Lewis v. Carnaggio

Lewis, Justice:

Plaintiff, a contractor, constructed a dwelling for defendants under a written contract. Disagreement between the parties as to the contract price for the construction resulted in this action by plaintiff to establish and enforce a mechanic’s lien for the balance claimed by him to be due. The sole issue in the lower court and in this appeal concerns the amount of the liability of defendants under the written contract. The amount to be paid depends upon the construction to be placed on the contract, particularly paragraph 3 thereof, which is as follows:

“In consideration of the performance by the said contractor of all of the covenants and conditions contained in this agreement and contained in the plans and specifications the owners agree to pay to the contractor an amount equal to the amount of all material furnished by the contractor and the labor furnished by the contractor together with payroll taxes and Insurance, also together with the sum total of the net amount due the subcontractors performing work or furnishing work for said construction. The Owners also agree to pay to the contractor, in addition to the amount specified hereinabove, a fee equal to 10% of the actual cost of the said residence, said fee to be paid after completion of said residence and acceptance thereof by the Owners. It is specifically agreed by and between the parties that notwithstanding the agreement hereinabove by the owners shall not be required, under the terms of this agreement, to pay the contractor any amount in excess of the sum of Thirty-Four Thousand, Five Hundred Dollars ($34,500.00) which is the estimated cost of construction, plus the fee provided for herein.” (Emphasis added).

Plaintiff contends that the foregoing language establishes the contract price as the cost of construction plus ten percent, with the cost of construction not to exceed $34,500.00. Defendant, on the other hand, construes the above provision as providing that the total cost of the building, including the ten percent fee, could not under any circumstances exceed the sum of $34,500.00.

The issues were submitted to the trial judge who, after hearing testimony, construed the contract as limiting the liability of defendants to an amount not to exceed $34,500.-00; from which plaintiff has appealed.

If the contract is read as punctuated, there is no ambiguity in its meaning. In the first sentence of the emphasized portion of paragraph 3 the parties agree that the contract price would be the cost of construction plus ten percent. The following sentence provides that, notwithstanding the previous agreement, the owners (defendants) were not required “to pay to the contractor (plaintiff) any amount in excess of the sum of thirty-four thousand, five hunderd dollars ($34,500.00) which is the estimated cost of construction, plus the fee (10%) provided herein.” The clause reading “which is the estimated cost of construction” clearly modifies the antecedent figure of $34,500.00 and restricts its meaning. The phrase “plus the fee provided for herein” is separated from the preceding clause by a comma, showing that it was not included in the preceding clause but was in addition thereto. The fee was therefore recognized as being in addition to the cost of construction. This is the plain grammatical effect of the use of the comma to separate the above phrase from the preceding clause.

Defendants however argue, in effect, that we should disregard the punctuation and determine the true intent of the parties from extrinsic evidence. The lower court adopted this view.

While “punctuation of a written contract, although it may aid in determining the meaning, will not control over words or change a meaning which is plain from a consideration of the whole document and circumstances * * * punctuation is controlling in the construction of a contract which is not ambiguous if read as punctuated but would be ambiguous if read otherwise * * 17A C. J. S. Contracts § 306.

When read as punctuated, the present contract is not ambiguous and its meaning is clear. The provisions in question placed a limit of $34,500.00 on the cost of construction of the building and required the defendants to pay, in addition, the contractor’s fee of ten percent.

As the court stated in Western Empire Petroleum Co. v. Davenport, Tex. Civ. App., 318 S. W. (2d) 903: “We see no merit to an argument that we should disregard punctuation to create an ambiguity where none exists, and then construe the ambiguity.”

In the construction of the house, the parties agreed upon certain extra expenditures and it is stipulated that the total cost of construction was the sum of $34,580.30, all of which has been paid except the sum of $1150.06. Plaintiff is therefore entitled to receive, in addition to the foregoing balance, the sum of $3,458.03 which represents ten (10%) percent of the agreed cost of construction; or a total of $4,608.09.

The plaintiff is also entitled to interest on the above balance from the due date which is stated in the contract to be upon “completion of the residence and acceptance thereof by the owners.” Robert E. Lee & Co. v. Commission of Public Works, 248 S. C. 92, 149 S. E. (2d) 59. Since the present record fails to disclose the exact date upon which the residence was completed and accepted, this must be determined upon remand of the case to the lower court so that interest may be properly calculated.

The judgment of the lower court is accordingly reversed and the cause remanded for the entry of judgment in favor of plaintiff in accordance with the views expressed herein.

Moss, C. J. and Bussey and Brailsford, JJ., concur. Littlejohn, J., dissents.