Humane Society of Austin and Travis County v. Austin National Bank

The National Bank Act expressly authorized the United States Comptroller of the Currency (the comptroller) to grant national banks the power to serve as executor of estates. Mary Gutsch died in October 1971 in Texas, leaving behind a holographic will. The will named Austin National Bank (Austin) (defendant) as the executor. The will was probated on November 1, 1971. Subsequently, Austin brought a suit (the will-construction suit), seeking a declaratory judgment that would determine the rights of the will’s named beneficiaries. On September 11, 1972, Austin applied to the probate court for permission to rebalance, or reallocate, the estate’s assets into other securities pending the outcome of the will-construction suit. The Humane Society of Austin and Travis County (the Humane Society) (plaintiff), which had been named as a beneficiary in the will, joined in the application to the probate court. Four days later, the probate court entered an order authorizing Austin to sell some of the estate’s assets to reinvest the proceeds in certain securities, including the certificates of deposit of savings-and-loan institutions. In turn, Austin sold the estate’s stock and purchased certificates of deposit from itself. The will-construction suit resolved 16 months later, in December 1973. Austin submitted claims for commissions and attorney’s fees to the probate court, which allowed the claims of Austin while disallowing any offsets claimed by the Humane Society. The Humane Society sued Austin, arguing that Austin impermissibly engaged in self-dealing by investing the estate’s funds in its own certificates of deposit. The court of civil appeals affirmed the judgment of the probate court. The Humane Society appealed.