Case Name: DUNLAP ACRES, LTD. and Shannon Rentals, Ltd., Appellants v. INTERVEST DEVELOPMENT CORPORATION, Intervest Partners Corporation, Intervest Corporation, West Point Housing, L.P., Shannon Housing, L.P., J. Steve Nail and Rodney H. Dudley, Appellees
Court: Mississippi Court of Appeals
Jurisdiction: Mississippi
Decision Date: 2006-08-29
Citations: 955 So. 2d 345
Docket Number: No. 2005-CA-01271-COA
Parties: DUNLAP ACRES, LTD. and Shannon Rentals, Ltd., Appellants v. INTERVEST DEVELOPMENT CORPORATION, Intervest Partners Corporation, Intervest Corporation, West Point Housing, L.P., Shannon Housing, L.P., J. Steve Nail and Rodney H. Dudley, Appellees.
Judges: KING, C.J., LEE AND MYERS, P.JJ., AND CHANDLER, J., CONCUR. GRIFFIS, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY SOUTHWICK, BARNES, ISHEE AND ROBERTS, JJ.
Reporter: Southern Reporter, Second Series
Volume: 955
Pages: 345–355

Head Matter:
DUNLAP ACRES, LTD. and Shannon Rentals, Ltd., Appellants v. INTERVEST DEVELOPMENT CORPORATION, Intervest Partners Corporation, Intervest Corporation, West Point Housing, L.P., Shannon Housing, L.P., J. Steve Nail and Rodney H. Dudley, Appellees.
No. 2005-CA-01271-COA.
Court of Appeals of Mississippi.
Aug. 29, 2006.
Rehearing Denied Jan. 16, 2007.
Certiorari Denied April 12, 2007.
Brenda B. Bethany C. Michael Elling-burg, Jackson, Attorneys for Appellants.
Brooks R. Buchanan, Jackson, Attorney for Appellees.

Opinion:
IRVING, J.,
for the Court.
¶ 1. This controversy is over the appropriate interest rate that is due under two promissory notes that are in default. The chancellor concluded that the proper rate was the legal rate of eight percent (8%). Dunlap Acres, Ltd. and Shannon Rentals, Ltd. appeal and argue that the promissory notes provided for a higher interest rate.
¶ 2. We find no merit to Dunlap's argument. Therefore, we affirm the judgment of the chancellor.
FACTS
¶ 3. The relevant facts are not in dispute. Dunlap Acres, Ltd. ("Dunlap") developed a fifty-unit multi-family property, known as Dunlap Acres, in West Point, Mississippi. Shannon Rentals, Ltd. ("Shannon") developed a forty-eight-unit multi-family property, known as Shannon Rentals, in Shannon, Mississippi. In 1996, Intervest Development Corporation (Inter-vest) entered into negotiations with both Dunlap and Shannon for the purchase of both properties.
¶ 4. On April 11, 1996, Shannon sold the Shannon Rentals property to Intervest for the price of $132,400. As part of the sale, Shannon Housing, L.P. and Intervest, Shannon Housing L.P.'s general partner, executed a promissory note to pay Shannon the sum of $132,400. The promissory note was guaranteed by Intervest, Inter-vest Partners Corporation, J. Steve Nail, and Rodney H. Dudley.
115. On September 30, 1996, Dunlap sold the Dunlap Acres property to Intervest for the price of $140,000. As part of the sale, West Point Housing, L.P. and Intervest, West Point Housing, L.P.'s general partner, executed a promissory note to pay Dunlap the sum of $140,000. The promissory note was guaranteed by Intervest, Intervest Partners Corporation, J. Steve Nail, and Rodney H. Dudley.
¶ 6. In 1998, Dunlap commenced this action by filing a complaint against Inter-vest, Intervest Partners Corporation, In-tervest Corporation, West Point Housing, L.P., Shannon Housing L.P., J. Steve Nail, and Rodney H. Dudley. On October 17, 2000, the chancellor issued an opinion and order on Dunlap's and Shannon's motion for partial summary judgment that determined the amounts owed on the notes. On August 7, 2002, the chancellor issued an opinion and order on Dunlap's and Shannon's second motion for partial summary judgment that determined that the interest rate owed on the notes was eight percent (8%), pursuant to Mississippi Code Annotated section 75-17-1(1) (Supp.2005). On June 1, 2005, the chancellor entered an amended final judgment which held (1) that Intervest; Intervest Partners Corporation; West Point Housing, L.P.; Shannon Housing, L.P.; J. Steve Nail, and Rodney H. Dudley were in default and were liable to Dunlap and Shannon under the terms of the promissory notes for the purchase of the two parcels of property, and (2) that Intervest Corporation was not a party to the promissory notes and was not liable. The judgment also awarded $8,726.50 as reasonable attorneys' fees and reaffirmed the chancellor's earlier ruling that established the applicable interest rate on the promissory notes at eight percent (8%). It is from this final judgment that Dunlap and Shannon appeal.
STANDARD OF REVIEW
¶ 7. Since the issue is one of law, the chancellor's finding that the appropriate interest rate is eight percent (8%) is reviewed de novo. Miss. State Highway Comm'n v. Patterson, 627 So.2d 261, 263 (Miss.1993).
ANALYSIS AND DISCUSSION OF THE ISSUE
¶ 8. The only issue raised on appeal is whether the chancellor erred in her determination of the interest rate to be applied. Apparently, neither party sought to introduce parol evidence at the trial court level, as there is no issue or argument here that parol evidence should or should not have been allowed to illuminate the issue.
¶ 9. The promissory notes are virtually identical and contain the following language with regard to interest: "The whole of the principal sum and, to the extent permitted by law, any accrued interest, shall bear, after default, interest at the highest lawful rate then in effect pursuant [to] the laws of the State of Mississippi or of the United States of America." (emphasis added).
¶ 10. We begin by quoting the entire summary of Dunlap's argument as set forth in its brief: "There is no construction of law which would enable Defendants [Ap-pellees] to avoid liability to Plaintiffs [Appellants] for interest at the maximum rate allowable by law as specified in the contracts. That rate is 15% compounded annually." We will return to a discussion of this summary statement later in this opinion.
¶ 11. Dunlap and Shannon rely on Mississippi Code Annotated section 75-17-1(3) (Supp.2005), which provides:
Notwithstanding the foregoing and any other provision of law to the contrary, any partnership, joint venture, religious society, unincorporated association, or domestic or foreign corporation, whether organized for profit or nonprofit, may contract for and agree to pay a finance charge which will result in a yield not to exceed the greater of fifteen percent (15%) per annum or five percent (5%) per annum above the discount rate, excluding any surcharge thereon, on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where the lender is located, each calculated according to the actuarial method, on any contract, loan, extension of credit or other obligation under which the principal balance to be repaid shall originally exceed Two Thousand Five Hundred Dollars ($2,500.00), or on any series of advances of money pursuant to a contract if the aggregate of sums advanced or originally proposed to be advanced shall exceed Two Thousand Five Hundred Dollars ($2,500.00); and as to any such agreement, the claim or defense of usury by such partnership, joint venture, religious society, unineor- porated association, or corporation, or their successors, guarantors, assigns or anyone on their behalf is prohibited.
¶ 12. The chancellor rejected Dunlap's argument and agreed with Intervest that Mississippi Code Annotated section 75-17-1(1) was applicable. Section 75-17-1(1) provides that, "[t]he legal rate of interest on all notes, accounts and contracts shall be eight percent (8%) per annum, calculated according to the actuarial method, but contracts may be made, in writing, for payment of a finance charge as otherwise provided by this section or as otherwise authorized by law." The chancellor held that "in viewing the evidence in the light most favorable to the non-moving party this Court finds that consistent with [section] 75-17-1(1) the higher contract interest rate should have been in writing and the specific rate was not; therefore, this court finds that the 8% rate is applicable."
¶ 13. In resolving the issue before us, we look to the language of the promissory notes. "The most basic principle of contract law is that contracts must be interpreted by objective, not subjective standards. A court must effect a determination of the meaning of the language used, not the ascertainment of some possible but unexpressed intent of the parties." Cherry v. Anthony, 501 So.2d 416, 419 (Miss.1987). "Our concern is not nearly so much with what the parties may have intended, but with what they said, since the words employed are by far the best resource for ascertaining the intent and assigning meaning with fairness and accuracy." Facilities, Inc. v. Rogers-Usry Chevrolet, 908 So.2d 107, 111(¶7) (Miss. 2005). "[0]ur focus is upon the objective fact — the language of the [promissory notes]." Osborne v. Bullins, 549 So.2d 1337, 1339 (Miss.1989). We are not concerned with some secret thought or idea that may have reposed with one of the parties but which was not communicated to the other party. "When construing a contract, we will read the contract as a whole, so as to give effect to all of its clauses." Facilities, Inc., 908 So.2d at 111(¶ 7).
¶ 14. We conclude that the chancellor objectively interpreted the plain language of the promissory notes and reached the correct result. The notes provide that interest will be paid "at the highest lawful rate then in effect pursuant [to] the laws of the State of Mississippi or of the United States of America." The key phrase is "rate then in effect." While interest will be paid at the highest rate, that rate must be in effect at the time of the default. The common and ordinary meaning of something that is in effect is that it is in full force, operating, and functioning. The only rate in effect under the laws of the State of Mississippi when the default occurred was the default interest rate set forth in section 75-17-1(1).
¶ 15. An interest rate of fifteen percent is not presently the interest rate in effect in Mississippi. It was not the interest rate in effect when the promissory notes were executed or when the default occurred. While an interest rate of fifteen percent is allowed, it has to be placed in effect by the contracting parties. In other words, as the learned chancellor found, the parties have to contract for a specific rate of fifteen percent in order to place that rate in effect. That, the parties did not do.
¶ 16. Interestingly, as we have already noted, Dunlap, in summarizing its argument in its brief to this Court, says Inter-vest obligated itself by contract documents (the promissory notes) to pay "interest at the maximum rate allowable by law as specified in the contracts." The key phrase in this argument is "allowable by law." However, the promissory notes do not obligate Intervest to pay interest at the maximum rate allowable by law. The plain wording of the notes obligates Inter-vest to pay interest at the highest lawful rate then in effect. The highest interest rate that is allowable by law is not the highest interest rate that is in effect by law. If we were to accept Dunlap's interpretation of the language of the notes, we would have to find that, although no specific interest rate percentage is included in the interest provision, interest is to be paid at some figure which could be astronomical. We reach this conclusion because section 75-17-1(5), a subsection detailing the amount of finance charges that parties may agree to pay, seems to permit such a result.
¶ 17. While the dissent does not say so explicitly, it apparently concludes that section 75-17-1(3) is the appropriate code section to apply because, and only because, this section allows parties to contract for interest at the specific rate of fifteen percent per annum. The problem with this reasoning is that, while section 75-17-1(5) does not include the specific figure of fifteen percent per annum, it certainly appears to allow parties to contract for interest at a rate greater than or less than fifteen percent. If the parties contracted that interest will be paid at the highest lawful rate, how can it then be said that the rate of fifteen percent is the highest lawful rate? It cannot be because the parties included that figure in the promissory notes. They did not. Logically, the only reason for this conclusion by the dissent is that the fifteen percent figure is the highest interest figure specifically mentioned in the statutory interest provisions. However, does that make it the highest lawful interest rate? It does not. And since the dissent and Dunlap believe that the promissory notes obligate Intervest to pay interest at the highest lawful rate, why are they willing to settle for something considerably less? The dissent admits that section 75-17-1(5) permits a far higher interest rate than fifteen percent.
¶ 18. In concluding that a fifteen percent interest rate should apply, the dissent seems fixated on only a portion of the wording used by the parties, and by so doing, fails to heed the teachings of Facilities, Inc., that a contract must be read as a whole, giving effect to all of its clauses. The dissent believes our interpretation does not give effect to the word "highest," but we do not believe the dissent gives effect to the phrase "then in effect." We take one last look at the wording of the promissory notes: "any accrued interest, shall bear, after default, interest at the highest lawful rate then in effect pursuant [to] the laws of the State of Mississippi or of the United States of America." The phrase, "in effect," modifies or limits the phrase, "highest laicful rate." We reiterate: only one interest rate, was and is "in effect" in this state. Certainly, eontract- ing parties may place other rates in effect in their particular transaction. But, to do so, the rate has to be specified.
¶ 19. The dissent also suggests that if the chancellor found the interest provision ambiguous, she should have allowed parol evidence. First, that is not an issue in this appeal, and second, the chancellor did not find the provision ambiguous, even though Intervest urged that position.
¶ 20. Accordingly, we affirm the judgment of the chancellor.
¶ 21. THE JUDGMENT OF THE CHANCERY COURT OF HINDS COUNTY IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANTS.
KING, C.J., LEE AND MYERS, P.JJ., AND CHANDLER, J., CONCUR. GRIFFIS, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY SOUTHWICK, BARNES, ISHEE AND ROBERTS, JJ.
. For brevity and clarity in the remainder of this opinion, we refer to the Appellants as Dunlap and the Appellees as Intervest.
. Section 75-17-1(5) reads as follows:
Notwithstanding the foregoing and any other provision of law to the contrary, any borrower or debtor may contract for and agree to pay and any lender or extender of credit may contract for and receive any finance charge agreed to in writing by the parties, notwithstanding that such charge is in excess of that otherwise allowed on any contract, credit sale, obligation or other extension of credit, regardless of the security taken or the purpose of the extension of credit, under which the principal balance to be repaid originally exceeds Two Thousand Dollars ($2,000.00), or on any series of advances of money pursuant to a contract if the aggregate of sums advanced or originally proposed to be advanced exceeds Two Thousand Dollars ($2,000.00), or on any extension or renewal thereof; and as to any such agreement, the claim or defense of usury or violation of any law prescribing, limiting or regulating the rate of finance charge by any borrower or debtor, or his successors, guarantors, assigns or anyone on his behalf is prohibited.