This is an appeal from a judgment in favor of defendants, Kenneth J. Patzman and Kathryn N. Patzman, his wife, and Hearon Realty and Mortgage Company, an Arizona corporation, and against plaintiff, Paul K. Marshall. Among other things, the judgment, in effect, declared a forfeiture to Patzman of all monies paid by Marshall on the purchase price of stock in the Bill Edel Motors, Inc. Marshall and Patzman will be hereinafter designated as such. The Hearon Realty and Mortgage Company as Hearon Realty and the Commеrcial Credit Corporation as Credit Corporation.
Marshall in April 1954, entered into a written contract with Patzman through Hearon Realty to buy 75 shares of stock of Bill Edel Mоtors, Inc., an Arizona corporation, referred to in the pleadings, as the Bill Edel Motors Co., and will hereinafter be referred to as the Motor Co. The total issue оf stock outstanding was. 150 shares issued as follows: Patzman 74-shares, and his wife, Kathryn Patzman, 1 share; Edel 74 shares and his wife,. Laura E. Edel, 1 share.
It takes but little mathematical ability to readily ascertain that the aggregate of these amounts required by Patzman to be paid as a consideration for the stock he contracted to sell to Marshall, is the sum of $16,502.68 and not $12,500 as claimed by the parties.
We believe it to be the universal rule of construction that where there is аn inconsistency between general provisions and specific provisions of a contract that the specific provisions ordinarily qualify the meaning of the general provisions. Restatement of the Law, Contracts, Section 236(C). In State v. Commercial Casualty Ins. Co.,
“* * * It is a rule that, where there are general and special provisions in a contract, relating to the same thing, the special will control over the general provisions, and, if the contract is fulfilled according to the spеcial provisions, the contractor has fully complied with the terms of his contract. * * *”
Richard Clothing Mfg. Co. v. Gutstein-Tuck, Inc.,
There is likewise no merit to his argument that Patzman did not benefit ■as a result of Marshall’s payment of said sum to the Credit Corpоration. As above stated Patzman’s stock in the Motor Co. was at that time held by the Credit Corporation as security for the payment of said ■sum of $4,002.68. His stock was liable for thе full amount of said sum in the ■event of default in making monthly payments thereon. The Credit Corporation ■could have sold either Patzman’s stock •or Edel’s stock, or both, to satisfy such indebtedness to it. Therefore, it cannot be said that Patzman did not benefit from Marshall’s payment of such debt. He not only procured the release of his stock from the encumbrance against it but he procured its physical release to him, which was necessary in order for him to assign and deliver title to it to Marshall. The stock was delivered to him by the Credit Corporation and he had possession and control thereof and title thereto at the date of trial and the court committed reversible error in its conclusion of law to the effect that Patzman was not benefited by such payment.
We further hold that $8,002.68 or even $4,000 forfeiture as liquidated damages on a $16,502.68 total purchase price is unconscionable under the circumstances of this case. There isn’t any showing that Patzman has suffered any damage whatever as a result of the breach by Marshall. Only approximatеly two weeks intervened between the execution of the contract and its breach. Marshall at no time either had possession or control of the stock оr title thereto, and so far as the record discloses he did not participate in the operation of the business of the Motor Co. or receive any benеfits therefrom.
We held in Tennent v. Leary, Ariz.,
In Perkins v. Spencer,
“ * * such stipulation is, as a general rule, enforceable, if the amount stipulated is not disproportionate to the damagеs actually sustained.’ * * * ” (Citing a number of Utah cases.)
It also quoted Restatement of the Law, Contracts, Section 339, which is as follows :
“(1) An agreement, made in advance of brеach, fixing the damages therefor, is not enforceable as a contract and does not affect the damages recoverable for the breach, unless
“(a) the amount so fixed is a reasonable forecast of just compensation for the harm that is caused by the-breach, and
“(b) the harm that is caused by the breaсh is one that is incapable or very difficult of accurate estimation.”
The Utah court held that the-amount was not a reasonable forecast of just compensation for the harm caused by the breach and that the damage suffered is not such as is incapable of accurate determination. It concluded by saying in substаnce, that the amount sought to be-forfeited was unconscionable as liquidated damages and was instead a penalty. Utah is committed to the rule, just as we are,, thаt a provision for forfeiture in a contract is enforceable if reasonable, otherwise, it is not.
For the reasons above stated the judgment is reversed and remanded with directions to the trial court to determine what damages, if, any, Patzman suffered as a-result of Marshall’s breach of his contract with him.
