Ehlke v. Nemec Const. Co., Inc., 1362

• Decision Date: 16 May 1989
• Docket Number: No. 1362,1362
• Citation: 298 S.C. 477,381 S.E.2d 508
• Court: South Carolina Court of Appeals
• Parties: Peter R. EHLKE and Esther J. Ehlke, Respondents, v. NEMEC CONSTRUCTION COMPANY, INC., Appellant. . Heard

Page 508

381 S.E.2d 508

298 S.C. 477

Peter R. EHLKE and Esther J. Ehlke, Respondents, v. NEMEC CONSTRUCTION COMPANY, INC., Appellant.

No. 1362.

Court of Appeals of South Carolina.

Heard May 16, 1989.

Decided June 26, 1989.

Claude Robin Chandler, Columbia, for appellant.

James B. Richardson, Jr., of Richardson & Smith, Columbia, for respondents.

GARDNER, Judge.

Peter R. Ehlke and Esther J. Ehlke (the Ehlkes) brought this action against Nemec Construction Company, Inc. (NCC), seeking,

                inter alia, damages for breach of a land sale contract.   The matter was referred to the Master upon the agreement that his order would be appealable directly.   The appealed order awarded the Ehlkes $3,700 in damages.   A motion to reconsider was made and an order overruling the motion was entered thereon.   We affirm
                

ISSUE

The sole issue of merit is the novel question of whether stipulation No. 4 was a condition for the sole benefit of the Ehlkes and therefore could not be asserted as a forfeiture by NCC.

FACTS

The evidence in a light most favorable to the Ehlkes reflects that the parties on July 12, 1986, executed a written contract; it was agreed therein that the Ehlkes would purchase for $110,456 a lot on which NCC would erect a house. The agreement indicated that the Ehlkes would borrow $75,000 and pay the rest in cash. The contract contained the following:

CONDITIONS

Property is being sold with the following stipulations

1. Buyers and Builder to approve plans and specifications by N/A date.

2. Contract contingent upon Buyer receiving loan approval by ________________ date.

3. House to be completed in a workmanlike manner according to building codes of Richland County or _______________ City, and in accordance with the approved plans and specifications.

4. Contingent upon the sale of purchasers present home located at No. 3 Woodwinds Ct. at Reflections by November 1, 1986.

5. Additional $500.00 to be deposited when construction starts.

There is evidence of record that NCC's agent, David Whitenack, originally proposed or asked the Ehlkes if they wanted stipulation No. 4; Peter Ehlke said that he "didn't care one way or the other." The evidence reflects that Whitenack gave the Ehlkes their choice.

Peter Ehlke testified that he did not list his home for sale because he wanted to wait until NCC began construction of the new home. NCC had not begun construction by November 1, 1986. NCC was building on lots in the order they appeared on the plat and had not reached lot number 16 (the Ehlkes' lot) by November 1, 1986. NCC then skipped lot 16 and at that time Ehlke asked Whitenack why this was done; he responded, "because of this contingency number 4 that November 1 had passed and that if [Ehlke] wanted the house built, [Ehlke] would have to come up with another $4,500." Early in September, Ehlke told Whitenack that if stipulation No. 4 was a problem, he did not care about the stipulation, had not particularly wanted it back in July when the contract was signed and, if it was a problem, to take it out of the contract.

As to whether stipulation No. 4 was inserted for the benefit of the Ehlkes as purchasers, the trial judge held the following in his order denying the motion for reconsideration.

Defendant's main argument is that the preponderance of the evidence does not support a finding that Stipulation No. 4 in the sales contract was inserted for the benefit of the purchasers alone. Defendant contends that the home to be constructed by it for sale to plaintiffs was a "custom house". Defendant argues that it would not have undertaken the construction of such a home unless and until plaintiffs sold their present home. Having carefully reconsidered the evidence on this point, I remain unpersuaded. The credible evidence is that Stipulation No. 4 was presented by seller's agent to buyers as an optional provision, to be inserted or not, as the buyers chose.

Also relevant here is the testimony of Mr. Ehlke that he informed defendant's agent that he was waiving Stipulation No. 4. This conversation occurred about two months before the "deadline" for the sale of the buyers' present home. There is no evidence whatever from defendant Moreover, defendant offered no evidence to show that the buyers would have been unable to purchase the new home without selling their old one. On the contrary, the evidence is that the buyers could have performed without selling their present home. More to the point, there is no credible evidence that the defendant doubted, or had cause to doubt, plaintiffs' ability to perform, with or without the sale of their present home. The evidence is that mortgage financing was generally available for a high percentage of the purchase price.

that it protested this waiver, denied the right of the buyers to waive the stipulation, or made known their position that the stipulation was for their benefit as well, and could not be unilaterally waived by buyers.

DISCUSSION

Provisions such as stipulation No. 4 of the contract before us are common. Determination of the force and effect of such provisions involves the application of the usual rules for construction of contracts for the purchase and sale of land. 77 Am.Jur.2d Vendor and Purchaser Section 66 (1975).

This is a novel issue in South Carolina. After careful study of the authorities on the subject, we hold that whether stipulation No. 4 is enforceable at the option of NCC depends upon the intention of the parties as deduced from the language used, the surrounding circumstances at the time the contract was executed, and the purpose sought to be accomplished by the insertion of the provision. See Id., Annot., 81 A.L.R.2d 1338, 1340 (1962).

"The question as to who may enforce or take advantage of a condition in a contract of...