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and sale, not as an option, where buyer was obligated to proceed
with the purchase after inspection contingency was satisfied);
Welk v. Fainbarg, 63 Cal. Rptr. 127, 132-133 (Ct. App. 1967)
In the instant case, the bulk of the evidence establishes
that Peterson had no legal authority to require specific
performance by petitioner. Petitioner was not obligated to
exercise the option or otherwise liable to pay the purchase price
to Peterson if petitioner decided not to exercise the option. In
the communications between petitioner and Peterson, Peterson
referred to the exercise of the option contract as something
petitioner could exercise or not as he chose. The communications
between petitioner and Peterson referred to Peterson as the
owner.
Although we conclude that the agreement constituted only an
option and not a purchase or sale of the property itself, we
consider petitioner’s claim that he held an equitable ownership
interest in the property.
Petitioner argues that under California law he should be
considered to beneficially own the property. However, under
California law beneficial ownership contrary to legal title may
be established only by clear and convincing proof. Cal. Evid.
Code sec. 662 (West 1995); see Pac. Sw. Realty Co. v. County of
Los Angeles, 820 P.2d 1046, 1052 (Cal. 1991).
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