Court Opinion

ID: 9584642
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:51:01.707287+00
Date Added: 2024-06-11T15:11:11.696701
License: Public Domain

Bussey, Justice
(dissenting).
I find myself unable to agree with the result of the majority opinion in this case. It is my considered opinion that the judgment of the lower court should be reversed and the cause remanded for a new trial.
The majority opinion, as well as the decision of the lower court, is based on the premise that there is no ambiguity in the contract between the parties. Considering the contract as a whole, it appears to me that there is a very obvious ambiguity in paragraph 3 thereof, which ambiguity gave rise to this action.
The first portion of paragraph 3 is as follows:
*167“The District agrees to pay the Commission for water at monthly intervals. The rate shall be 10‡ per thousand gallons or the published rate, whichever may be lower. The Commission’s published rates are hereto attached and made a part of this Agreement.”
Up to this point it is crystal clear that the foregoing language, in the light of the other paragraphs of the contract, • established a ceiling of ten cents per thousand gallons for a period of thirty years, with a lower rate to be paid if the volume purchased by the District should entitle the District to a lower price under the published rates.
The language of paragraph 3, above quoted, is in accordance with the letter in evidence from Mr. R. B. Simms, Superintendent of the Spartanburg Water Works, to the attorney who prepared the contract, wherein Mr. Simms said, “As to the rate per million gallons, I would suggest that you make the contract one hundred dollars ($100.00) per million gallons or the published rate for the Inman-Campobello District depending on the cheaper rate.”
The ambiguity arose when there was added to the contract, also at the request or suggestion of Mr. Simms, the last sentence of paragraph 3, which reads as follows:
“It is further agreed that this contract is made subject to the rules and regulations of the Commission, and such rules and regulations and the water rates above referred to shall at all times be subject to any change made by the Commission affecting all consumers of the same class.”
This last quoted sentence is, in my opinion, susceptible of more than one interpretation when the contract is considered in its entirety, and raises a serious question as to what was the intention of the parties. The respondents contend the last sentence gives them the right to raise the contract or ceiling price set forth in the second sentence, as well as its published rates. While the language is susceptible of this construction, such construction would emasculate from the second sentence the words, “whichever may be lower”. The language *168of the last sentence, on the other hand, is clearly susceptible of the construction contended for by the appellants, which is that the Commission reserved the right to raise its published rates to consumers but not the contract or ceiling price, which construction is entirely logical when the contract is viewed in its entirety.
Strongly supporting the contention of the appellants as to the construction of the contract is the meaning of the word “consumer”, which word, as far as I know, has never been heretofore defined by this court. Numerous courts, however, have had occasion to define the same. A comprehensive definition of the term is as follows:
“Consumer is one who uses economic goods and so diminishes or destroys their utilities; opposed to producer; and 'consume' means to use up, expend, waste, devour, with synonyms of destroy, swallow up, engulf, absorb, waste, exhaust, spend, expend, squander, lavish, dissipate, burn up.”
See Ex part Mehlman, 127 Tex. Cr. R. 257, 75 S. W. (2d) 689; Union Portland Cement Co. v. State Tax Commission, 110 Utah 135, 170 P. (2d) 164; St. Paul & Tacoma Lumber Co. v. State, 40 Wash. (2d) 347, 243 P. (2d) 474.
The “consumer” is the last person to whom property passes in the course of ownership and such is the test of a retail transaction. Paramount-Richards Theatres v. State, 256 Ala. 515, 55 So. (2d) 812.
Under a contract to furnish electrical power to a distributing company, the distributing company was held not to be a consumer in the case of Ohio Gas, Light & Coke Co. v. Lake Shore Power Co., Ohio, 3 Ohio Law Abst. 120.
According to the weight of authority from other jurisdictions, the appellant District here is not a “consumer” in either the ordinary or legal sense of the word. The published rates of the Commission deal with rates to consumers and make no reference whatsoever to prices or rates to contract purchasers at wholesale for the purpose of distribution.
*169Therefore, when the contract language is “water rates above referred to shall at all times be subject to any change made by the Commission affecting all consumers of the same class”, such language is clearly susceptible of the interpretation that the parties in using the words “water rates above referred to” had in mind only the published rates referred to in the third sentence of paragraph 3, the published rates being the only rates mentioned which affected the consumers of the same class or any class. It was only natural that the , Commission would wish to reserve the right to change its published consumer rates to avoid any contention on the part of the District during the thirty year period of the contract that the published rates to consumers, attached to and made a part of the contract, were binding throughout the thirty year period.
Stated another way, according to the contention of the appellants when the last sentence of paragraph 3 was added to the contract the Commission was simply saying to the District, “We reserve the right to change our published rates to consumers throughout the period of the contract. Should we raise our published rates to consumers, such raise might result in you, the District, never having the benefit of a price lower than 10‡ per thousand gallons, regardless of the volume of water purchased by you. Of course, should we decide to lower our published rates to consumers, you, the District, will get the benefit thereof.” The construction placed upon the language by the appellants gives meaning and effect to all of the words and phrases in paragraph 3, whereas the construction contended for by the respondents has the effect of emasculating portions of paragraph 3.
The majority opinion, after arriving at what I think is an erroneous conclusion that the contract is unambiguous, proceeds to construe the contract and in doing so overlooks what I consider to be very material parts of the contract. The opinion proceeds on the premise that the only purpose of the contract was to provide the District with an adequate supply of water. This was, of course, one purpose, but far from *170the only purpose. The contract sets forth in detail among its purposes that the City of Spartanburg through its Commissioners of Public Works had a supply of good water available in excess of its requirements, and that the Commission had determined, as a fact, that it would greatly benefit the City of Spartanburg to make such excess water available to the District on reasonable terms and conditions.
Paragraph 5 of the contract shows a purpose to tie the contract to the bonded indebtedness incurred by the District for a period of thirty years, that being the period of time required for repayment of the bonded indebtedness. No other reason for making reference to the bonded indebtedness in the contract is readily apparent. In this connection, if the District entered into a contract with the Commission for a thirty year period without some firm limitation upon the cost of the water, such would, in effect, vest in the Commission power to force taxes to be raised in the District in order to pay the bonded indebtedness incurred by the District. Was such the intention of the parties?
Paragraphs 1 and 2 of the contract show a purpose on the part of the Commission to limit the amount of water which it would ever be required, during the thirty year period, to furnish the District at a firm contract or ceiling price, the District being allowed to make only one connection, the expense being paid by the District, and the amount of water being limited to the capacity of the main transmission line flowing under gravity pressures at the meter or point of connection.
The circuit judge held, his holding being quoted with approval in the majority opinion, that the appellants’ interpretation of the agreement must be denied as being a very unreasonable and unfair construction and interpretation thereof, and that it would most certainly bring about a most inequitable result to the defendants. The majority opinion makes the statement. “The record shows that the increase applied to appellants was the same as applied to all consumers of the same class.”
*171The holding by the lower court and the quoted statement in the majority opinion are discussed together because they largely involve the same facts. In my view, neither of them is supported by the contract or the record, which brings us to a consideration of certain pertinent facts disclosed by the record. To begin with, there is an absence of any evidence tending to show that the construction of the contract contended for by the appellants would bring about a very inequitable result as to respondents.
It is undisputed that at the time of the contract and at the time of the raise in rates, the District here involved was the only district purchasihg water from the Commission at wholesale for resale through its own distribution system.
The witness Mills, Secretary-Treasurer of the Commission, testified that the District was under the “special contract class” and Mr. Simms, Superintendent of the Commission, referred to the District as being on the “industrial rate”. Neither the published rates of the Commission, attached to and made a part of the contract, nor the rate sheet published as being effective May 1, 1957, make any reference whatsoever to a special contract class, an industrial rate or a district purchasing water at wholesale for retail sale.
In fairness to the view of the majority, it should be noted that the statement of the case contains the following language :
“On or about June 1, 1957, the Commissioners of Public Works of the City of Spartanburg raised the rate for all customers of the same class as Inman-Campobello Water District to per thousand gallons, * * *”
The appendix reflects that such was inserted therein by order of the circuit judge settling the case on appeal, moreover, the quoted language does not reflect the fact that the said District was the only customer of that class. I see no other basis in the record for the statement that “the increase applied to appellants was the same applied to all consumers of the same class.” The rate of increase was the same as was applied to retail consumers, in the City of Spartanburg, *172but I think the District, while a customer, was not a consumer and certainly not a retail consumer.
Upon the record before us, I conclude that rather than inequity resulting to the City of Spartanburg from a decision favorable to the appellants, it is most likely that an inequitable result to the appellants will follow the affirmance of the lower court decision.
With due respect to the concurring opinion of Mr. Chief Justice Taylor, I do not think that the quoted colloquy between counsel and the court amounted to a concession on the part of counsel for appellant that there was no ambiguity in the contract. The entire record and the appeal, to my mind, negative such a concession.
Although in his order deciding the case the circuit judge did make the statement: “All the parties contend that the agreement being sued on is free from ambiguity * * in his order settling the case on appeal, also appealed from, the circuit judge said, “It was the court’s opinion that the contract was free from ambiguity, however, I could not state that the attorneys for appellants agreed to this.”
Of course, if the circuit judge had considered all of the evidence and made factual findings therefrom, his findings would have had the same force and effect as the verdict of a jury. This, however, the circuit judge did not do. He regarded the contract throughout as being free from ambiguity; found it unnecessary to consider the evidence, and, moreover, in arriving at his construction of the contract relied upon certain rules of construction which are normally resorted to only in aid of construction of ambiguous, rather than unambiguous, contracts.
For the reasons hereinabove stated, it is my conclusion that the decision of the lower court should be reversed and the cause remanded for a new trial with the parties being allowed to offer all admissible, relevant evidence which would tend to prove the true and real intent of the parties in the execution of this ambiguous contract.
Brailsford, J., concurs in result.