fluid overflow?

when my buddy's truck warms up tranny fluid starts comming out of the dipstick tube. its a th350. can anyone tell me what causes this

Your trans. is too full and/or too hot. Is the fluid foamy? Overfilling a transmission can raise the fluid level to the point where the internal moving components i.e planetary gear sets, imput and output shafts, etc. are physically immersed in the oil, which "churns" up the oil causing it to foam, and be pushed out of the case vent, filler tube, etc. The foamy fluid won't dissapate heat as well.

Make sure when the trans is checked, you read the dipstick to see where it needs to be read from to get a correct reading. Some you check with the trans in neutral and motor running when it reaches operating temps, some you check in park, but in all cases the trans should be at operating temp, never check it cold.

I had the opposite problem with one of my cars. When I checked it, the stick wasn't anchored in the cap so it went in too deep and I was actually low on oil even though the stick looked full.

Is there any chance that your dipstick is too short for your tranny?