Masterson v. Sine
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? Holding: Yes 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.
Gianni v. R. Russel & Co., Inc.
Facts: Gianni ran a store selling, among other things, soft drinks. Russel bought the property where Gianni rented space for the store and its agent negotiated with Gianni for further leasing of the space. Gianni signed a 3-year lease that provided that he could "use the premises only for the sale of fruit, candy, soda water," etc. but could not sell tobacco. Gianni agreed not to sell tobacco and to pay increased rent, but in consideration he would have the exclusive right to sell soft drinks in the building. This stipulation was not included in the written lease. Soon after this, Russel rented an adjoining space in the building to a drug company without restricting that company's right to sell soda water and soft drinks. Procedural Posture: Gianni sued Russel for damages for breach of the alleged oral contract, alleging that the sale of soft drinks by the drug company had greatly reduced his profits. The trial court held for Gianni.
Issue: Is evidence of an oral contract admissible under the parol evidence rule when the written contract is the complete contract of the parties and covers the subject matter of the oral contract? Holding: No Rule: When a written lease is the complete contract of the parties and covers the subject matter of an alleged oral contract, evidence of the oral contract is inadmissible under the parol evidence rule. Reasoning: Where parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only evidence of their agreement. If the subject of an oral agreement relates to the same subject matter as the written contract, and they are so interrelated that both would be executed at the same time and in the same contract, the scope of the subsidiary agreement must be taken to be covered by the writing. Where the cause of action rests entirely on an alleged oral understanding concerning a subject which is dealt with in a written contract, it is presumed that the writing was intended to set forth the entire agreement as to that particular subject.
Mitchill vs Lath
Relevant Facts: The df/pet Laths owned a farm that they wished to sell, but there was an ice house they owned across the road. Pl/res Mitchill wanted to purchase the land but found the ice house objectionable. Mitchill claims “Df orally promised and agreed, for and in consideration of the purchase of their farm.” Pl then made a written contract to buy the property for $8400, cash and mortgage. She received the deed, entered into possession, and made improvements. The df have not had the ice house removed and do not intend to do so. Legal Issue(s): Whether the oral agreement, to remove the ice house, apart from the written contract may be enforced? Court’s Holding: No Procedure: Judgment of the Appellate Division and Special Term of S. Ct for PL, reversed and the complaint dismissed. Law or Rule(s): Standard to Measure closeness of the bond between: An oral agreement modifying a written contract must have 1) the agreement must in form be a collateral one; 2) it must not contradict express or implied provisions of the written contract; 3) it must be one that the parties would have ordinarily be expected to embody in the writing (the
oral agreement must not be so clearly connected w/ the principal transaction as to be part and parcel of it). Court Rationale: There is a written contract for the purchase and sale of land, $8400. The property is described by survey, and a full covenant deed of the premises was granted. An inspection of this contract shows a full and complete agreement, setting forth in detail the obligations of each party. The removal of the ice house is collateral in form, but it is closely related to the subject dealt with in the written agreement -so closely that it may not be proven. The Pl was personally part of the process from start to finish. The deed was handed to her, she signed the written contract. Plaintiff’s Argument: The agreement to remove the ice house was based on the same consideration to be performed by the dfs after the conveyance was complete. Defendant’s Argument: Removal of the ice house was not a condition within the written contract for the sale of the property. DISSENT: The written contract and the oral contract are bound together, using the same consideration. The problem is determining whether that bond is sufficiently close enough. collateral - secondary or to act as a security or bond. An implied provision concerning further obligations can exist only if it “so clearly connected with the principal transaction as to be part and parcel of it.” Exclusion of proof of the oral agreement on the ground that it modifies the written contract may be based only upon a finding that the written contract was intended to cover the oral negotiation for the removal of the ice house which lead to the contract of purchase and sale. To determine what the writing was intended to cover the subject matter of the writing with the subject matter of the negotiation.