Rosenthal's Bootery, Inc. v. Shavitz

HEDRICK, Judge. The ultimate issue presented by this case is whether the loan in question was usurious. Resolution of this issue depends on whether the loan was made on or before 2 July 1969 since the statute governing interest rates on commercial loans, G.S. § 24-8, was amended effective 2 July 1969. Prior to the effective date of the amendment, the legal interest rate on loans of $30,000 or more to corporations stood at eight percent. The *173 uncontroverted evidence of record before us is that this loan bore interest at the rate of nine percent. Thus, the case can be resolved only by determining when the loan was made. An examination of the judgment entered by the trial judge reveals that the judge made no finding as to this critical issue, i.e., when was this loan made. At a trial before the judge without a jury, it is the duty of the judge to “find the facts specially and state separately his conclusions of law and thereby resolve all controversies between the parties raised by the pleadings and the evidence.” Heating and Air Conditioning Associates, Inc. v. Myerly, 29 N.C. App. 85, 88, 223 S.E. 2d 545, 547, cert. denied and appeal dismissed, 290 N.C. 94, 225 S.E. 2d 323 (1976) (emphasis added); G.S. § 1A-1, Rule 52. The necessity for this requirement is plain: Without such findings and conclusions, the appellate courts cannot determine whether the judge correctly found the facts or applied the law thereto. Jones v. Murdock, 20 N.C. App. 746, 203 S.E. 2d 102 (1974). It appears that Judge Hairston based his conclusion that the loan in this case was not usurious on the finding that the loan was not “closed” until the note was received by defendant “sometime between July 3, 1969 and July 7, 1969, ...” Defendant cites us to Kessing v. National Mortgage Corp., 278 N.C. 523, 180 S.E. 2d 823 (1971), where the Court indeed concluded in a similar situation that a loan was “closed” and “made” on a date subsequent to the statute’s amendment. However, in Kes-sing the parties had done no more than agree to make a loan and approve the application for the loan prior to 2 July 1969. No documents had been executed or exchanged; no checks had been written, delivered or disbursed prior to 8 July 1969. Thus, the Court was able to conclude that the loan was “made” on 9 July 1969, the day the loan agreement was executed. In brief, in Kessing the “closing” date was contemporaneous with the “making” date of the loan. It is not necessary, however, that the actual closing date of this loan be determined, even if such a determination could be made from this record, for it is the making date which controls the ultimate determination whether the loan was usurious. Kessing v. National Mortgage Corp., supra. As the Kessing *174 Court recognized, the making date can certainly precede the actual closing date. It follows that Judge Hairston’s finding that the loan was “closed” after 2 July 1969 is not sufficient to settle the issue whether this loan was usurious. Moreover, the situation presented in the case at bar is readily distinguishable in several particulars from that described in Kessing and, upon remand, in determining the crucial issue of when the loan was made, the court should take into account the following uncon-tradicted facts: 1. The parties negotiated for the loan before 2 July 1969. 2. The check for the loan in the amount of $60,880 was dated 1 July 1969. (In Kessing the check was dated 8 July 1969.) 3. The note evidencing the loan was dated 1 July 1969. (In Kessing the note was dated 9 July 1969.) 4. G.S. § 25-3-114(3) provides: “Where the instrument ... is dated, the date is presumed to be correct.” 5. The defendant charged and the plaintiff paid interest on the loan in advance at the rate of nine percent from 1 July 1969, not from a later date. 6. The first semi-annual installment which was due and payable six months after the making of the note was due 1 January 1970. 7. Thereafter, each successive semi-annual payment was due on either 1 July or 1 January. 8. The loan papers were transmitted to the defendant on or after 2 July 1969. Each of these factors must be weighed to determine the essential factual issue of when this loan was made. For the reasons stated, the judgment is vacated and the cause is remanded to the Superior Court for the judge to find the facts specially from the record evidence as to all the mate *175 rial issues raised by the evidence, state separately the conclusions of law, and enter the appropriate judgment. Vacated and remanded. Judges Martin (Robert M.) and Martin (Harry C.) concur.