must take tbe risk of paying tbe taxes.

Thereafter, on 7 December, tbe insurance company served a notice on tbe sheriff of Robeson County under O. S., 8006, demanding that tbe personal property of tbe bank be applied to tbe payment of taxes, “calling attention to tbe said sheriff to all tbe notes, mortgages, negotiable instruments and cboses in action then in possession of tbe liquidating agent.” On tbe same day tbe insurance company also served' a like notice upon tbe defendant, James McGill, tax collector for tbe town of Lumberton. Tbe tax collector for tbe county and town of Lumberton contend that they have authority to levy and sell personal property belonging to tbe bank and now in tbe bands of tbe liquidating agent to1 pay said taxes by virtue of O. S., 8003 and O. S., 1985.

Tbe Commissioner of Banks contends that when tbe insurance company, after default, took over tbe property and received tbe rents and thereafter became tbe purchaser at tbe sale, it should be charged with tbe payment of taxes, “and is estopped to claim tbe amount thereof from plaintiffs or their trust.”

At tbe bearing tbe trial judge was of tbe opinion that tbe taxes constituted “a preferred claim against tbe assets of said bank,” etc.

From tbe foregoing judgment plaintiff appealed.

McNeill & McKinnon for 'plaintiff.

F. E. Carlyle for Robeson County.

Johnson & Floycl and, John G. Proctor for tax collector of town of Lumberton.

McLean & Stacy for Fidelity Mutual Life Insurance Company.

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.

*86Tbe 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.