Langston v. Niles
| Decision Date | 18 November 1975 |
| Docket Number | No. 20110,20110 |
| Citation | 265 S.C. 445,219 S.E.2d 829 |
| Court | South Carolina Supreme Court |
| Parties | S. C. LANGSTON et al., Appellants-Respondents, v. Henry T. NILES et al., of whom Henry T. Niles is, Respondent-Appellant. |
W. Turner Logan, Charleston, and Hamilton & MacGregor, Summerville, for appellants-respondents.
Berry & Dukes, St. George, and Goodstein & Jennings, Charleston, for respondent-appellant.
James A. Bell, St. George, for defendant, Dorchester County.
Walker, Jones & Smith, Summerville, for defendant, Mrs. Eunice I. Page.
This action was commenced by the plaintiff, S. C. Langston, against the defendant, Henry T. Niles, for the purpose of obtaining an interpretation of an assignment contract of three leases, executed by the defendant in favor of the plaintiff on January 28, 1969. 1 Though not so designated, it is obviously a declaratory judgment action.
The evidence discloses that the defendant was an automobile dealer in the town of Summerville. He operated the business on three parcels of real estate owned by Mr and Mrs. H. B. Page (landowners). On April 1, 1968, the landowners executed three separate leases for the three parcels of real estate, in favor of the defendant as lessee. The first lease was for twenty years and provided for a monthly rental of $400.00. The second lease was for twenty years and provided for a monthly rental of $100.00. The third lease was for five years and provided for a monthly rental of $150.00. The first lease required that the defendant pay, in addition to the $400.00 monthly rental, 'such additional sum as shall be required by Cooper River Federal Savings and Loan Association as monthly payments to amortize a loan in the sum of Fifty thousand ($50,000.00) Dollars to the Landlord herein, which said loan is secured by a Note and Mortgage of the Landlord (Pages) to Cooper River Federal Savings and Loan Association, personally endorsed by the Tennant (defendant), covering the above described premises, . . ..' Apparently the proceeds of this loan were used to imrove the property and adapt it to the defendant's automobile sales operation. The amount of these payments was $391.00 per month.
In the last part of 1968, or the early part of 1969, the defendant decided that he wanted to get out of the automobile business. The plaintiff was an experienced automobile dealer in Charleston and desired to take over the defendant's dealership. On January 28, 1969, the plaintiff and the defendant entered into a written agreement to assign the three leases to the three parcels of real estate to the plaintiff. That assignment is the contract which the lower court was called upon to interpret, and to declare the rights and liabilities of the parties.
The assignment, in pertinent part, reads as follows:
'WHEREAS, Henry T. Niles does now desire to assign all of his right, title and interest in and to said Leases (which are attached hereto and made a part hereof) to Stanley C. Langston for the consideration hereinafter expressed.
The plaintiff lacked sufficient capital to enter into his new undertaking as an automobile dealer. In order to make it possible for the defendant to get his money out of the business, and in order to make it possible for the plaintiff to undertake the dealership, the defendant procured a loan from the Sea Island Bank of Statesboro, Georgia. The loan was the personal obligation of the defendant, but it was obtained in large measure for the benefit of the plaintiff. This accounts for the fact that the plaintiff was to provide the $600.00 monthly payments, as set out in the assignment agreement.
From the date of the assignment of January 28, 1969, until August 1973, the plaintiff paid to the defendant $2,100.00 each month, and out of this amount the defendant paid $600.00 monthly to the Georgia bank. During this same period the defendant paid to the landowners $650.00 per month rental, and paid to the Savings and Loan $391.00 per month on the note and mortgage.
In August of 1973, the plaintiff took the position that he had paid the principal sum of $32,000.00, recited in the assignment, and that he was thereafter required to pay only rent to defendant each month for the remainder of the term of the leases (until 1988). The defendant took the position that the plaintiff was obligated to pay the interest on the Georgia bank loan and to pay rent to him in the amount of $1,500.00 per month and, in addition, that plaintiff was required to pay the $650.00 per month rent to the landowners, and the $391.00 per month to the Savings and Loan. The defendant wrote to the landowners, informing them that, as of September 1973, the landowners were to collect the rents owing on the leases directly from the plaintiff as he was obligated under the assignment to pay the rent.
Since September of 1973, plaintiff has made the rent payments to the landowners and made the payment to the Savings and Loan. He has paid the remainder of the $1,500.00 each month into an escrow account to the Clerk of Court.
The plaintiff's complaint alleges that he has performed his part of the assignment agreement, but that the defendant has defaulted by refusing to continue to pay the landowners and to pay the Savings and Loan out of the $1,500.00 monthly payment.
The answer of the defendant asks the court to interpret the assignment as requiring the plaintiff to pay to him (defendant) the sum of $1,500.00 monthly and, in addition, pay the landowners and the Savings and Loan. The answer alleges that subsequent to the execution of the assignment, the plaintiff came to the defendant and stated that he was unable to comply with the terms of the assignment and requested the defendant to make the payments to the landowners and to the Savings and Loan until the Georgia bank was paid. The answer further alleges that the defendant orally agreed to do this, and it is undisputed that he did until August of 1973. The answer denies that the plaintiff had complied with the terms of the agreement. At the trial, defendant submitted that the plaintiff breached the contract by failing to pay interest on the Georgia bank loan. The answer prays that the complaint be dismissed and that the plaintiff be required to pay hereafter $1,500.00 per month to the defendant, plus the rent to the landowners, and $391.00 per month to the Savings and Loan, and for such other relief that seems proper.
Plaintiff takes the position that he was entitled to reduce the payment to the defendant from $2,100.00 per month to $1,500.00 when the principal sum of $32,000.00 had been paid to the Georgia bank. The defendant takes the position that the plaintiff was required to continue with the $2,100.00 per month payments until the loan of $32,000.00, plus interest, was liquidated.
We unhesitatingly hold that the assignment is ambiguous on two points:
1. It does not spell out whether the rent to the landlord and the payment to the Savings and Loan were to be made by the plaintiff or the defendant.
2. It does not spell out or definitely indicate whether the $2,100.00 monthly payments were to continue until principal only, or principal and interest were paid on the Georgia bank loan.
It became the duty of the trial judge to interpret the assignment agreement. He ruled that the plaintiff should pay, in addition to the principal, the interest on the loan of the Georgia bank, to the defendant, in the amount of $8,400.00. He further ruled that after the plaintiff had satisfied the Georgia bank loan as to principal and interest, he was entitled to reduce the monthly payment to $1,500.00, and should continue such payments until February 1988. He held that the fact that the five-year lease expired in 1973, did not entitle the plaintiff to reduce the $1,500.00 monthly rent.
Both the plaintiff and defendant have appealed.
We examine first the plaintiff's questions:
1. Was it proper for the court to order payment of interest to defendant when...
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