Masterson v. Sine

In Masterson v. Sine (1968) 68 Cal.2d 222, a trustee in bankruptcy brought an action to enforce a written option agreement which, on its face, entitled the bankrupt to obtain the conveyance of a parcel of real property. The defendants, who included the bankrupt's sister, had attempted to offer extrinsic evidence supporting their contention that the parties to the option agreement had intended the option only be exercised by a family member, as they wanted to keep the property in the family. The trial court had ruled that the parol evidence rule precluded admission of this evidence. (Id. at p. 224.) The California Supreme Court reversed, concluding "a collateral agreement such as that alleged 'might naturally be made as a separate agreement.'" (Id. at p. 228.) Masterson stated that "evidence of oral collateral agreements should be excluded only when the fact finder is likely to be misled" (Masterson v. Sine, supra, 68 Cal.2d at p. 227) and noted that "the Restatement of Contracts 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.' " (Id. at pp. 227-228.)