Appalachian South, Inc. v. Construction Mortgage Corp.

MALLARD, Chief Judge. The loan commitment referred to in paragraph 2 of the stipulations provided that interest would be charged on the outstanding balance due on the loan at the rate of 7%,% per annum, plus a “service fee” of one-half of one percent per month payable monthly on the outstanding balance. The note, by its terms, was not usurious; however, under Chapter 24 of the General Statutes in effect at the time the loan involved herein was made, the loan commitment, which was made a part of the stipulations, provided on its face for the extracting of more than the specified legal rate for the hire of money allowed at the time and under the circumstances and conditions of this loan. The statutes against usury forbid the extraction or reception of more than the specified legal rate for the hire of money. At the time this loan' was made and paid, the provisions of G.S. 24-8 allowing a corporation to charge as much as 8 per cent interest, under certain circumstances, was not applicable to this transaction because the loan matured within less than five years from the date thereof by the terms of the note. Where the loan is secured by real estate located in North Carolina, the loan is subject to the laws of North Carolina relating to interest and usury. Meroney v. B. and L. Assn., 116 N.C. 882, 21 S.E. 924 (1895). [656] It is said in Kessing v. National Mortgage Corporation, 278 N.C. 523, 180 S.E. 2d 823 (1971), that: “In an action for usury plaintiff must show (1) that there was a loan, (2) that there was an understanding that the money lent would be returned, (3) that for the loan a greater rate of interest than allowed by law was paid, and (4) that there was corrupt intent to take more than the legal rate for the use of the money, (citations omitted) The corrupt intent required to constitute usury is simply the intentional charging of more for money lent than the law allows, (citations omitted) Where the lender intentionally charges the borrower a greater rate of interest than the law allows and his purpose is clearly revealed on the face of the instrument, a corrupt intent to violate the usury law on the part of the lender is shown, (citations omitted) And where there is no dispute as to the facts, the court may declare a transaction usurious as a matter of law. (citation omitted)” The stipulations by the parties judicially admitted: There was a loan of money from defendant to plaintiff; it was to be repaid; the money was for a construction loan on real property situated in Watauga County and secured by a deed of trust thereon; it was due and was repaid within a year after the date thereof; a greater rate of interest than allowed by law was charged and collected; and the interest was charged and collected intentionally. We hold that the trial judge committed error in failing to allow plaintiff’s motion for summary judgment. Kessing v. National Mortgage Corporation, supra. The judgment of the superior court is reversed, and this cause is remanded for further proceedings consistent with this opinion. Reversed and remanded. Judges Campbell and Hedrick concur.