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Marshall v. Marshall
Texas Court of Appeals
735 S.W.2d 587 (1987)
Arlene Marshall (plaintiff) and J. W. Marshall (Woody) (defendant) were married. Before the marriage, Woody became a partner in a partnership. The partnership agreement provided that Woody would be paid $700 per month in salary and that all other partnership distributions would constitute a partner’s share of the business’s profits. Of $542,315.72 distributed to Woody from the partnership during his marriage to Arlene, $22,400 constituted salary payments. Upon Arlene and Woody’s divorce, the trial court held that all the partnership’s disbursements to Woody were Woody’s separate property. Arlene appealed, arguing that salary and profits distributed from a partnership during marriage are community property. Woody conceded that the salary he received was community property, but Woody argued that the remaining distributions were a return of capital to him and therefore were his separate property.
Rule of Law
Holding and Reasoning (Stewart, J.)
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