Ausband v. Wachovia Bank & Trust Co.

194 S.E.2d 160, 17 N.C. App. 325, 1973 N.C. App. LEXIS 1347

• Court: Court of Appeals of North Carolina
• Decided: January 31, 1973
• Docket: No. 7321SC36
• Status: Published

Opinion

VAUGHN, Judge.

The only question presented is whether the trial court erred when it failed to hold that the provision in the forbearance agreement for the payment of 9% per annum interest called for the payment of usury. We hold that it did not.

On 24 March 1969, when the note was executed and was endorsed by Frank C. Ausband and guaranteed by Virginia C. Ausband, the maximum lawful rate of interest thereon was 6% per annum. G.S. 24-1.

On 2 July 1969, a new section, G.S. 24-1.1, became effective. Among other things this section provides that “ . . . the parties to a loan, purchase money loan, advance or forbearance (emphasis supplied) may contract in writing. . . ” for the payment of interest not in excess of the rates therein set forth. - The maximum rate for a loan or forbearance as set out in the forbearance agreement involved in this law suit is 9% per annum. G.S. 24-1.1(3).

The forbearance agreement having been executed after the effective.date of G.S. 24-1.1, the provision calling for the payment of interest at the rate of 9% per annum is not usurious. Plaintiffs contend that the note they guaranteed was executed prior to'2 July 1969 and that G.S. 24-1.1 has no application to loans made prior to that date. In this they are correct. The suit here, however, involves a new agreement entered into after the effective date of G.S. 24-1.1 and the lawful interest allowed is governed by that section.

Affirmed.

Judges Britt and Parker concur.