California Court of Appeals
155 Cal.App.3d 949 (1984)
Lillian Schwenn (plaintiff) owned a plot of land that was earning oil royalties pursuant to a lease with an oil company. In 1969, Schwenn granted the royalties as a gift to her daughter and son-in-law. In 1974, Schwenn sold the property to Richard and Johanna Kaye (defendants). A provision was added to escrow, stating that the royalties would be “assigned, if assignable,” to the Kayes. When the purchase of the property was completed, the Kayes began to collect royalty payments. Schwenn subsequently complained that her daughter retained the right to these royalties. Schwenn instructed her daughter to transfer the royalties back to her, so that her daughter would not become involved in the litigation. Schwenn then brought an action against the Kayes to ensure her right to the royalties. The trial court ruled in favor of the Kayes. Schwenn subsequently appealed to the California Court of Appeals.
Rule of Law
Holding and Reasoning (Compton, J.)
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