This section contains the nature of the case and procedural background.

Schwenn (P) acquired real property in 1965. The property was generating oil and gas royalties pursuant to a lease with Atlantic Richfield. In 1969, P conveyed the oil and gas royalties to her daughter and son in law by grant deed which was duly recorded. In 1974, P then sold the property to Kaye (D). There was no mention in the written offer or the escrow instructions regarding any mention of oil and gas rights, royalties, or leases. Escrow revealed the property was subject to an oil and gas lease but for unexplained reasons did not reveal the conveyance of rights in the oil and gas lease. An amendment to the escrow was added that the lease would be assigned if assignable after the close of escrow. After close of escrow, Atlantic Richfield sent royalty payments to D. P complained, and Atlantic Richfield stated that no further royalties would be paid without a court order. P asked that the gas rights be reconveyed from her daughter. The trial court ruled for quiet title in D under the doctrine of after-acquired title.

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