February 17, 1958.
On August 6, 1954, Sherwood Mishoe, the respondent herein, purchased from Prince Motor Co., Inc., of Tabor City, North Carolina, a new 1954 Chevrolet automobile for a total price of $2,133.99, of which $650.00 was paid at the time. The deferred balance of $1,483.99 was payable $600.00 on September 6, 1954 and $883.99 on August 6, 1955. The usual conditional sales contract or chattel mortgage was executed and delivered to the Prince Motor Co., Inc., by the respondent. On the same day Prince Motor Co., Inc., sold and assigned this conditional sales contract or chattel mortgage to General Motors Acceptance Corporation, the appellant herein, and guaranteed the payment thereof. The total time price of the automobile purchased included finance charges and car insurance.
The respondent sought damages against the appellant for its alleged fraud and deceit, and the action resulted in a verdict for the respondent in the sum of $800.00 actual damages, and $700.00 punitive damages.
The complaint alleges the purchase by the respondent of the automobile in question from Prince Motor Co., Inc., and the payment of $650.00 as a down payment, and the execution by the respondent of a conditional sales contract providing for the subsequent payments on the said automobile on September 6, 1954 in the amount of $600.00, and on August 6, 1955 of the balance of $833.99. It is also alleged that on September 10, 1954, the respondent being in default of the payment due on September 6, 1954, that a representative acting in behalf of the appellant made false representations to the respondent which induced him to go to Tabor City, North Carolina, where the appellant took possession of the said automobile covered by the conditional sales contract, in consequence of which the respondent was damaged to the extent of his equity in said automobile. The complaint alleges that the respondent tendered to the representative of the appellant the amount due on September 6, 1954, with the interest for a period of four days; and that the said tender was refused by the representative of the appellant, and that
"he would like for the plaintiff to accompany him to Tabor City, North Carolina, so that the amount with interest could be correctly computed and the account handled satisfactorily; that at the time the said statement was made, the representative of the defendant knew the statement was false in fact, and knew that the amount would not be computed at Tabor City, North Carolina, with interest, and at the time it was made with a false intent to induce the plaintiff to accompany him to Tabor City, North Carolina, and was made with the intent to injure the plaintiff, and the said false statement was made with the intent that the plaintiff rely on said false statement to his detriment."
This case came on for a jury trial before the County Court of Horry County on May 22, 1956. The appellant made a motion for a nonsuit at the close of the testimony by the respondent, and for a directed verdict as to both actual and punitive damages at the close of all the testimony. These motions were refused by the County Judge, who ruled that a proper construction of the conditional sales contract involved in this case should be interpreted as giving to the respondent a thirty day period of grace, commencing on the date when payment under the contract became due, only after which the appellant would have a right to the possession of the automobile under the contract. The trial Judge, in his charge to the jury, stated that he had ruled, as a matter of law, that the respondent was not in default in the payment on the conditional sales contract on September 10, 1954, at the time of the repossession of said automobile by the appellant. The appellant moved for judgment non obstante veredicto and alternatively for a new trial. All of these motions were refused. Timely notice of intention to appeal to this Court was given. The appellant has filed nineteen exceptions to the rulings of the trial Judge and they raise the following questions: (1) Did the trial Judge commit error in holding as a matter of law, and so charging the jury, that the respondent was not in default in payment under the conditional sales contract at the time of the repossession of the automobile by the appellant, and in charging the jury it could consider this circumstance in determining the existence of fraud on the part of the appellant, and in fixing the damages to be awarded the respondent? (2) Were the representations as made by the appellant actionable as fraud? (3) Did the representations of the appellant cause the respondent legal damage?
The provisions of the conditional sales contract or chattel mortgage, pertinent to this appeal, are as follows:
"3. Time is of the essence of this contract. Any instalment or amount payable hereunder, if unpaid five (5) days after it becomes due, shall include interest thereon at the highest lawful contract rate from the due date. In the event that any instalment shall not have been paid within thirty (30) days after it becomes due and payable the purchaser expressly acquiesces in the right of the holder of this contract to delegate a representative to endeavor in person to collect such unpaid instalment and, in acknowledgment thereof, the purchaser hereby agrees to pay a further charge in a sum equal to give (5%) per cent of such unpaid instalment, but such charge shall neither be less than $1.00 nor exceed $5.00 in any event. The purchaser agrees, in the event that this contract is placed in the hands of an attorney for collection, to pay fifteen (15%) per cent of the amount due or such lesser sum as may be permitted by law as attorney's fees.
"4. In the event purchaser defaults on any payment due on this contract * * * the seller shall have the right at his or its election to declare the unpaid balance, together with any other amount for which the purchaser shall have become obligated hereunder, to be immediately due and payable. Further, upon such default or event, seller or any sheriff or other officer of the law may take immediate possession of said property without demand (possession after default being unlawful), including any equipment or accessories thereto, and for this purpose seller may enter upon the premises where said property may be and remove the same. * * *"
The answer to the first question above stated depends upon a proper construction of paragraph 3 of the conditional sales contract. The function of the Courts is to construe contracts of litigants and not to make them. Ellis v. Capital Life & Health Ins. Co., 229 S.C. 388, 93 S.E.2d 118. Contracts should be liberally construed so as to give them effect and carry out the intention of the parties. Wise v. Picow, 232 S.C. 237, 101 S.E.2d 651. In the case of Charleston & W.C. Ry. Co. v. Joyce, 231 S.C. 493, 99 S.E.2d 187, we quoted with approval from the case of Sanders v. General Motors Acceptance Corporation, 180 S.C. 138, 185 S.E. 180, 182, the following:
"`The words of a contract will be given a reasonable construction, where that is possible, rather than an unreasonable one, and the court will likewise endeavor to give a construction most equitable to the parties, and which will not give one of them an unfair or unreasonable advantage over the other. So that interpretation which evolves the more reasonable and probable contract should be adopted, and a construction leading to an absurd result should be avoided.' 13 C.J. § 511, p. 540."
And again from Sanders v. General Motors Acceptance Corporation, supra:
"`"Instruments should receive a sensible and reasonable construction and not such a construction as will lead to absurd consequences or unjust results." Fairbanks, Morse & Co. v. Twin City Supply Co., 170 N.C. 315, 86 S.E. 1051. Chatfield-Woods Co. v. Harley, 124 S.C. 280, 117 S.E. 539, 541.
"A principle of construction which is also well settled is, that where one construction would make a contract unusual and extraordinary and another construction, equally consistent with the language employed, would make it reasonable, fair, and just, the latter construction must prevail. Stein v. Archibald, 151 Cal. 220, 90 P. 536."
We have held that a conditional sales contract is in legal effect a chattel mortgage. Speizman v. Guill, 202 S.C. 498, 25 S.E.2d 731; and the primary object in construing a chattel mortgage is to ascertain the intention of ...