Masterson v. Sine case brief

Masterson v. Sine
68 Cal. 2d 222
Synopsis:
-Defendant grantees appealed from a judgment of the Superior Court of Glenn County (California) in favor of plaintiff grantors in an action for declaratory relief to establish the grantors’ right to enforce an option to repurchase certain real property.

Facts:
-The grantees appealed from a trial court judgment holding that the grantors, a bankruptcy trustee and the debtor’s wife, had a right to exercise an option to repurchase certain real property. Over the grantees’ objection, the trial court admitted extrinsic evidence showing that the repurchase price was a specified sum plus the cost of improvements less their depreciation value.
-The trial court also determined that the parol evidence rule barred extrinsic evidence offered by the grantees to show that the parties intended to keep the property in the family and the option could not be exercised by the trustee in bankruptcy.

Issue:
was the option provision too uncertain to be enforced so that parol evidence should not heave been admitted as to clarify its meaning?

Holding:
-The court reversed, holding that, although the trial court properly admitted extrinsic evidence of the purchase prices, the trial court erred in excluding the extrinsic evidence showing that the option was personal to the grantees.

Rule:
-Evidence of oral collateral agreements should be excluded only when the fact finder (the jury) is likely to be misled

Analysis:

• The crucial issue in determining whether there has been an integration is whether the parties intended their writing to serve as the exclusive embodiment of their agreement. The instrument itself may help to resolve that issue. It may state, for example, that there are no previous understandings or agreements not contained in the writing, and thus express the parties’ intention to nullify antecedent understandings or agreements. Any such collateral agreement itself must be examined, however, to determine whether the parties intended the subjects of negotiation it deals with to be included in, excluded from, or otherwise affected by the writing. Circumstances at the time of the writing may also aid in the determination of such integration.

• Even under the rule that the writing alone is to be consulted, it was found necessary to examine the alleged collateral agreement before concluding that proof of it was precluded by the writing alone. It is therefore evident that the conception of a writing as wholly and intrinsically self-determinative of the parties’ intent to make it a sole memorial of one or seven or 27 subjects of negotiation is an impossible one.

• Evidence of oral collateral agreements should be excluded only when the fact finder is likely to be misled. The rule must therefore be based on the credibility of the evidence. One such standard permits proof of a collateral agreement if it is such an agreement as might naturally be made as a separate agreement by parties situated as were the parties to the written contract.

• An option agreement is ordinarily presumed to be assignable if it contains no provisions forbidding its transfer or indicating that its performance involves elements personal to the parties. The fact that there is a written memorandum, however, does not necessarily preclude parol evidence rebutting a term that the law would otherwise presume.

Conclusion:
The court reversed the judgment of the trial court.

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