parol evidence rule

In August 1957, Essex Universal Corporation, a Delaware corporation, learned of the possibility of purchasing shares in Republic Pictures Corporation from Herbert J. Yates, a California resident who served as president and chairman of the board of Republic, a New York corporation with 2,004,190 shares of common stock outstanding listed on the New York Stock Exchange. Negotiations led to a contract signed on August 28, 1957, under which Essex agreed to buy and Yates agreed to sell between 500,000 and 600,000 shares at eight dollars per share. The contract provided for a partial payment of three dollars per share at the closing scheduled for September 18, 1957, with the balance due in twenty-four equal monthly installments thereafter, and included a clause allowing Essex to request the resignations of a majority of Republic's directors and the election of its own nominees in their place. Yates later specified that he would deliver 566,223 shares, representing 28.3 percent of the outstanding stock, and Essex formally requested the director replacements as permitted by the contract. The procedure involved eight of the fourteen directors resigning seriatim, with each being replaced by an Essex nominee elected by the remaining directors, a method permitted under Republic's charter and by-laws. On the closing date, Essex tendered bank drafts and cashier's checks totaling $1,698,690 payable to its banker Benjamin C. Cohen, but Yates rejected the tender upon advice of counsel, stating that there could be no deal. Essex commenced an action in New York Supreme Court seeking $2,700,000 in damages, which was removed to the United States District Court for the Southern District of New York based on diversity of citizenship. Yates moved for summary judgment solely on the ground that the provision for immediate transfer of director control was illegal per se and tainted the entire contract. The district court granted the motion, and Essex appealed to the United States Court of Appeals for the Second Circuit.

In 1978 John Rudzewicz, a Michigan resident and senior partner in a Detroit accounting firm, was approached by Brian MacShara about jointly applying for a Burger King franchise in the Detroit area. They submitted their application to Burger King’s Birmingham, Michigan district office, which forwarded it to the company’s Miami headquarters. During the ensuing four months Rudzewicz and MacShara negotiated with both the Birmingham district office and Miami headquarters over site-development fees, building design, computation of monthly rent, and assignment of liabilities. With some misgivings they obtained limited concessions from the Miami headquarters, signed the final agreements, and commenced operations in June 1979 for the Drayton Plains facility. The agreements stated that the franchise relationship was established in Miami and governed by Florida law, required all royalty, advertising, and rent payments to be sent to Miami, and obligated Rudzewicz to attend training in Miami. MacShara completed the training course there and the franchisees purchased $165,000 in equipment from Burger King’s Miami division. The Drayton Plains restaurant enjoyed steady business during the summer of 1979 but patronage declined after a recession began later that year. Rudzewicz and MacShara fell far behind on their monthly payments to Miami. Burger King headquarters sent notices of default and conducted prolonged negotiations by mail and telephone with the franchisees, but the negotiations failed and headquarters terminated the franchise. Rudzewicz and MacShara refused to vacate and continued to operate the facility as a Burger King restaurant. Burger King commenced suit in the United States District Court for the Southern District of Florida in May 1981. It invoked diversity and federal trademark jurisdiction. Burger King alleged breach of the franchise agreements by failure to make required payments in Miami together with trademark infringement. The district court denied Rudzewicz’s motion to dismiss for lack of personal jurisdiction, conducted a three-day bench trial, entered judgment against Rudzewicz and MacShara jointly and severally for $228,875 in contract damages, ordered them to close the restaurant or surrender possession, and awarded costs and attorney’s fees. Rudzewicz appealed to the Court of Appeals for the Eleventh Circuit, which reversed on the ground that the circumstances left Rudzewicz without reasonable notice of suit in Florida. The Supreme Court granted certiorari to review the jurisdictional ruling.

On the night of January 11, 1983, Nancy Beth Cruzan lost control of her car as she traveled down Elm Road in Jasper County, Missouri. The vehicle overturned, and Cruzan was discovered lying face down in a ditch without detectable respiratory or cardiac function. Paramedics were able to restore her breathing and heartbeat at the accident site, and she was transported to a hospital in an unconscious state. An attending neurosurgeon diagnosed her as having sustained probable cerebral contusions compounded by significant anoxia. The Missouri trial court found that permanent brain damage generally results after six minutes in an anoxic state, and it was estimated that Cruzan was deprived of oxygen from twelve to fourteen minutes. She remained in a coma for approximately three weeks and then progressed to an unconscious state in which she was able to orally ingest some nutrition. Surgeons implanted a gastrostomy feeding and hydration tube in Cruzan with the consent of her then husband. Subsequent rehabilitative efforts proved unavailing. She now lies in a Missouri state hospital in what is commonly referred to as a persistent vegetative state in which a person exhibits motor reflexes but evinces no indications of significant cognitive function. The State of Missouri is bearing the cost of her care. After it had become apparent that Nancy Cruzan had virtually no chance of regaining her mental faculties, her parents Lester and Joyce Cruzan, who serve as coguardians, asked hospital employees to terminate the artificial nutrition and hydration procedures. All agree that such a removal would cause her death. The employees refused to honor the request without court approval. The parents then sought and received authorization from the state trial court for termination. The trial court found that a person in Nancy's condition had a fundamental right under the State and Federal Constitutions to refuse or direct the withdrawal of death prolonging procedures. The court also found that Nancy's expressed thoughts at age twenty-five in conversation with a housemate friend suggested that given her present condition she would not wish to continue on with her nutrition and hydration. The Supreme Court of Missouri reversed by a divided vote. The court recognized a right to refuse treatment embodied in the common-law doctrine of informed consent but expressed skepticism about the application of that doctrine in the circumstances of this case. The court found that Cruzan's statements to her roommate regarding her desire to live or die under those conditions were unreliable for determining her intent and thus insufficient to support the coguardians' claim to exercise substituted judgment on Nancy's behalf. It rejected the argument that Cruzan's parents were entitled to order the termination of her medical treatment, concluding that no person can assume that choice for an incompetent in the absence of the formalities required under Missouri's Living Will statutes or the clear and convincing inherently reliable evidence absent here. The Supreme Court granted certiorari to consider the question whether Cruzan has a right under the United States Constitution which would require the hospital to withdraw life-sustaining treatment from her under these circumstances.