Latta v. Phillips ( 2012 )

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Sharron R. Latta, f/k/a Sharron R. Dowless, Respondent,

v.

Donnie R. Phillips, Appellant.

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Appeal From Horry County
Steven H. John, Circuit Court Judge

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Unpublished Opinion No. 2012-UP-036
Submitted January 3, 2012 – Filed January 25, 2012   

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AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

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Johnny Gardner and Jonathan Hiller, both of Conway, for Appellant.

William Paul Young, of North Myrtle Beach, for Respondent.

PER CURIAM:  Donnie R. Phillips appeals the circuit court's order finding he defaulted on a promissory note.  On appeal, Phillips argues the circuit court erred in finding (1) the interest rate pursuant to the promissory note was fifteen percent per annum and (2) an $8,500 payment from Sharron R. Latta constituted an advancement under the promissory note.  We reverse.[1]

1.  "One cardinal rule of contract interpretation is to ascertain and give effect to the intention of the parties."  S.C. Dep't of Transp. v. M & T Enters. of Mount Pleasant, LLC, 379 S.C. 645, 655, 667 S.E.2d 7, 12 (Ct. App. 2008) (citation omitted).  "To determine the intention of the parties, the court must first look at the language of the contract."  Id. at 655, 667 S.E.2d at 12-13 (citation and quotation marks omitted).  "The construction of a clear and unambiguous contract presents a question of law for the court."  Id. at 655, 667 S.E.2d at 13 (citation omitted).  "Questions of law may be decided with no particular deference to the [circuit] court."  Id. at 654, 667 S.E.2d at 12 (citation omitted).  "It is also a question of law whether the language of a contract is ambiguous."  Id. at 655, 667 S.E.2d at 13 (citation omitted).  "When a contract is unambiguous, clear, and explicit, it must be construed according to the terms the parties have used, to be taken and understood in their plain, ordinary, and popular sense."  Id.  "Where an agreement is clear and capable of legal construction, the court's only function is to interpret its lawful meaning and the intention of the parties as found within the agreement and give effect to it."  Id. (citation omitted).  "A court must enforce an unambiguous contract according to its terms regardless of its wisdom or folly, apparent unreasonableness, or the parties' failure to guard their rights carefully."  Id. (citation omitted). 

We find the circuit court erred in determining the promissory note set forth an annual fifteen percent interest rate.  In this case, the promissory note provides that the interest will be fifteen percent of the $100,000 principal, payable at the closing of the house built on lot #6.  Thus, under the plain and unambiguous terms of the promissory note, Latta was entitled to $15,000- in interest at the house closing in August of 2006.  Accordingly, the circuit court erred in finding Phillips accumulated $40,322.60 in interest based on an annual accrual rate of fifteen percent. 

The contract was silent as to the interest rate upon defaulting on a promissory note.  Nonetheless, the circuit court erred in determining the interest rate for default was fifteen percent per annum.  South Carolina's courts have held that the interest rate for default when the contract is silent about default shall be the statutory legal interest rate.  See Langston v. S.C. R.R., 2 S.C. 248, 254 (1871).  Accordingly, we reverse and remand to the circuit court to recalculate the interest Phillips accrued on the default of the promissory note.

2.  We affirm the circuit court's finding that an $8,500 payment from Latta constituted an advancement under the promissory note.  The evidence before this court supports the circuit court's finding that the operative language of the promissory note did not limit Phillips's obligation to repay only those advancements that were used for the construction of a home identified in the promissory note. 

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

FEW, C.J., and THOMAS and KONDUROS, JJ., concur.

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[1] We decide this case without oral argument pursuant to Rule 215, SCACR.