In 1978, defendant purchased from Robert E. and Nola Saxton (Saxtons) certain land in Box Butte County, Nebraska, and inventory, fixtures, and equipment for
On June 15, 1984, defendant entered into a contract with plaintiffs for the sale to the latter of the same land plus additional lots, together with fixtures, equipment, and inventory for the farm supply business, now called Terry’s Husky, for $200,000, plus an additional amount for inventory. The plaintiffs paid $100,000 at the closing of the contract and gave their note for the remaining $100,000, to be paid in monthly installments of $1,338.40 beginning August 1, 1984, with an option in plaintiffs on April 1, 1988, to pay the balance due, and with certain additional payoff rights thereafter. Plaintiffs’ note was secured by a real estate mortgage on the land and lots рurchased and a security agreement on the equipment and fixtures.
The following provisions of the contract between the parties are particularly noted:
(1) Paragraph 8, which is denominated “Supply and Freight Agreement,” рrovides that for a period of 10 years, plaintiffs were to purchase all petroleum products from the defendant to the extent defendant could supply them. Subparagraph g of paragraph 8 provides that “[i]n the event that BUYERS [plaintiffs] desire to sell any of the premises, tanks, pumps, and pump read-out meters during the period of the supply and freight agreement as described above, SELLER [defendant] shall have first right of refusal to purchase them.” Thе provision then provides that any offer of purchase be conveyed by plaintiffs to defendant, which had 15 days to exercise its right of first refusal.
(2) Paragraph 12 provides as follows:
The interest of BUYERS [plaintiffs] in and to the premises and tanks, pumps and pump read-outs shall nоt be assigned to any other person without the express written consent of SELLER [defendant], except to a partnership or corporation owned solely by BUYERS and/or their spouses. . . . Violation of this clause by BUYERS shall be a matеrial breach of the provisions of this Agreement and shall empower SELLER, at its option, to declare the entire balance due and payable and to pursue such remedies which may be available at law or in equity.
In July 1985, plаintiffs determined, for financial reasons, to terminate the business, and on August 2, 1985, entered into a contract with Alliance Cooperative Association (Co-op) for the sale of the land, lots, fixtures, equipment, and inventory, and providing fоr a computation of a sales price therefor which in part required payment by the Co-op of the amounts due defendant under plaintiffs’ note with the defendant-previously described, the balance being due and payable April 1,1988, and Co-op to give its note therefor secured by a real estate mortgage and security agreement on the property sold. Plaintiffs submitted the proposed contract to defendant, pursuant to the provisiоns of paragraph 8 of the contract previously noted. Defendant did not exercise its rights under said paragraph but claimed a right to refuse to consent to any such sale under paragraph 12 thereof, and advised it would refuse unless plaintiffs included in the contract with Co-op the supply and freight agreement set out in paragraph 8. Such provision was not included in the contract, and defendant advised it would not consent to the sale.
Plaintiffs then brought this аction against defendant for a declaratory judgment as to their rights under the contract, alleging in substance that paragraph 8 controlled, and defendant having failed to exercise its right of first refusal, plaintiffs were free to рroceed with their contract with Co-op. Defendant in its answer alleged it had two remedies provided by paragraphs 8 and 12, that plaintiffs had breached the contract by selling to the Co-op without defendant’s consent, and thаt the Co-op was not honoring the supply and freight agreement contained in paragraph 8. Defendant also counterclaimed for damages alleged to have resulted from plaintiffs’ breach of the contract by sеlling to the Co-op without defendant’s consent and without the supply and freight agreement’s
The trial court sustained plaintiffs’ motion for summary judgment, holding that paragraph 8g of the contract of the parties was controlling, that paragraph 12 did not apply, and that plaintiffs were not required to include the supply and freight agreement in the sale to the Co-op. The trial court also overruled dеfendant’s motion for partial summary judgment. From this judgment, defendant has appealed and has assigned as error that the trial court (1) erred in finding paragraph 8 of the contract controlling, (2) erred in finding paragraph 12 of the contrаct did not apply, (3) erred in finding the supply and freight agreement lapsed by reason of plaintiffs’ ceasing to do business, and (4) erred in not finding a genuine issue of fact regarding a showing of good faith by plaintiffs in the performance of the contract.
Paragraphs 8 and 12 of the contract are inconsistent. Paragraph 8 provides that, within a specific timeframe, plaintiffs had a right to sell land and equipment subject only to a right of first refusal by defendant, the latter to bе exercised within a specific time and, if not so exercised, plaintiffs could then sell to their purchaser. Paragraph 12, on the other hand, provides that no sale or assignment in land or equipment by plaintiffs may be had without defendant’s consent. Such requirement follows paragraph 8 in the contract and is without limitation. Paragraph 8 is more specific than paragraph 12. In such a situation, the proper rule of construction is that the more specific term of the contract will control over the general provision of the contract as it relates to the same subject matter. 17A C.J.S.
Contracts
§ 313 (1963). Stated otherwise, “If the apparent inconsistency is between a clause that is general and broadly inclusive in character and one that is more limited and specific in its coverage, the latter should be generally held to operate as a modification and pro tanto nullification of the former.” 3 A. Cоrbin, Corbin on Contracts § 547 at 176 (2d ed. 1960). In this jurisdiction, the rule has been that where general and specific provisions in a contract relate to the same thing,
specific provisions will control over general provisions.
State v. Commercial Casualty Ins. Co.,
We further note that a contract provision requiring a seller’s consent to any future sale or assignment by the buyer is considered to have a limited apрlication; namely, that such provision is intended as security for the seller, and when such security is not at issue, the provision is not enforceable. The majority view is that a contract provision prohibiting assignment without the vendor’s consеnt does not preclude such assignment or sale if the contract has been fully performed
or if assignee offers and is able to complete performance.
The reason for such rule is that such provision is intended merely to safeguard performance on vendee’s part so that when performance has been rendered or is presently offered, the stipulation is of no consequence. Annot.,
To the same effect are the cases of
Wagner v. Cheney,
We note that nowhere in the record does it appear plaintiffs were in default on any amounts owed defendаnt. Plaintiffs
With respect to the supply and freight agreement contained in paragraph 8 of the contract between the parties, there is no provision in such paragraph, or elsewhere in the contract, that if plaintiffs were to sell the land or personal рroperty, they were required to include the supply and freight agreement as a part of the sale. Plaintiffs, upon ceasing business, were no longer required to purchase anything further under such contract and were entitled to sеll the property without further consideration thereof.
Defendant argues that there is an issue of good faith involved in plaintiffs’ performance under the contract which would bar the granting of summary judgment. Defendant asserts that it was bad faith on plaintiffs’ part in not including the supply and freight agreement in the sale contract with Co-op and that plaintiffs are required to prove financial reasons justified their terminating the business.
We note that the supply and freight agreement contains no precondition that must be met before plaintiffs could cease business or sell the property, except for the right of first refusal, and there is no minimum purchase requirement contained therein. We are unwilling, under the facts and pleadings of this case, to read in a condition that plaintiffs must prove good faith before ceasing to operate the business and selling the assets. Even if good faith were an issue, we believe the rule set forth in
HML Corporation v. General Foods Corporation,
We find no evidence in the record that defendant in this case met any such burden or adduced sufficient evidence to raise the issue. Moreover, as we examine the pleadings, we do not find such issue raised in defendant’s answеr or counterclaim or in its motion for partial summary judgment. We find defendant’s argument is without merit.
Accordingly, we hold that the trial court correctly sustained plaintiffs’ motion for summary judgment and overruled defendant’s motion for partial summary judgment.
Affirmed.