Land v. Marshall

During the marriage of W.E. Marshall and Viola Marshall (plaintiff), the Marshalls acquired hundreds of shares of stock in a life-insurance company. The stock was the most valuable asset of the Marshalls’ community property. In 1960, without Viola’s knowledge or consent, W.E. created a trust and transferred the stock into the trust as the corpus. Title to the stock was then held by Erie Land (defendant), the Marshalls’ daughter, as trustee. Per the trust instrument, the stock was to be owned and held by the trustee for the benefit of W.E. and Viola during their lives; the trustee was required to follow W.E.’s instructions with respect to stock transactions; W.E. reserved the power to completely sell the stock even if it extinguished the trust; the trust corpus could be used in its entirety to provide for W.E. and Viola; and upon the death of both W.E. and Viola, the trust corpus would go to the trustee or, if the trustee was not then living, the trustee’s daughter. In 1965, W.E. died. Viola learned that the shares of stock had more than tripled in number. Viola sued Land to set aside W.E.’s trust. During the trial proceedings, Viola’s case proceeded on the theory that W.E.’s trust was invalid as far as her interest in community property. The trial court ruled against Viola, and the court of appeals reversed. The Texas Supreme Court granted review.