When citing a source you have not read yourself, but which is referred to in a source you have read.
In-text reference
Lilly (as cited in Maxwell, 1999, p. 25) stated that "..."
"..." (Schwartz as cited in Burton, Westen, & Kowalski, 2009, p. 63)
Reference list
Maxwell, F. (1999). Phonology. San Francisco, CA: Brooks Cole.
Burton, L., Westen, D., & Kowalski, R. (2009). Psychology. Milton, Australia: Wiley.