
197 S.E.2d 256 (1973)
18 N.C. App. 506
ARGO AIR, INC.
v.
Leroy SCOTT, Trustee, et al.
No. 732SC113.
Court of Appeals of North Carolina.
June 27, 1973.
*258 Gordon B. Kelley, Raleigh, for plaintiff appellee.
Gerrans & Spence by William D. Spence, Kinston, for defendant appellants.
Turner & Harrison by Fred W. Harrison, Kinston, for defendant appellants.
BRITT, Judge.
Defendants assign as error the failure of the court to allow their motions to dismiss interposed at the conclusion of the evidence. We hold that the evidence was sufficient to survive the motions.
By proper assignments of error, defendants contend (1) that the facts found by the court do not support its conclusion that the rate of interest charged by defendants Gintis and Watman was usurious, and (2) that the facts found do not support the judgment. The assignments of error are sustained.
Crucial to a determination of this case is the position occupied by the broker, Bartlett. Was he acting as the agent of plaintiff in negotiating the loan or was he acting as the agent of defendant Gintis? *259 In the final pretrial order, the parties agreed that this was an issue but the court did not make the determination.
In 12 Am.Jur.2d, Brokers, § 31, pp. 795-796, we find: "A brokerage relationship is created by a contract between the parties, the elements of which are those that enter into the formation of any contract. There must be consideration, mutuality, and a meeting of the minds as to essential matters. The contract may arise either by virtue of a prearranged agreement, express or implied, between the parties, or by the principal's subsequent ratification of the broker's unauthorized acts."
In Henderson v. Finance Company, 273 N.C. 253, 263, 160 S.E.2d 39, 46 (1968), it is said: "By hypothesis, one who makes no loan but, as broker or agent of the borrower, finds a lender and procures the making of a loan by him, has not received usury when he collects a fee for his services. If, however, the lender, himself, charges a commission in addition to the maximum rate of interest permitted by the statute, such charge is usury. Arrington et al., v. Goodrich et al., 95 N.C. 462."
Although the quoted statement from Henderson is not totally apropos to the instant case, we think it is analogous. In our opinion, if Bartlett was acting as broker for plaintiff and received, by payment or by cancellation of a note owed Gintis or a combination of both, the $3,800 commission, then the transaction complained of was not usurious; but, if Bartlett was acting as agent for Gintis and Gintis received as a commission all but $500 of the $3,800, then the transaction was usurious.
While plaintiff's president, Casey, testified that he did not at any time designate Bartlett as plaintiff's agent, there was evidence tending to show at least an implied contract between plaintiff and Bartlett and plaintiff's ratification of Bartlett's obtaining the loan and charging $3,800 commission. On the other hand, there was evidence from which the court could find that Bartlett was acting as agent for Gintis; that Bartlett received only a small part of the commission and that Gintis received as a commission a sufficient amount of the $3,800 to make the transaction usurious. It was incumbent on the court to make clear and specific findings of fact from the conflicting testimony. For failure of the court to make a proper determination as to Bartlett's position, there must be a new trial.
Finally, defendants contend that the court erred in adjudging that the note and deed of trust are null and void "as a usurious transaction" and permanently enjoining the foreclosure of the deed of trust. This contention likewise has merit.
G.S. § 24-2, our usury statute, provides in pertinent part as follows:
"The taking, receiving, reserving or charging a greater rate of interest than permitted by this chapter or other applicable law, either before or after the interest may accrue, when knowingly done, shall be a forfeiture of the entire interest which the note or other evidence of debt carries with it, or which has been agreed to be paid thereon. And in case a greater rate of interest has been paid, the person or his legal representatives or corporation by whom it has been paid, may recover back twice the amount of interest paid in an action in the nature of action for debt."
The usury statute must be strictly construed. Dixon v. Osborne, 204 N.C. 480, 168 S.E. 683 (1933). Under the statute, usury does not invalidate a contract; it simply works a forfeiture of the entire interest, and subjects the lender to liability to the borrower for twice the amount of interest paid. Kessing v. National Mortgage Corp., 278 N.C. 523, 180 S.E.2d 823 (1971); Wilkins v. Commercial Finance Company, 237 N.C. 396, 75 S.E.2d 118 (1953).
Upon a retrial of the case at bar, should the court determine that the transaction was usurious, the court will (1) eliminate the indebtedness of all interest charged, (2) determine the amount of interest *260 paid, and (3) give plaintiff credit on the indebtedness for twice the amount of interest paid. Plaintiff then will be indebted to the holder of the note for the balance remaining, and unless the balance is paid, the holder will be entitled to have the deed of trust foreclosed as provided therein.
For the reasons stated, the judgment appealed from is vacated and the cause is remanded for a
New trial.
BROCK and HEDRICK, JJ., concur.
