## Facts

- Lillian Schwenn owned Long Beach real property that generated oil and gas royalty payments under an oil company lease.
- In 1969, Schwenn conveyed her royalty interest as a gift to her daughter and son-in-law by a recorded grant deed.
- In 1974, Schwenn sold the real property to Richard and Johanna Kaye by deed purporting to convey fee simple title; the written offer and original escrow instructions did not mention oil and gas rights or royalties.
- During escrow, a preliminary title report disclosed the property was subject to the oil and gas lease but, for unexplained reasons, did not disclose the 1969 recorded conveyance of the royalty interest.
- Because the escrow materials referenced the lease, an escrow amendment was executed stating that the royalties would be “assigned, if assignable” to the Kayes after close of escrow.
- After escrow closed, the oil company sent royalty payments to the Kayes.
- Schwenn complained to the oil company that the royalties belonged to her daughter and son-in-law; the oil company suspended payments absent a court order.
- To keep her daughter and son-in-law out of the dispute, Schwenn asked them to reconvey the royalty interest to her, and she then sued the Kayes to quiet title to the royalties.
- After a court trial, the trial court quieted title in favor of the Kayes based on the doctrine of after-acquired title, and Schwenn appealed.

## Issues

1. Whether, under California Civil Code § 1106 (after-acquired title), Schwenn’s later reacquisition of the oil and gas royalty interest automatically passed to the Kayes because she previously conveyed the property to them in fee simple without reserving that interest.
2. Whether Schwenn’s claimed intent in obtaining the reconveyance, or equitable arguments tied to her prior gift to family members, could defeat application of § 1106 and change the effect of the 1974 conveyance.

## Decision

- The Court of Appeal affirmed the judgment quieting title in favor of the Kayes.
- Schwenn’s conveyance to the Kayes purported to grant the real property in fee simple.
- Under Civil Code § 1106, when Schwenn later reacquired the royalty interest, that subsequently acquired title passed automatically to the Kayes by operation of law.
- Schwenn’s subjective intent in requesting the reconveyance from her daughter and son-in-law did not prevent § 1106 from applying.
- Extrinsic evidence offered to show a different, unexpressed intent could not vary the legal effect of an unambiguous fee simple conveyance.

## Legal Principles

- Under California Civil Code § 1106, if a grantor purports by proper instrument to grant real property in fee simple and later acquires title or a claim of title to that property, the later-acquired interest passes by operation of law to the grantee (or successors).
- The doctrine applies to later-acquired interests connected to the conveyed real property, including oil and gas royalty interests.
- A grantor’s later motive or private intent in reacquiring an interest does not alter the statutory transfer that occurs once § 1106 is triggered.
- When a deed clearly purports to convey fee simple title, parol evidence cannot be used to contradict that conveyance to avoid the effect of § 1106.

## Conclusion

Because Schwenn sold the property to the Kayes by a deed purporting to convey fee simple title, her later reacquisition of the previously gifted royalty interest passed to the Kayes automatically under Civil Code § 1106, and neither her intent nor equitable arguments based on the family gift changed that result.


Schwenn v. Kaye, 155 Cal.App.3d 949 (1984)