Appeal
from Common Pleas Circuit Court of Newberry County; J. W. De
Vore, Judge.
STABLER
J.
This is
an action on a contract for sale of coal.
The
complaint alleges that the plaintiff and the defendant, on or
about September 1, 1923, executed a written contract for the
sale to the defendant by the plaintiff of 2,000 net tons of
coal of 2,000 pounds each, at a rate of $2.40 per net ton, to
be shipped, approximately one car weekly, beginning September
1, 1923, and continuing until April 15, 1924, a copy of the
contract being attached to the complaint and being set forth
in full in this opinion; that the defendant on divers dates
during the continuance of the contract notified and directed
the plaintiff not to ship coal according to the terms of the
contract and that during the said period the plaintiff by the
direction of the defendant was allowed to ship only four cars
of said coal, which cars were shipped on
November 12, November 14, November 19 and November 26, 1923
and which aggregated a total tonnage of only 219.7 net tons
and that the plaintiff was not allowed to ship the balance of
coal called for
by the contract, to wit, 1,780.3 net tons; that during all of
the contract period the plaintiff was ready and able to
deliver said coal, so notified the defendant, and requested
the defendant to allow delivery of said coal, and that the
defendant refused and neglected to accept the coal and
directed the plaintiff not to make shipments thereof.
Judgment in the sum of $1,087.78, alleged to be due as
damages for breach of the contract, is demanded.
The
contract sued on is as follows:
"Three States Coal Company,
Bluefield, W. Va.
Coal Contract.
Three States Coal Company, of Bluefield, W. Va., hereinafter
known as the seller, sells to Mollohon Manufacturing Company,
of Newberry, S. C., hereinafter known as the buyer:
Quantity: Two thousand (2,000) net tons of 2,000 pounds each.
Approximately one car weekly, beginning at once and
continuing until April 15, 1924.
Grade: 'Star' banner run of mine-hopper or drop door
equipment.
Price: Two dollars and forty cents ($2.40) per net ton f. o.
b. cars at mines.
Contract effective September 1, 1923. Contract expires April
15, 1924.
Conditions as below to govern this agreement:
(1) Terms of payment, cash on or before the tenth of each
month for all coal shipped during the preceding month.
Accounts not paid when due will be subject to sight draft
without notice and with interest from date of maturity. Terms
of payment being essence of this contract, noncompliance therewith shall give the seller privilege of
cancellation, and waiver in any case shall not be construed
as destroying this right, and, also, the right to cancel this
contract is especially reserved in the event the seller has
reason to believe that the credit of the buyer is impaired.
(2) In case of strikes, accidents, delay in transportation,
shortage of labor, failure of the railroads to supply
equipment suitable for loading or transporting the coal
hereby sold and purchased; partial or complete embargoes
imposed by originating railroads or connecting railroads over
which shipments must be forwarded to the destination
specified herein, stoppage or the partial stoppage of the the
mining of this coal or its shipment, to labor agitations and
disturbances, to lockouts, to mine accidents or other cause
beyond the immediate control of the seller, it is understood
and agreed that the seller is only obligated to deliver the
percentage of the coal named in this contract equal to the
percentage of the capacity of the mine or mines producing the
grade of coal named, which is actually shipped during such
period.
(3) In case of failure by the buyer to order or accept this
coal each month as agreed, the seller may, during the term of
this contract, reduce the said tonnage the quantity the buyer
failed to order or accept and shall also have the right to
reduce the monthly installment for any or all succeeding
months to the amount of the minimum tonnage taken in any of
the preceding months.
(4) Actual railroad weights, as ascertained by initial lines,
are to govern all settlements.
(5) Shipments made by the seller to the buyer during any one
month shall constitute fulfillment of this contract for that
month and the tonnage herein contracted shall be cumulative
only for such one-month period, except by mutual
agreement."
The
defendant demurred to the complaint on the ground that it did
not state facts sufficient to constitute a cause of action in that:
"I. Said complaint is based on the contract attached
hereto as an exhibit and said contract shows on its face by
the fifth paragraph thereof that shipments made during any
one month constitute fulfillment for such month and that the
tonnage should not be cumulative except for one-month period,
except by mutual agreement, and the complaint does not show
that any such agreement was made.
II. Because the contract on which this action is based
clearly shows that the tonnage contracted for should not be
cumulative except by mutual agreement of the parties and the
complaint does not show such agreement.
III. Because the complaint, together with the contract which
is made a part thereof, shows that the plaintiff was not
required to hold tonnage for the defendant but that in case
defendant failed to order the amount of tonnage in any one
month, the plaintiff could reduce tonnage for succeeding
months to said amount and was only liable to the defendant
for the tonnage actually ordered.
IV. Because complaint shows that the action is based entirely
on the contract attached thereto as an exhibit, and such
contract, construed as a whole, shows that the tonnage was
not to become cumulative against either party and that the
contract was fully performed when the amount of tonnage was
shipped that was actually ordered."
The
demurrer was overruled, and appeal is made from the order
overruling the demurrer. The exceptions of the defendant are
as follows:
"I. Because the court erred in holding that, under said
contract, the plaintiff was bound to deliver and the
defendant bound to accept the entire tonnage called for by
said contract in the specified time, but should have
construed said contract to mean that the tonnage did not
become cumulative, except by mutual consent, and there was no
obligation on the part of the defendant to order or the
plaintiff to ship the entire tonnage.
II. Because the Court erred in not holding
that the complaint showed on its face that the plaintiff was
not damaged by the failure of the defendant to order and
accept the entire tonnage, as the contract on which complaint
was based, and which was made a part thereof, clearly shows
that the plaintiff was not bound to ship only what was
ordered by defendant, and the defendant was not bound to
accept only what was ordered by it.
III. Because the court erred in holding that, under said
contract, the defendant would be liable in damages for its
failure to take the entire amount of said coal, provided the
plaintiff was willing
and ready to ship same, but should have held that, under said
contract, the
plaintiff had a right to reduce the tonnage for any month to
the amount ordered and accepted, and was not liable to
defendant for any more, and that, under no circumstances, was
the tonnage to be cumulative against either party, except by
mutual consent.
IV. Because the court erred in holding that the complaint
stated facts sufficient to constitute a cause of action, but
should have held that the action was based entirely on the
contract attached to the complaint as an exhibit and such
contract construed, as a whole, shows that the tonnage was
not to become cumulative against either party, and that the
contract was fully performed when the amount of tonnage was
shipped that was actually ordered."
The
decision in this case involves the construction of the
contract in question.
Certain
well-established rules are followed by the courts in the
construction of written contracts. The purpose of all rules
of construction is to ascertain the intention of the parties
to the contract, and in ascertaining this intention the whole
instrument should be considered and effect given, if
practicable, to every clause and word in it. Smith v.
Clinkscales, 102 S.C. 227, 85 S.E. 1064, and Stewart
v. Morris, 84 S.C. 148, 65 S.E. 1044.
In 6 R. C. L. 841, quoted with approval in
Chatfield-Woods Company v. Harley, 124 S.C. 280, 117
S.E. 539, it is said:
"Where the language of the contract is contradictory,
obscure, or ambiguous, or where its meaning is doubtful, so
that it is susceptible of two constructions, one of which
makes it fair, customary, and such as prudent men would
naturally execute, while the other makes it inequitable,
unusual, or such as reasonable men would not enter into, the
interpretation which makes a rational and probable agreement
must be preferred."
In 6 R.
C. L. 837, also quoted with approval in the same case, it is
said:
"The subject-matter of the contract and the purpose of
its execution are material to the ascertainment of the
intention of the parties and the meaning of the terms they
use, and, when these are ascertained, they must prevail over
the dry words of an agreement."
In
Merrill-Ruckgaber Company v. U. S. (49 Ct. Cl....
