Masterson v. Sine

• Masterson = ranch owner in California
• Sine = new ranch owner to whom the Masterson ranch was deeded on February 25, 1958
• The deed included a buyback option by Masterson in 10 years
• Later, Masterson went bankrupt

• Masterson's bankruptcy trustee sued Sine to exercise the buyback of the ranch.
• The trial court ruled that Masterson's bankruptcy trustee couldn't exercise the buyback option.
• Sine lost.

Does the parol evidence rule allow testimony to clarify the meaning of a writing or add terms not included in the writing (of the deed of transfer from Masterson to Sine)?

• The Sines argued that the buyback option couldn't be assigned to the bankruptcy trustee of Masterson.
• The Sines argued that there was an oral (parole) agreement to keep the ranch in the Masterson family--not the bankruptcy trustee.

Chief Justice Roger Traynor: The trial court properly allowed parol evidence regarding the meaning of the vague option terms.

The trial judge should've allowed parol evidence of the oral agreement, too, to limit the buyback option's assignability.

Reversed

The buyback option didn't include an integration clause.

The goals of the parol evidence rule are

• accuracy
• preventing fraudulent testimony

• Contracts_Farnsworth/Outline#Chapter_5-_Determining_the_Parties’_Obligations_Under_the_Contract
• Contracts_Ayres/9th_ed._Outline#A._Parol_Evidence_Rule