Masterson v. Sine

68 Cal. 2d 222, 436 P.2d 561 (1968)


Dallas and Rebecca Masterson (P) owned a ranch as tenants in common. They conveyed the ranch by grant deed to Dallas' sister and her husband, the Sines (D). P reserved an option to repurchase the ranch within 10 years from the date of conveyance for the consideration paid by D plus the depreciation value of any improvements. Mr. Masterson went bankrupt. Mrs. Masterson and her husband's trustee in bankruptcy (P1) brought a declaratory relief action to establish their right to enforce the option. The case was tried without a jury and over Ds’ objection the trial court admitted extrinsic evidence that by “the same consideration as being paid heretofore” both the grantors and the grantees meant the sum of $50,000 and by “depreciation value of any improvements” they meant the depreciation value of improvements to be computed by deducting from the total amount of any capital expenditures made by Ds allowable under tax regulations as of the time of the exercise of the option. The court also determined that the parol evidence rule precluded admission of extrinsic evidence offered by Ds to show that the parties wanted the property kept in the Masterson family and that the option was thus personal to the grantors and could not be exercised by the trustee in bankruptcy. The court gave the judgment to Ps declaring their right to exercise the option. Ds appealed; the option provision was too uncertain to be enforced and extrinsic evidence as to meaning should not have been admitted.