Morley v. Morley ( 1991 )

LEWIS, Judge.

Jurisdiction

Though neither party raises the issue, the dissent finds this Court without jurisdiction. We believe the case is properly before us.

The only dispute in this case is how to compute the interest on the judgment by Judge Snepp which was filed in the clerk’s office on 30 September 1990. After the judgment was filed and $29,245.00 was paid into the clerk’s office on 3 October 1986, the clerk applied all of the payment to principal, allocating none to the $3,006.22 then due and owing in interest. Later on 23 March 1988, the defendant tendered the $3,006.22 as full interest due. The plaintiff wrote the clerk informing him that additional interest was due. The record contains a letter from the clerk to the plaintiff containing in part, the following: “[a]s I disagree with your definition [of simple interest], I feel it imperative that you bring this matter before the Superior Court Judge for an order to settle our differences.”

The plaintiff filed a motion asking the Superior Court to determine the amount of interest due on the judgment. The motion was calendared before Judge Owens, Resident Superior Court Judge in Henderson County, at the request of the defendant. The motion was heard on 21 August 1989. Judge Owens signed a judgment 28 December 1989 which was filed 5 January 1990. The judgment ordered the defendant to pay the plaintiff an additional $350.28.

Although the motion filed by the plaintiff also asked the court to require the clerk to issue execution, the motion in its final prayer to the court only asked the court to determine the amount of interest due. The amount of interest due would determine if the defendant owed an additional amount of money to the plaintiff. Thus, the court’s final decision impacted both named parties. In his order, Judge Owens did not require execution on the judgment but only addressed the issue of the amount of interest due on the judgment, as that was the issue in controversy. Therefore, we note that this case does not involve an appeal of a refusal of the clerk to issue execution, but instead, a dispute over the correct way to calculate interest. See Huntley v. Hasty, 132 N.C. 279, 43 S.E. 844 (1903). We also note that we need not address whether the plaintiff properly appealed from a judgment of the clerk in compliance with N.C.G.S. § 1-272, as we do not consider the clerk’s calculations to be an “order or judgment of the clerk.”

We are mindful of Home Health and Hospice Care, Inc. v. Meyer, 88 N.C. App. 257, 362 S.E.2d 870 (1987) (holding that a Superior Court judge had no authority to construe or interpret a specific provision of a consent judgment pursuant to defendants’ motion in the cause), but find it distinguishable. Here, the Superior Court Judge answered a question of law as to how the clerk of superior court should calculate interest on judgments. Although the duty to keep record of judgments owing lies first with the clerk pursuant to Chapter 7A of the North Carolina General Statutes, when a dispute arises over the correct method that the clerk should implement such a commonly performed ministerial duty, recourse should be available to the plaintiff to return to Superior Court to construe the order. We are well aware that no judge can change, abrogate or overrule another judge of the same court. This case does not involve such action.

The Proper Method of Calculation

The defendant contends that the trial court erred in allowing the plaintiff to collect “interest on interest.” The trial judge ordered that the original order, requiring interest of eight percent per annum, included an additional $350.28 covering the interest due on the remaining balance. This case presents us with a question of how one should allocate the funds when payment is made on a debt which has accumulated interest but the payment is not high enough to satisfy the principal and interest. The defendant claims that since the payment on 3 October 1986 was equivalent to the principal amount originally due ($29,245.00), that such payment should halt the accrual of interest. We disagree. In order to encourage debtors to pay the entire amount due and in the interest of fairness, when payments are made on a judgment debt, the clerk should first allocate the payment to the interest due. The remainder of the payment should be allocated to the principal. In the case at hand, we find the following calculations to be the correct manner:

Due June 21, 1985.$29,245.00 (interest begins accruing)

Due October 3, 1986.$32,251.22

($29,245.00 principal & $3,006.22 interest: 469 days total interest at $6.409863 per day = $3,006.2257 in interest)

October 3, 1986 defendant paid.$29,245.00

(allocate $3,006.22 to the interest on total debt and allocate remaining $26,238.78 to principal, leaving $3,006.22 in principal on which interest begins accruing)

Due March 23, 1988.$3,359.38

($3,006.22 principal & $353.16 interest: 536 days total interest at $.6588975 per day = $353.16906 in interest)

March 23, 1988 defendant paid.$3,006.22

(allocate $353.16 to interest on the debt and allocate remaining $2653.06 to principal, leaving $353.16 in principal on which interest begins accruing)

The trial court’s ruling that $350.28 balance due remained owing is within three dollars of our calculations. We hold that the difference is negligible and perhaps due to the factoring in of a leap year or calculating to the nearest decimal. Thus, we affirm the trial court’s ruling.

The defendant contends that the trial court failed to make the required findings of fact and thus, made an unsubstantiated conclusion of law. We hold that the finding that $350.28 was due and owing was sufficient.

Affirmed.

Judge WYNN concurs. Chief Judge HEDRICK dissents.