Materson v. Sine

1968 California Supreme Court

• Dallas and Rebecca, husband and wife, own ranch as tenants in common, convey ranch to Medora and Lu (Medora = Dallas’ sister) with option to repurchase ranch for particular price plus value of improvements minus depreciation.
• Dallas is now bankrupt. Trustee is acting to protect unsecured creditors. Rebecca is siding with trustee, because she will get half of property.
• Defendants claim that option provision is ‘too uncertain to be enforced’–i.e., depreciation is not clearly defined. Other argument is that court didn’t allow enough evidence–that option was ‘personal’ to keep ranch within family.
• Dissent: this is form of fraud on creditors.
• UCC test: as liberal towards admitting evidence as any parol evidence test.
• Fact finder is this case is not a jury but lower court, thus ‘subjective jury’ justification for Parol Evidence Rule doesn’t apply (although since the rule is being changed here, it will be changed also in cases with a jury).
• Generally with land transfers, law especially requires written record, even though Traynor is allowing non-written evidence here.
• Inconsistency with Traynor’s opinion: options are, by default, assignable, thus the fact that parties did not include provision as to whether or not option was assignable doesn’t necessarily mean they didn’t contract one way or the other on it–rather, you would assume they meant in the contract that the option was assignable.

• Integration or merger clause: provision in contract to state parties’ intention that everything be embodied in this writing.
• Lots of cases where integration clauses work, lots of cases where they don’t, but it does increase the probability substantial that a court will not allow in parol evidence.

Author: international

Mentioned in these Entries

Parol Evidence Rule.