Latta v. Phillips

THIS
OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS
PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Sharron R.
Latta, f/k/a Sharron R. Dowless, Respondent,

v.

Donnie R.
Phillips, Appellant.

Appeal From Horry County

Steven H. John, Circuit Court Judge

Unpublished Opinion No. 2012-UP-036

Submitted January 3, 2012 – Filed January
25, 2012   

AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED

Johnny Gardner and Jonathan Hiller, both of
Conway, for Appellant.

William Paul Young, of North Myrtle Beach,
for Respondent.

PER CURIAM:  Donnie
R. Phillips appeals the circuit court's order finding he defaulted on a
promissory note.  On appeal, Phillips argues the circuit court erred in finding
(1) the interest rate pursuant to the
promissory note was fifteen percent per annum and (2) an $8,500 payment from
Sharron R. Latta constituted an advancement under the promissory note.  We reverse.[1]

1.  "One cardinal
rule of contract interpretation is to ascertain and give effect to the
intention of the parties."  S.C. Dep't of Transp. v. M & T Enters.
of Mount Pleasant, LLC, 379 S.C. 645, 655, 667 S.E.2d 7, 12 (Ct. App.
2008) (citation omitted).  "To determine the intention of the parties, the
court must first look at the language of the contract."  Id. at
655, 667 S.E.2d at 12-13 (citation and quotation marks omitted).  "The construction of a clear
and unambiguous contract presents a question of law for the court."  Id. at 655, 667 S.E.2d at 13 (citation omitted).  "Questions of law may be
decided with no particular deference to the [circuit] court."  Id. at 654, 667
S.E.2d at 12 (citation omitted).  "It is also a question of law whether
the language of a contract is ambiguous."  Id. at 655, 667 S.E.2d
at 13 (citation omitted).  "When a contract is unambiguous, clear, and
explicit, it must be construed according to the terms the parties have used, to
be taken and understood in their plain, ordinary, and popular sense."  Id.  "Where an agreement is clear and capable of legal construction, the court's
only function is to interpret its lawful meaning and the intention of the parties
as found within the agreement and give effect to it."  Id. (citation
omitted).  "A court must enforce an unambiguous contract according to its
terms regardless of its wisdom or folly, apparent unreasonableness, or the
parties' failure to guard their rights carefully."  Id. (citation
omitted). 

We find the circuit court
erred in determining the promissory note set forth an annual fifteen percent
interest rate.  In this case, the promissory note provides that the interest
will be fifteen percent of the $100,000 principal, payable at the closing of
the house built on lot #6.  Thus, under the plain and unambiguous terms of the
promissory note, Latta was entitled to $15,000- in interest at the house
closing in August of 2006.  Accordingly, the circuit court erred in finding
Phillips accumulated $40,322.60 in interest based on an annual accrual rate of
fifteen percent. 

The contract was silent as to
the interest rate upon defaulting on a promissory note.  Nonetheless, the
circuit court erred in determining the interest rate for default was fifteen
percent per annum.  South Carolina's courts have held that the interest rate
for default when the contract is silent about default shall be the statutory
legal interest rate.  See Langston v. S.C. R.R., 2 S.C. 248,
254 (1871).  Accordingly, we reverse and remand to the circuit court to
recalculate the interest Phillips accrued on the default of the promissory
note.

2.  We affirm the
circuit court's finding that an $8,500 payment from Latta constituted an
advancement under the promissory note.  The evidence before this court supports
the circuit court's finding that the operative language of the promissory note
did not limit Phillips's obligation to repay only those advancements that were
used for the construction of a home identified in the promissory note. 

AFFIRMED IN
PART, REVERSED IN
PART, AND REMANDED.

FEW, C.J., and
THOMAS and KONDUROS, JJ., concur.

[1] We decide this case without oral argument pursuant to
Rule 215, SCACR.