Summary of Masterson v. Sine
Supreme Court of California, 1968.
Facts: Dallas and his wife Rebecca owned a ranch as tenants in common. They conveyed it to Medora and Lu Sine by a grant deed that contained a provision whereby the grantors had an option to purchase the property for the same consideration. It was a family transaction (they were all related- long story). Dallas filed for bankruptcy and Rebecca and the trustee in bankruptcy brought this declaratory relief action to establish their right to enforce the option.
Procedure: The lower court denied admission of D’s extrinsic evidence that showed that the parties wanted to property kept in the Masterson family and that the option was therefore personal to the grantors and could not be exercised by the trustee in bankruptcy. The court ruled in favor of P.
Issue: Did the court err by denying admission of the D’s extrinsic evidence?
Rationale: Parol evidence may be used to prove elements of the agreement not reduced to writing. Many cases have allowed the admission of separate oral agreements as to any matter on which written document is silent and which is not inconsistent with its terms even though the instrument appeared to state a complete agreement. In the current case, the alleged collateral agreement is such that might naturally be made as a separate agreement from the written document. The defendants offered evidence that the parties agreed that the option was not assignable in order to keep the property in the Masterson family and the trial court erred in excluding that evidence. Reversed.