Pillsbury, J.
Section 5220 of the National Bank Act provides that “Any association may go into liquidation and be closed by the vote of its shareholders owning two-thirds of its stock.” The sections following provide in detail for winding up the affairs of the bank when such vote has been taken.
It is clear that the stockholders had the right to put the First National Bank into voluntary liquidation rather than to permit its charter to expire by limitation, as it would have done on March 25, 1885. The appellee, as one of the shareholders, voted all his stock in favor of that course.
When the bank ceased doing business on February 25,1885, it became the duty of those placed in charge of its affairs for the purposes of winding up its business to use all reasonable effort to realize out of the assets as much as possible and distribute the proceeds among the shareholders. When this has been done it is clear that the value of the stock can only he measured by the value of the assets. It is not contended by appellee, neither could it well be, that the First National was not legally put into liquidation. The appellee states in his testimony taken on the trial that he voted for liquidation, and he knew this course had its inception in the desire to get rid of him as a stockholder by the organizing of another national bank. There can be no doubt of the right of the stockholders after such vote was taken, to organize a new bank and to dispose of the stock to whomsoever they saw proper, so long as they committed no fraudulent act to the injury of the appellee. The complainant, with full knowledge of what had been done in putting the one bank into liquidation and the organizing of a new one, and the disposition of the assets of the bank by its directory, for he was furnished with a detailed statement by Mr. Kohl, received a cash dividend of 8100 upon each share of his stock, and joined with the officers of the bank in dividing up many of the remaining bonds and securities, selecting those he desired to take and thereby received f>50 per share additional. Instead of objecting to the action of the directory and Mr. Kohl and refusing to take his share of the proceeds derived from the sale of the assets and demanding recognition as a stockholder, or demanding an equal amount of stock in the new organization and offering to pay for it, as others did, he voluntarily, with a full knowledge of the facts, receives his pro rata share of each and every dividend declared, and his explanation of this act is that he “ never knew of any one objecting to receiving money,” that he knew the new bank would be organized and he left, but he intended “ to hold his grip.” > .
> He further says that when Mr. Kohl presented him with the statement of the disposition of the assets he “had no doubt to base an objection upon,” although admitting, in fact, that he knew how the assets of the bank were disposed of. He has also received two additional dividends, amounting to 85.50 per share, and taken the money without objection, making in the aggregate 8155.50 upon each share of capital stock held by him of the par value of $100, and the remaining assets, amounting, as estimated, to 84536.39, consisting of notes and a farm which had not been converted into cash at time of trial. As to these remaining assets, we think the proof shows that when Mr. Kohl called appellee’s attention to them, at the time he paid the last dividend, he told appellee that if he wanted the matter closed up at once he, appellee, could buy them or they would buy them, and appellee then directed Mr. Kohl to keep on the way he had been doing.
Now, after receiving his share of the assets disposed of, belonging to the First National, under the circumstances stated, we are at a loss to comprehend how he can claim to be pecuniarily interested in the “Old National Bank,” or entitled to any of its earnings.
He is, of course, entitled to a fair administration of the assets of the defunct bank, the First National, but upon what basis he can claim that his interest in such funds is to be measured by the present value of the stock in the new National Bank we can not perceive.
And yet the court below in its decree found that his stock in the First National Bank was of the value of $190.50 per share, when the assets as disposed of would not, perhaps, exceed in value $160 upon the share.
The record is barren of any proof that the assets of the First National Bank,in which appellee was alargo stockholder, consisting of bonds and bills receivable, and furniture and fixtures, were not sold at the current rates in the stock market, except the fixtures and furniture, the value of which was fixed by the opinion of witnesses varying from $1,000 to $1,600. There is no evidence in the record that the United Btates bonds were sold to the Old National Bank at a less price than current quotations, nor that the bills receivable did not bring all they were worth, and, as to the $40,000 worth of local bonds and securities divided between the stockholders, the appellee can not complain, as he joined in the division and made his own selection for the stock, or surplus dividend of $30 per share. We have been unable to find any evidence in the record that justifies the action of the court below in finding that the stock of the appellee in the First National Bank was worth, when the vote for liquidation took effect, 8190.50 per share. As we have said, if the assets of that bank were properly administered, the value of the property of the bank would determine the value of the stock. and, if the assets were disposed of for their fair market value, the appellee has no reason to complain. We think he is estopped from insisting that the greater part of the assets were sold to this new organization, as he knew they were thus disposed of when he accepted his share of the proceeds; but if he can establish ■that, by an unlawful combination between the two banks, the assets were not sold for their fair market value, he can have an account taken of the value of his stock, based upon such fair value of the assets of the bank, and have a decree for such difference.
A mere honest difference of opinion between him and the other parties authorized to wind up the affairs of the bank, will not, however, render those officers, or the First National Bank, liable to account, but if it should appear, upon a re-trial of this case, that the First National Bank, through its custodian of the assets of the bank, had fraudulently disposed of the property of the bank for the purpose of aiding themselves at the expense of appellee, by selling them for less than their fair value, those taking part in such fraudulent practices must be held to respond to complainant below, and if it should appear that the Old National Bank was a party to such fraud, a decree might well go against it to account for the fair market value of all assets received by it for less than their fair value. We think the complainant is entitled to a fair and honest disposition of the property of the bank and is entitled to receive his just and fair proportion of the proceeds thereof, according to the amount of his stock in the bank compared with the entire capital. At the same time we hold that he can not claim to be a stockholder in the new bank, nor entitled to share in its earnings, nor object to the transfer of the assets of the bank in which he was a stockholder to the new organization, as, with a full knowledge of all the transactions, he took his money arising out of the payments made by the latter bank for such assets.
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Pillsbury, J.
Section 5220 of the National Bank Act provides that “Any association may go into liquidation and be closed by the vote of its shareholders owning two-thirds of its stock.” The sections following provide in detail for winding up the affairs of the bank when such vote has been taken.
It is clear that the stockholders had the right to put the First National Bank into voluntary liquidation rather than to permit its charter to expire by limitation, as it would have done on March 25, 1885. The appellee, as one of the shareholders, voted all his stock in favor of that course.
When the bank ceased doing business on February 25,1885, it became the duty of those placed in charge of its affairs for the purposes of winding up its business to use all reasonable effort to realize out of the assets as much as possible and distribute the proceeds among the shareholders. When this has been done it is clear that the value of the stock can only he measured by the value of the assets. It is not contended by appellee, neither could it well be, that the First National was not legally put into liquidation. The appellee states in his testimony taken on the trial that he voted for liquidation, and he knew this course had its inception in the desire to get rid of him as a stockholder by the organizing of another national bank. There can be no doubt of the right of the stockholders after such vote was taken, to organize a new bank and to dispose of the stock to whomsoever they saw proper, so long as they committed no fraudulent act to the injury of the appellee. The complainant, with full knowledge of what had been done in putting the one bank into liquidation and the organizing of a new one, and the disposition of the assets of the bank by its directory, for he was furnished with a detailed statement by Mr. Kohl, received a cash dividend of 8100 upon each share of his stock, and joined with the officers of the bank in dividing up many of the remaining bonds and securities, selecting those he desired to take and thereby received f>50 per share additional. Instead of objecting to the action of the directory and Mr. Kohl and refusing to take his share of the proceeds derived from the sale of the assets and demanding recognition as a stockholder, or demanding an equal amount of stock in the new organization and offering to pay for it, as others did, he voluntarily, with a full knowledge of the facts, receives his pro rata share of each and every dividend declared, and his explanation of this act is that he “ never knew of any one objecting to receiving money,” that he knew the new bank would be organized and he left, but he intended “ to hold his grip.” > .
> He further says that when Mr. Kohl presented him with the statement of the disposition of the assets he “had no doubt to base an objection upon,” although admitting, in fact, that he knew how the assets of the bank were disposed of. He has also received two additional dividends, amounting to 85.50 per share, and taken the money without objection, making in the aggregate 8155.50 upon each share of capital stock held by him of the par value of $100, and the remaining assets, amounting, as estimated, to 84536.39, consisting of notes and a farm which had not been converted into cash at time of trial. As to these remaining assets, we think the proof shows that when Mr. Kohl called appellee’s attention to them, at the time he paid the last dividend, he told appellee that if he wanted the matter closed up at once he, appellee, could buy them or they would buy them, and appellee then directed Mr. Kohl to keep on the way he had been doing.
Now, after receiving his share of the assets disposed of, belonging to the First National, under the circumstances stated, we are at a loss to comprehend how he can claim to be pecuniarily interested in the “Old National Bank,” or entitled to any of its earnings.
He is, of course, entitled to a fair administration of the assets of the defunct bank, the First National, but upon what basis he can claim that his interest in such funds is to be measured by the present value of the stock in the new National Bank we can not perceive.
And yet the court below in its decree found that his stock in the First National Bank was of the value of $190.50 per share, when the assets as disposed of would not, perhaps, exceed in value $160 upon the share.
The record is barren of any proof that the assets of the First National Bank,in which appellee was alargo stockholder, consisting of bonds and bills receivable, and furniture and fixtures, were not sold at the current rates in the stock market, except the fixtures and furniture, the value of which was fixed by the opinion of witnesses varying from $1,000 to $1,600. There is no evidence in the record that the United Btates bonds were sold to the Old National Bank at a less price than current quotations, nor that the bills receivable did not bring all they were worth, and, as to the $40,000 worth of local bonds and securities divided between the stockholders, the appellee can not complain, as he joined in the division and made his own selection for the stock, or surplus dividend of $30 per share. We have been unable to find any evidence in the record that justifies the action of the court below in finding that the stock of the appellee in the First National Bank was worth, when the vote for liquidation took effect, 8190.50 per share. As we have said, if the assets of that bank were properly administered, the value of the property of the bank would determine the value of the stock. and, if the assets were disposed of for their fair market value, the appellee has no reason to complain. We think he is estopped from insisting that the greater part of the assets were sold to this new organization, as he knew they were thus disposed of when he accepted his share of the proceeds; but if he can establish ■that, by an unlawful combination between the two banks, the assets were not sold for their fair market value, he can have an account taken of the value of his stock, based upon such fair value of the assets of the bank, and have a decree for such difference.
A mere honest difference of opinion between him and the other parties authorized to wind up the affairs of the bank, will not, however, render those officers, or the First National Bank, liable to account, but if it should appear, upon a re-trial of this case, that the First National Bank, through its custodian of the assets of the bank, had fraudulently disposed of the property of the bank for the purpose of aiding themselves at the expense of appellee, by selling them for less than their fair value, those taking part in such fraudulent practices must be held to respond to complainant below, and if it should appear that the Old National Bank was a party to such fraud, a decree might well go against it to account for the fair market value of all assets received by it for less than their fair value. We think the complainant is entitled to a fair and honest disposition of the property of the bank and is entitled to receive his just and fair proportion of the proceeds thereof, according to the amount of his stock in the bank compared with the entire capital. At the same time we hold that he can not claim to be a stockholder in the new bank, nor entitled to share in its earnings, nor object to the transfer of the assets of the bank in which he was a stockholder to the new organization, as, with a full knowledge of all the transactions, he took his money arising out of the payments made by the latter bank for such assets. The evidence is very conflicting as to the value of the fixtures, safe, books and blanks of the First National, sold "to the Old National Bank. They were carried on the boohs of the former bank at the value of $1,600 and were sold to the new bank for §1,000, and, if the correctness of the decree depended upon this item alone, we should not be disposed to interfere with it, but we are of the opinion that the court erred in finding from the evidence in this record that appellee’s.stock was of the value of §190.50 per share, upon the ground that he was equitably entitled in some way, to a share in the profits of the Old National Bank, and without determining whether the assets of the First National Bank had been fraudulently disposed of for less than their value to the injury of the appellee. What we have said disposes also of the question of the “good will” of the First National Bank which it is claimed was obtained by the Old National Bank, as the lease of the building was assigned to it and the business 'carried on in the same place.
The First National voluntarily closed its doors as a banking institution on the 25th day of February, 1885, and then ceased to exist as a banking institution. It did not, neither could it, thereafter dispose of its franchise held by it under the law. It had no “good will” to dispose of independent of the value of the unexpired lease for the bank building, This lease was made by appellee to the First National Bank, or its successor, in September, 1833, for five years, and the unexpired term was clearly an asset of the bank which should have been disposed of to the best advantage.
Upon a sale of it, the “good will” would necessarily enter into consideration in determining its value. Dougherty v. Van Nostrand, 1 Hoff. Ch. 68; Austin v. Bays, 24 Beav. 598.
If the parties appointed to wind up the business of the First National Bank have acted in good faith, and with reasonable diligence, they should be allowed a fair compensation for their serv. ices before final distribution is made of the remaining assets.
For the reasons stated the decree will be reversed and the cause remanded for further proceedings.
Reversed and remanded.