In In re Tr. A & Tr. C, Established Under Bernard L. & Jeannette Fenenbock Living Tr. Agreement, Dated Mar. 12, 2008, a co-trustee of a family trust transferred stock from the trust to her personal trust and then sold the stock to her sons. 651 S.W.3d 588 (Tex. App.—El Paso 2022), pet. granted (Dec. 15, 2023). Following the sale, her co-executor sued her, seeking a declaration that he is a co-trustee and that the transfer was void because he had not consented to it. The probate court declared the stock transfer to be void, ordered that the stock be “restored” to the family trust, and ordered the defendant to undertake certain actions, including an accounting and deposit of substantial funds. The defendant appealed, and the court of appeals vacated and remanded, holding that the probate court lacked jurisdiction to declare the stock transfer void due to the omission of “jurisdictionally indispensable” parties, the defendant’s sons.
Both parties petitioned for review to the Texas Supreme Court. The plaintiff argued that the sons did not need to be joined, and the defendant argued that her sons did not need to have been joined for the probate court to have jurisdiction, but that the probate court’s adjudication of the stock’s ownership in her sons’ absence was in error. The Supreme Court granted the parties’ petitions for review, and its staff presents the issue as: “The central issue in this case is whether compulsory joinder extends to subsequent purchasers of stock when a lawsuit between other parties effectively adjudicates the stock’s ownership.”