Blakeley v. Rabon

• Decision Date: 21 January 1976
• Docket Number: No. 20152,20152
• Citation: 221 S.E.2d 767,266 S.C. 68
• Court: South Carolina Supreme Court
• Parties: John M. BLAKELEY, Jr., Respondent, v. W. T. RABON and Sandra B. Rabon, Individually and d/b/a Blakeley Brothers Furniture Company, Appellants.

Page 767

221 S.E.2d 767

266 S.C. 68

John M. BLAKELEY, Jr., Respondent, v. W. T. RABON and Sandra B. Rabon, Individually and d/b/a

Blakeley Brothers Furniture Company, Appellants.

No. 20152.

Supreme Court of South Carolina.

Jan. 21, 1976.

Connor & Connor, Kingstree and Rosen & Rosen, Georgetown, for appellants.

Moore, Flowers & Doar, Georgetown, for respondent.

GREGORY, Justice:

This appeal involves construction of an indemnity clause incorporated in an agreement for sale of a partnership interest. The basic issue is whether the agreement is ambiguous, as urged by appellants, permitting the introduction of parole testimony to clarify its meaning. We find the agreement not ambiguous and affirm.

Respondent and his brother, Muldrow Blakeley, were sole partners in Blakeley Brothers Furniture Company. Muldrow died leaving his one-half interest to his wife, who subsequently sold it to her daughter, Sandra Rabon (one of appellants herein). On February 21, 1972 Sandra's husband, W. T. Rabon (appellant herein) purchased the other one-half of the business from the surviving brother, John Blakeley (respondent herein). The sale agreement contained the following indemnity clause in paragraph three:

'3. W. T. Rabon and Sandra B. Rabon, individually and doing business as Blakeley Brothers Furniture Company, Covenant and agree to indemnify and save harmless the said John M. Blakeley, Jr., his executors, heirs and assigns, Against any suit or claim of any kind whatsoever, including but not limited to income, sales, property And inventory Taxes, except that John M. Blakeley, Jr., shall be responsible for the income taxes for his share of the profits from said business for the year 1971, brought or instituted against the said John M. Blakeley, Jr., his executors, heirs, and assigns, As a result of his association with and ownership of Blakeley Brothers Furniture Company, by any person or persons, organization, corporation or government, and to reimburse or make good any loss or damages or costs, including but not limited to attorney fees and court costs, that the said John M. Blakeley, Jr., may have to pay if any suit or claim arises from his association with or ownership of Blakeley Brothers Furniture Company.' (emphasis supplied)

After sale of his interest, respondent was assessed by the Internal Revenue Service Twenty-Three Thousand Seven Hundred Twenty-Seven and 22/100 ($23,727.22) Dollars in taxes for his share of partnership earnings from Blakeley Brothers Furniture Company (not including 1971). He borrowed the money and paid the assessment under protest. He then instituted this action against appellants to recover the $23,727.22 and interest, plus other sums spent in resisting the claim of the IRS pursuant to the above indemnity clause. It was stipulated before trial that the respondent had also paid the sum of Three Thousand Five Hundred Thirty-two and 14/100 ($3,532.14) Dollars to the South Carolina Tax Commission, and that his complaint would be amended to include this. Only the taxes paid and interest thereon is at issue.

Appellants in their Answer alleged that the indemnity agreement was a commitment to safeguard respondent against partnership obligations as distinguished from personal obligations by reason of profits derived by him from the partnership. Appellants contend that the provision regarding income taxes in the indemnity clause refers to withholding taxes for the furniture salesmen employed by the partnership.

Appellants further set up a counterclaim in their Answer for Fifteen Thousand Dollars ($15,000.00) for an allegedly unauthorized withdrawal by respondent on April 17, 1969 while he was a partner.

The action was tried before the Presiding Judge without a jury on January 30, 1975. The court took only evidence as to the ambiguity of the contract reserving all other question until a decision was reached on whether or not the agreement in question could be construed. After hearing the testimony as to ambiguity the court ruled that the agreement was not ambiguous, and that the appellants were due the respondent the amounts paid by him for taxes on his partnership profits. The appellants did not waive their claim of offset of any obligation of the respondent for tax on personal income not reported or claim under the counterclaim pleaded in this matter, but were precluded under the court's ruling from offering evidence thereon. This was confirmed by written Order dated February 17, 1975. Notice of Intention to Appeal from this Order was served on February 24, 1975.

Appellant charges error in the trial judge's ruling that the sale agreement was not ambiguous. To ascertain the intention of an instrument, resort is first to be had to its language, and if such is perfectly plain and capable of legal construction, such language determines the force and effect of the instrument. Superior Auto Ins. Co. v. Maners, 261 S.C. 257, 199 S.E.2d 719 (1973). Words cannot be read into a contract which impart intent wholly unexpressed when the contract was executed. McPherson v. J. E. Sirrine & Co., 206 S.C. 183, 33 S.E.2d 501 (1945).

We must also interpret language used in its natural and ordinary sense, except with technical language or where the context requires another...