*1 155 BRUCE, Prince, Ray Otis E. and J. E. WALL as Commissoners of District, Inman-Campobello Appellants, Taylor Water v. BLA LOCK, Henry Kirby, DuPre DeFoix as Commissioners of Carolina, Public Works of Spartanburg, South Re spondents.
(127 (2d) 439) S. E. *2 Messrs. Gaines & Vermont Walsh, of Spartan- E.T. burg, Appellants, *3 Odom, Foster,
Messrs. Nolen & Re- Spartanburg, spondents, 17, 1962.
September
Moss, Justice. District Water Inman-Campobello Assembly created an Act General by County 2553. There- State, this 1954. 48 Stats. approved April 4, 1955, after, the Act creating Act May an approved as to for the area District was amended so provide Dis- and committed to the District powers functions and Act, the District was 1389. aforesaid By Stats. trict. build, construct, main- operate, authority given District, mains ain water lines and water throughout had the or otherwise authority “purchase, acquire, * * * for its water distribution system, of water supply of water whole- to enter into contracts for the at purchase sale.” 59-536, amended, of as the 1952 Code of Laws
Section Carolina, authorized or of South Spartanburg, works, contract with persons those charge public limits for the furnishing without the water corporate both, industrial or for domestic or purposes, upon either terms, rates and as fixed charges may con- for a not between the ex- tract period fifty years. ceeding authority, the aforesaid
Pursuant Inman-Campo- 31, 1955, did, on District enter into a August bello Water Commissioners of Public with the Works *4 the terms of which the Commission City by Spartanburg, to District for water the a of thirty to furnish period agreed the terms and various conditions accordance years This contract provided, para- forth in said agreement. set thereof, the : three following graph . to the “3. District Commission pay The agrees shall be at The rate thou- per water intervals. monthly 10^ rate, whichever be lower. may sand or the gallons published Commission’s rates are hereto attached and published The It is this of this further that agreed made part Agreement. contract is made to the rules and subject regulations Commission, and such rules and and the regulations water ratés above referred to shall at all times be subject any made the commission change by all consumers of affecting the same class.”
It 30, from the record that on appears April the Commissioners raised the rate for the water furnished to the District from thousand per gallons thou- per 10í/‘ 12^^ sand gallons. rate was under higher paid the protest by District.
This action was instituted by the Commissioners of the District, Water Inman-Campobello herein, appellants the Commissioners against of Public Works of the herein, Spartanburg, for the respondents of ob- purpose an taining interpretation three above quoted between the agreement and for a refund of all amounts the District in excess of paid per thousand 10^ answer, of water. The gallons respondents, assert under terms had the agreement they right the District at change price charged time any provided affected all consumers of the charge same class. This case came on to heard before the Honorable Julius Ness, B. Presiding Judge Circuit, the Seventh Judicial and a at term jury, January of the Court of Com- mon Pleas for County. trial of During case both parties agreed Court should interpret aforesaid in accordance with the facts and the law thereto. applicable was Thereupon, jury excused and case tried before the without a Judge The trial jury. 29, 1961, on an Judge, August in which he passed order held that the had the respondents under the authority, agree- to, ment heretofore referred charge appellants water rate of thousand the rate gallons charged 12*4‡ consumers of the same class. are before this Court upon exceptions
the order of the trial these Judge. By two exceptions, ques-
160 between the Water Was the agreement
tions are raised: (1)
of the City
of Public Works
District and the Commissioners
and,
so, did
if
the Court below
ambiguous
of Spartanburg
and circum-
facts
exclude evidence
erroneously
showing
Does
the execution of
contract? (2)
stances surrounding
District
the Water
Commis-
between
the agreement
put
of Public Works
sioners
rate which
on the water
thousand gallons
ceiling
10‡
District?
the Water
can be charged
held that the
between
agreement
The trial Judge
was unambiguous.
and the respondents
error. An
assert this to be
ambiguous
The appellants
in more senses
is one
understood
being
capable
indefi
one, an
obscure meaning, through
than
or
a double meaning. Whiting
having
niteness
expression,
Cir.,
7
171 F.
v.
Stoker Corp.,
(2d)
Co.
Chicago
Stoker
testi
instrument is
parol
ambiguous
248. Where written
Breedin v.
to show its true meaning.
is admissible
mony
346,
64;
v. Pied
al.,
120 S. E.
DeVore
et
126 S. C.
Smith
417,
lan
Co.,
Contracts, where there is no
must be con
ambiguity,
strued
to the terms
according
which the parties have
used, to be taken and understood in their
ordi-
plain,
nary
popular sense. Inman et al. v.
Ins. Co. Vir-
Life
98,
223
ginia,
S. C.
74
E.S.
423. It is axiomatic
(2d)
that
the intent and
of a written contract or
purport
has
agreement
to be
from
gathered
the contents of the entire agreement and
not from any
clause or
particular
provision thereof. The par-
ties have the
contracts,
make their own
right
and when
such contracts are
of clear
capable
interpretation,
Court’s
province
confined to the enforcement thereof. The Court
cannot exercise its discretion as to the content of such con-
tract or substitute its own construction for the agreement
clearly entered into between the
Sloan v.
parties.
Colonial
Co.,
Accident
248,
&
Ins.
222 S. C.
72 S. E.
446.
(2d)
Life
of all rules of
purpose
construction is to ascertain the
intention of the
to the
parties
The subject
contract.
matter
of the contract and the
of its
purpose
are material
exception
to the ascertainment of the intention of the
parties
of the terms
In
meaning
use.
they
construing
contract the
Court will ascertain the intention of the
and to
parties,
will,
end
as .far as
determine
possible,
the situation of the
as well as had in
parties,
view at
purposes
the time contract was
All
made.
contracts should receive a sensible
construction,
reasonable
and not such a one as will lead
to absurd
consequences
unjust results. Three States Coal
Co.,
Co. v. Mollohon
Mfg.
S. C.
making 10‡ thousand of water gallons pay respondents rate, If or the was lower. the foregoing whichever published was all that contained the contract was provision pertain- rates, to water then the position ing However, must consider all the language sound. we at a used in order arrive construc- proper It further tion and interpretation agreement. that the contract was made the rules and subject agreed “the of the Commission and that water rates regulations to shall at all times be subject change above referred any consumers the Commission of the same affecting made by *7 class.” of the
The the is that be- agreement position of tween to this action a thou- put ceiling the parties 10^ on rate which could be the sand the water charged gallons hold, The trial to so held District. that Judge, refusing of the he must ascertain the intention from the whole parties be if and effect should to given, practicable, every instrument he word in it. He further held that should clause and give the contract would such construction to as not lead ab- a results. He found: surd or unjust consequences law to the case at hand the this Court “Applying foregoing of the must interpretation finds plaintiffs’ unfair and construc- being very be denied as unreasonable It thereof. most tion interpretation certainly bring result to the defendants. It would very inequitable about- a an unfair and obtaining in the unreasonable plaintiffs result the defendants and one which never over advantage hereto. In our the parties constantly changing intended businesses, in- affects which all economy types and inflated water works system City Spartanburg, cluding difficult, if not for most this Court to impossible it would servants their hands public tying elected duly conceive thirty years set water rate for a the detri- period with a ment of the citizens of the for whom the water works was created.” originally He concluded:
“It necessarily follows reasonable only construc- which tion the Court on this can entire place agreement contract is that the defendants have the under the authority terms of the contract to charge same plaintiffs water rates that it class, other consumers of the same which charges rates, course, are subject increase decrease af- any all consumers of the same It is fecting the Court’s class. that this construction carries opinion out intention of is in parties; accord purposes contract; is is a fair and sensible and reasonable con- struction and not such as would lead to absurd consequences or unjust results.” 3 that provision “the water rates above
referred to shall at all times be subject any made change the Commission consumers of the same affecting class” known in law as an “escalator The Courts clause”. have for recognized such a because necessity clause sharply inflationary economic conditions changing pre- in this for several As a vailing country past means years. conditions, with such coping economic with re- changing variations, sultant many contracts fix a base price but price raise such whereby may contain seller provision this clause was necessity type brought price. *8 term because of contracts when the about long parties thereto could not all which anticipate factors price might occur the of the said existence contract. Attention is during in 1337, direced to an annotation 63 A. L. R. which (2d) deals with “escalator” clauses. In adjustment the case price Co., Bethlehem v. Turner Steel Co. Construction 2 N. Y. 456, 90, 590, 161 E. N. Y. S. 141 N. 63 (2d) (2d) (2d) clause, was held A. L. R. it that an escalator (2d) giv- the materials the increase producer building right ing under the contract if it price changed prices generally, did not render the invalid for lack mutuality, Court that the increases or must be in ac- noting decreases cordance with the of the changes producer’s regular prices in from the of its We opinion purchasers product. quote case, the following:
*“* * words, the con- In other are saying appellants clause, tract that an escalation lacks mutuality requisite valid, stand- be must be based on some extrinsic order to However, be this ard escalation can determined. by which in ac- clause for increases decreases escalation provided to all cordance with in Bethlehem’s regular changes prices does such a provision steel plain products purchasers con- not Bethlehem undue of determination give power * * tract price here under of the contract provision revise the consideration to the respondents right gave rate to all con- water in the of a general rates event change same This to make a adjust- sumers of the class. right price and did not conflict with pro- ment was a contractual one the time the basic rate water at vision charged governing of the contract. execution shows in- We out that record should point the same as was crease was applied applied It should be noted of the same class. also to all consumers no contention that the rate make charged that the appellants or unreasonable. arbitrary respondents trial conclude that the Judge correctly We construed three of contract here and interpreted paragraph His construction to us consideration. under appears and to be in accordance the intention out carry to the contract as evidenced an parties purposes It us that if seems to agreement. examination entire 10‡ thou had intended to place ceiling District, an as water rate sand charged gallons this could clearly expressing purpose have been executed. do us that we have reached conclusions not require the trial com-
to determine the whether question Judge *9 in the case on appeal mitted error settling by granting the respondents. amendments proposed by are overruled and the exceptions below affirmed. judgment
Affirmed. J., J., C.
Taylor, Lewis, and concur. Bussey dissent. JJ., Brailsford, Taylor, Chief (concurring). Justice I no see in the record be- question ambiguity presented fore us. After considerable the Court made taking testimony, I “What am have following inquiry: question going on, this jury this contract?” a pass interpreting After discussion, short counsel for stated: Appellants Honor, concerned, so “Your far as we are we will submit thing whole you. ‘The As a Court: matter law?” “Yes, Counsel: sir.”
“The And Court: let me decide the facts and the law?” that, “The Counsel: whole We will do thing. too.” Further taken with testimony the statement by the Court that it rule later whether “I think it is a ques- Thereafter, tion of law or fact.” when Respondents moved nonsuit, for a the Court stated: “Let the record show I have nonsuit, motion overruled the for and that the Court with counsel for the defendant that there is agrees no ques- tion of here fact presented the Court plaintiff, counsel with for the that there is agrees plaintiff no question of fact and it is presented plaintiff, entirely question Court, and the Court in discretion, law is per- the defendant to such witnesses up mitting put testify facts as it deem Is may relevant that what proper. you dismissed; Order, was then jury want?” The his Trial made the statement which is Judge following not ques- tioned: “All contend that the parties agreement being * * from sued on is free *.” ambiguity heard case was contending contract under consideration was It therefore unambiguous.
166 did, con- to, it construe the the of the Court as became duty to the extrinsic evidence presented. tract without regard is the contract on that now contend appeal Appellants the case remanded Cir- and seek to have ambiguous certain extrinsic of introducing cuit for the purpose Court in case of be admissible only ambig- which would evidence fraud, case, of acci- there is no contention in instant as uity, of the contract. in the dent, or mistake procurement law, the without a In at tried by Judge an action the same force and have jury, Judge’s findings of a and unless jury, Judge effect as the verdict him to an erroneous error of law leading committed some is conclusion, reasonably susceptible or the evidence his must be accepted conclusion only, findings opposite Insur Casualty Robinson v. Carolina Court. reviewing 268, 101 E. 664. 232 S. S. (2d) C. ance Company, sus- is reasonably contended that the evidence It is not to that conclusion reached only ceptible opposite in I therefore concur Opinion hearing Judge, Moss. Justice concur.
Moss and JJ., Lewis, Bussey dissent. JJ., Brailsford, (dissenting). Bussey, Justice ma- with the result I find unable myself agree is considered my in this case. It opinion jority opinion should be reversed and the of the lower court the judgment a remanded for new trial. cause as well as the decision the lower majority opinion, in
court, that there is no is based on the ambiguity premise as Considering the contract between the parties. is a am- whole, to me that there obvious very a it appears thereof, rise to which ambiguity gave biguity this action. 3 is as follows:
The first of paragraph portion “The District the Commission for water at agrees pay 10‡ per intervals. The rate shall be thousand monthly gal- rate, lons whichever be lower. The may published rates are hereto attached Commission’s and made published of this part Agreement.” this it clear lan- Up point crystal foregoing (cid:127) contract, other guage, paragraphs light established cents thousand for a ten ceiling gallons a lower rate if the thirty *11 with years, paid period volume District should entitle District purchased by to a lower rates. under price published 3,
The is in above accord- language quoted, paragraph Simms, with the letter in evidence from Mr. R. ance B. Works, Water Superintendent at- said, contract, who wherein Mr. Simms torney prepared “As to the rate million I would gallons, you suggest one make the contract hundred dollars mil- ($100.00) per lion or the rate for gallons published Inman-Campobello District on the rate.” depending cheaper arose when there was added to ambiguity the con- tract, Simms, also at the of Mr. request suggestion 3, last sentence which reads as follows: “It is further that this agreed contract is made subject Commission, the rules and regulations and such rules water rates regulations above referred to shall at all times be subject any made change Commis- all consumers of the sion same affecting class.” is, This last sentence in my quoted opinion, susceptible of than one when more interpretation contract is considered in its and raises a serious entirety, question as to what was the intention of the parties. respondents contend the last sentence them the to raise the gives right contract or ceiling sentence, set forth in the second price as well as its published rates. While the is language susceptible of this construction, such construction would emasculate from the second sen- words, tence the “whichever bemay lower”. The language sentence, hand, of the last on the other is clearly susceptible of the construction contended for which by the appellants, is its that the Commission reserved the to raise right pub- lished rates to but not the contract or consumers ceiling which construction is when the con- price, entirely logical is tract viewed in entirety. the contention of the as to
Strongly supporting contract is the of the word meaning the construction of word, know, as I has never “consumer”, as far been which courts, however, this court. Numerous heretofore defined by the same. A defi- to define comprehensive occasion have had follows: term as nition of the economic and so dimi- is one uses goods who “Consumer utilities; their opposed producer; or destroys nishes waste, devour, to use up, expend, means 'consume' absorb, waste, swallow ex- destroy, engulf, up, synonyms lavish, burn dissipate, haust, up.” expend, squander, spend, Mehlman, 257, R. Tex. Cr. 75 W. S. Ex part See State Cement Co. v. Tax 689; Portland Com- Union (2d) 164; St. Paul Ta- 170 P. & mission, (2d) 110 Utah *12 State, 347, P. 40 243 v. Wash. (2d) (2d) Lumber Co. coma 474. to the whom person is last property “consumer” such is the test of a ownership in the course
passes State, v. Theatres Paramount-Richards transaction. retail 812. 515, So. 55 (2d) Ala. to a distribut- to furnish electrical power a contract Under held not to distributing company the company, ing Gas, & Coke Co. v. Ohio Light in the case of a consumer Ohio, Abst. 120. Co., 3 Ohio Law Power Shore Lake from other authority jurisdic- to the weight According not a “consumer” in District here is tions, the appellant sense of the word. The pub- or ordinary the legal either deal with rates consumers of the Commission lished rates con- or rates to whatsoever prices no reference make of distribution. for the wholesale purpose at purchasers tract Therefore, the when contract is “water language rates above referred to shall at times be subject any change the by made Commission all consumers the affecting same class”, of the language clearly susceptible interpre- in the words using “water rates above tation referred to” had in mind the rates only referred published 3, to in the third sentence of the rates paragraph published rates mentioned which being only affected the consumers , of the same class class. It was natural that any only Commission would wish to reserve right change consumer rates to avoid published contention on the any of the District part thirty year of the during period con- consumers, tract that the rates to published attached to and contract, amade were part binding throughout thirty year period.
Stated another way, to the according contention of the when the last sentence 3 was added paragraph to the Commission was simply saying District, “We reserve the right our change rates published to consumers throughout period contract. Should consumers, we raise our rates to published such raise might District, result never you, the benefit having aof 10‡ lower than thousand price gallons, regardless course, volume of water purchased you. Of should we decide to lower our to consumers, rates published you, the District, will the benefit thereof.” get The construction placed upon language by appellants gives meaning effect to all of the words and phrases paragraph whereas the contended for construction respondents has the effect 3. portions emasculating after majority opinion, at what arriving I think is an erroneous conclusion that the contract is unambiguous, *13 the to construe contract and in proceeds so doing overlooks I consider to be material what very parts contract. The on the opinion proceeds premise only purpose of the contract was to provide District with an adequate sup- was, course, This water. of one of ply purpose, but far from contract sets forth in detail only purpose. among its purposes that Com- Spartanburg through a missioners of Public Works had water supply good in excess of its and that the available Commis- requirements, determined, fact, that it sion had as a benefit greatly to make such excess water available the City terms conditions. the District on reasonable 5 of the contract shows a to tie the purpose Paragraph incurred the District to the bonded indebtedness time thirty years, being period for a period of the bonded indebtedness. No for repayment required reference to the bonded indebted- making reason for other connection, In this readily contract is apparent. in the ness with the into a contract Commission the District entered if some firm limitation upon without thirty year a period effect, water, would, in vest the Com- cost of the to be raised in the to force taxes District in power mission indebtedness incurred bonded Dis- to pay order intention parties? such the trict. Was 2 of the contract show a on the purpose 1 and Paragraphs the amount of water which to limit of the Commission part thirty year during period, would ever be required, it at a firm contract ceiling price, the District furnish connection, one the ex- only make allowed District being District, and the amount water by the paid being pense of the main transmission line to the capacity limited being meter or at the pressures point under gravity flowing connection. held, his being quoted ap- holding
The circuit judge that the appellants’ interpre- opinion, majority proval denied as un- very must be being tation of there- and interpretation unfair construction reasonable about most in- certainly it most of, bring that would majority opinion to the defendants. result equitable that the increase “The record shows the statement. makes as to all con- the same applied applied same class.” sumers *14 by lower court and the holding statement quoted
in the are opinion discussed majority together because they view, involve the same facts. In largely of my neither them is record, contract or the supported by which us brings ato consideration of certain facts disclosed pertinent with, record. To is there an absence of begin evidence any to show that the of tending construction the contract con- tended for about a in- appellants bring very to result as equitable respondents.
It is that at the time of the contract undisputed and at the rates, time of the raise the District here involved was the district only water from the purchasihg Commission at for wholesale resale its own distribution through system. Mills, The witness Secretary-Treasurer of the Commis- sion, testified that District was under the con- “special Simms, tract Mr. class” and of the Superintendent Com- mission, referred to the District as on the being “industrial rate”. Commission, Neither the rates published at- contract, tached to and a made part nor the rate sheet as 1, 1957, effective May make published being any refer- to class, ence whatsoever an special industrial rate aor district water at wholesale for purchasing retail sale.
In fairness view the it majority, should be noted statement case contains the lan- following : guage 1, 1957,
“On or about the Commissioners of Public June Works of the City raised the rate all Spartanburg customers the same class as Water Inman-Campobello * * *” District to thousand gallons, reflects that such appendix was inserted therein by order circuit the case on settling more- judge appeal, over, the does not quoted language reflect fact that the said District was the customer only of that class. I see no other basis in the record for the statement that increase “the was the same consumers applied applied the same class.” The rate of increase was the same as consumers, retail City applied Spartanburg, customer, District, was not a con- I while
but think not a retail consumer. certainly sumer us, I conclude that rather than the record before Upon decision from a resulting inequity an it most likely inequita- favorable appellants, *15 affirmance of will follow the ble result decision. lower court of Mr. Chief concurring due opinion
With respect I not that the be- do think Taylor, quoted colloquy Justice tween amounted to a concession on and the court counsel that there was no ambiguity of counsel appellant the part record and the The entire appeal, my in contract. concession. mind, such a negative his case the circuit in order deciding judge Although statement: “All the contend that the make the did * * on is from in sued free ambiguity being from, case on also appeal, appealed his order settling said, “It was the court’s that the opinion con- circuit judge however, I could from not state ambiguity, free tract was to this.” for appellants agreed the attorneys course, circuit had considered all of the Of if the judge therefrom, his and made factual findings findings evidence as same force and effect the verdict of a have had the did This, however, circuit not do. He re- judge jury. as free from throughout being the contract ambig- garded evidence, and, to consider the it unnecessary found uity; his moreover, at construction of arriving construction which are rules of normally certain relied upon of construction ambiguous, aid rather only resorted contracts. unambiguous, than stated, it is conclusion my hereinabove reasons For the reversed court should be of the lower decision being new trial with the parties for a remanded cause admissible, which would relevant evidence offer all allowed in the and real intent of the parties true tend prove contract. of this ambiguous execution J., in result. Brailsford, concurs