Chemical Realty Corp. v. HOME FEDERAL SAV.

310 S.E.2d 33 (1983)

65 N.C. App. 242

CHEMICAL REALTY CORPORATION v. HOME FEDERAL SAVINGS AND LOAN ASSOCIATION OF HOLLYWOOD.

No. 8228SC1265.

Court of Appeals of North Carolina.

December 6, 1983.

*36 Grier, Parker, Poe, Thompson, Bernstein, Gage & Preston by Sydnor Thompson, Fred T. Lowrance, and Sally Nan Barber, Herbert *37 Hyde, Van Winkle, Buck, Wall, Starnes & Davis by Larry McDevitt, Asheville, for plaintiff.

McCoy, Weaver, Wiggins, Cleveland & Raper by John E. Raper, Jr. and Richard M. Wiggins, Fayetteville, and Redmond, Stevens, Loftin & Currie by John S. Stevens and Thomas R. West, Asheville, for defendant.

WELLS, Judge.

Plaintiff first contends that the trial court erred in failing to find and conclude that a contract existed between plaintiff and defendant. Plaintiff also contends that the trial court should have found and concluded that it was a third party beneficiary of defendant's permanent loan commitment. We hold that the trial court did not adequately address these issues.[1]

G.S. § 1A-1, Rule 52(a)(1) of the Rules of Civil Procedure requires a trial judge hearing a case without a jury to make findings of fact and conclusions of law. To comport with Rule 52(a)(1), the trial court must make "a specific statement of the facts on which the rights of the parties are to be determined, and those findings must be sufficiently specific to enable an appellate court to review the decision and test the correctness of the judgment." Quick v. Quick, 305 N.C. 446, 290 S.E.2d 653 (1982) (citation omitted). Rule 52(a)(1) does not require recitation of evidentiary facts, but it does require specific findings on the ultimate facts established by the evidence, admissions and stipulations which are determinative of the questions involved in the action and essential to support the conclusions of law reached. Id. See also Farmers Bank v. Michael T. Brown Distributors, Inc., 307 N.C. 342, 298 S.E.2d 357 (1983).

Although the letter written by Home Federal to Chemical appears from an agreement supported by consideration by Home Federal to purchase Chemical's construction loan upon compliance with certain conditions precedent, the trial court's only finding of fact with respect to the letter was that "Home Federal, by Wohl, executed an undated letter being Defendant's Exhibit 154 for identification purposes." This finding is an evidentiary fact, not an ultimate fact. The trial court failed to make any finding of fact regarding whether defendant owed any contractual duty to plaintiff. Such findings are necessary to a valid judgment in this action. As the North Carolina Supreme Court has stated,

Effective appellate review of an order entered by a trial court sitting without a jury is largely dependent upon the specificity by which the order's rationale is articulated. Evidence must support findings; findings must support conclusions; conclusions must support the judgment. Each step of the progression must be taken by the trial judge, in logical sequence; each link in the chain of reasoning must appear in the order itself. Where there is a gap, it cannot be determined on appeal whether the trial court correctly exercised its function to find the facts and apply the law thereto.

Coble v. Coble, 300 N.C. 708, 268 S.E.2d 185 (1980).

Although the trial court's order contains more than forty-one separate findings of fact,[2] the evidence, stipulations, and pleadings in the instant case present questions of fact which were ignored in those findings, but which must be resolved before judgment can be entered. On remand, the following *38 issues should be resolved by proper findings and conclusions.

(1) Was there a promise by defendant, supported by consideration, to plaintiff to purchase plaintiff's construction loan?

(2) If defendant made no promise, did defendant's actions provide the basis for plaintiff to become a creditor beneficiary of defendant's permanent loan commitment?

(3) If plaintiff contracted with defendant, or had third party beneficiary status, what were the conditions precedent and material terms that had to be complied with before defendant's duty to plaintiff to perform arose?

(4) Were those terms and conditions substantially complied with?

(5) If Landmark and/or plaintiff had not fulfilled the conditions precedent and material terms on 14 October 1974, did plaintiff timely request defendant to extend the permanent loan commitment beyond 14 October 1974?

(6) If plaintiff did make a timely request to extend the permanent loan commitment, to what extent did plaintiff incur foreseeable and ascertainable damages by defendant's refusal to extend?

Defendant contends that even if the trial court failed to make all the necessary findings arising under the evidence, the findings it made adverse to plaintiff and supported by the evidence are sufficient to sustain the trial court's conclusions and judgment. We cannot agree. The trial court's findings having failed to address crucial aspects of the rights and obligations of the parties arising upon the evidence, we can make no assumptions as to what the result will be when the evidence in the case is properly sifted, addressed, and treated at the trial level.

The parties to this appeal have submitted extensive briefs; plaintiff has brought forward a number of exceptions we have not addressed; but we perceive that it would be untimely and unproductive for us to deal with plaintiff's other exceptions because of the obvious need for the heart of this case to be reconsidered at the trial level.

Because we perceive there are no questions raised in the appeal as to admission of evidence or credibility of witnesses, we conclude that it is unnecessary to order a new trial, and that the case may be properly considered on remand on the existing record.

For the reasons stated, the judgment of the trial court must be reversed and the case remanded for further proceedings consistent with this opinion.

Reversed and remanded.

VAUGHN, C.J., and JOHNSON, J., concur.

NOTES

[1] In Chemical Realty Corp. v. Home Federal Savings & Loan Association of Hollywood, 40 N.C.App. 675, 253 S.E.2d 621, disc. rev. denied and app. dismissed, 297 N.C. 612, 257 S.E.2d 435 (1979), app. dismissed, 444 U.S. 1061, 100 S. Ct. 1000, 62 L. Ed. 2d 744 (1980), we upheld the trial court findings that a contract existed between Home Federal and Landmark. These findings were made solely to establish jurisdiction over the defendant, do not go to the merits of this case or determine the contractual rights of plaintiff and defendant, and therefore do not constitute the law of the case on the respective contractual rights or obligations of plaintiff and defendant.

[2] We note that some of the trial court's purported conclusions of law are only additional findings of fact.