Masterson v. Sine

Plaintiffs owned a ranch as tenants in common which they conveyed to Defendants by a grant deed reserving the right to purchase the property for the same consideration as being paid plus depreciation value of any improvements grantee made. Plaintiffs went bankrupt and his trustee in bankruptcy and his wife brought this declaratory relief action to establish their right to enforce the option. The case was tried without a jury. Over the Defendants’ objection the court admitted extrinsic evidence that by the same consideration as being paid both the grantors and grantee meant the sum of $50,000.00 and by depreciation value they meant the depreciation value of improvements to be computed by deducting from the total amount of any capital expenditures made by Defendants the amount of depreciation allowable under United States income tax regulations as the time of exercising the option. The court also precluded that the parol evidence rule precluded admission of extrinsic evidence of fered by Defendants to show that the parties wanted the property kept in the Plaintiffs’ family and that the options were personal to the grantors and could not be exercised by the trustee in bankruptcy. The court entered judgment for the Plaintiffs declaring their right to exercise the option.