Parks v. E. N. Beard Hardwood Lumber, Inc.

Conley Byrd, Justice. Appellee E. N. Beard Hardwood Lumber, Inc. of Greensboro, North Carolina, brought this action against appellant Glenn A. Parks, d/b/a Parks Products Company, for the $10,484.82 balance due upon an open account for lumber received by appellant on April 20, 1976, and April 27, 1976. Invoice # 5130, dated April 20, 1976, in the amount of $6,615.27 provided terms of “2% 10 net 30”. At the bottom of the invoice is this notation: “interest charges of 1% per month (12% per annum) on all amounts over 60 days.” Invoice # 5202 dated April 27, 1976, in the amount of $5,324.81 carried the same notation. On May 28, 1976, appellant was eiven credit for a payment in the amount of $955.26. On August 31, 1976, when the outstanding balance due was $10,984.82, appellee charged appellant with interest in the amount of $109.85. On September 7, 1976, appellant paid $500 and on September 20, 1976, paid the interest charge of $109.85. On October 30, 1976, when the outstanding balance was $10,484.82, appellee again charged appellant with interest in the amount of $104.85. Appellant answered contending that the account violated the 10% usury provision of the Arkansas Constitution. The trial court, after determining that the interest charged did not exceed 10%, entered a summary judgment in favor of appellee. We affirm. Sixty days from April 20, 1976, would be June 19, 1976. On that date the balance owing on invoice #5130 would be ($6,615.27 — $955.26) $5,660.01. Interest on $5,660.01 from June 19 to August 31, 1976 at 10% per annum would be (73 days times $1.5506876 daily interest) $113.20. Sixty days from April 27, 1976, the date of invoice # 5202 would be June 26, 1976. On that date the balance owing on invoice # 5202 was $5,324.81. Interest on $5,324.81 from June 26th to August 31st at 10% per annum would be (66 days times the daily interest in the amount of $1.458852) $96.28. Consequently, the allowable interest on August 31, 1976 at 10% per annum upon the outstanding balance due on invoices would have been ($113.20 plus $96.28) $209.48. The allowable interest on the outstanding balances due from August 31st to September 7, 1976, when appellant made a $500 payment would have been ($5,660.01 plus $5,324.81 times 10% divided by 365 times 7 days equals) $21.07. After the $500 payment on September 7, 1976, the outstanding principal balance was $10,484.82. There are 53 days from September 7, 1976 to October 30, 1976 (the last interest charge date). The allowable interest for that period would be ($10,484.82 times 10% divided by 365 times 53 equals) $152.25. From the foregoing computations it is evident that appellee, within the limits of the usury law, could have legally charged interest in the amount of $382.80. Since this is an open account and the total interest charged to the account by appellee was only $214.70, it follows that the trial court was correct in holding that appellee had not violated Arkansas’ prohibition against usury. Affirmed. Fogleman and Hickman, JJ., concur. Howard, J., dissents.