C. Allen, J.
This case is certainly quite remarkable in its facts. More than fifty years ago the defendant savings bank closed upon the books the account of a female depositor, by paying to her attorney the balance found to be due after making a deduction of five per cent for losses sustained on its investments ; and the present action is brought by the administrator of her estate to recover the amount so deducted, with interest. The case calls upon us to look into the nature of the contract made by the savings bank with the depositors, under the system which then existed, and which has always prevailed in Massachusetts since savings banks began. And in determining what the contract was, regard must be paid not merely to the language used by the defendant in the books which it issued to its depositors, but to the circumstances under which the deposit was received, and the chartered powers and purposes of the institution itself.
[242]*242The Lynn Institution for Savings was incorporated by the St. of 1826, c. 20. Twenty-eight persons were named in the act, who, with such others as might be duly elected members, were made a corporation, with power to receive deposits, to be used and improved to the best advantage, and the income or profit thereof to be applied and divided among those making the deposits, and their executors, administrators, or assigns, in just proportion; the principal to be withdrawn at such times and in such.manner as the corporation should direct and appoint ; other persons might be elected members; a president and other necessary officers might be chosen; and by-laws might be made. It was also provided that the officers should lay a statement of its affairs before any persons appointed by the Legislature to examine the same, whenever required to do so, and that the Legislature might at any time make further regulations for the government of the institution, and alter, amend, or repeal the act of incorporation at pleasure.
At the time of granting this charter there were no general laws in Massachusetts respecting savings banks, and but five earlier charters had been granted, viz.: by the St. of 1816, c. 92, to the Provident Institution for Savings in Boston ; by the St. of 1818, c. 64, to the Institution for Savings in Salem; by the St. of 1819, c. 85, to the Institution for Savings in Newburyport; by the St. of 1824, c. 95, to the Institution for Savings in Roxbury; and by the St. of 1825, c. 4, to the New Bedford Institution for Savings. The last one alone of the earlier charters contained similar provisions to that of the defendant, reserving the right of alteration, amendment, or repeal.
The first general legislation concerning savings banks was the St. of 1834, c. 190, which was incorporated, with some additions, into the Rev. Sts. c. 36, §§ 71-84. This legislation provided that every such corporation might receive on deposit, for the use and benefit of the depositors, all sums of money offered for that purpose, to a limited amount; prescribed the manner of investing the deposits; required that the income or profits of all deposits should be divided among the depositors, or their legal representatives, in just proportions, with a deduction of all reasonable expenses incurred in the management thereof; and provided that the principal deposits might be withdrawn [243]*243at such time or in such manner as the corporation should in its by-laws direct. In the Revised Statutes provision was also made for an annual return to the Secretary' of the Commonwealth, by each institution, showing its condition. By the St. of 1851, c. 127, a board of bank commissioners was established, with power, amongst other things, to visit and examine savings banks, and in case of need to apply to this court for an injunction, and for receivers, temporary or permanent.
It thus appears that a savings bank is an incorporated agency for receiving the moneys of depositors in small or moderate amounts, and investing them merely for the use and benefit of the depositors, who are to receive the advantage thereof in just proportion. At the outset, the chief purpose was to encourage frugality by affording to persons of small means an opportunity to have their savings cared for by persons of experience, who, by combining the deposits, could make advantageous investments not available for small investors. And this purpose still exists. The corporation had no capital stock, properly so called. There was no relation of privity between successive depositors, as there is between successive stockholders in an ordinary corporation. No profit or benefit accrued to the managers. It is a matter of familiar knowledge, that in the earlier times the officers of savings banks, with the exception of the treasurer, usually received no pay for their services. It was so with the defendant. The savings-bank book, upon which the deposit now sought to be recovered is shown, states that the savings bank would be open every Wednesday from two to three o’clock P. M., and that the trustees and other officers would superintend the business without the smallest benefit to themselves ; and one of the by-laws provides that the trustees shall never receive any emolument, but may allow a reasonable compensation to a treasurer, or such other officers as may be found' necessary.
Gradually, with the progress of time, a practice grew up among savings banks, which is now made compulsory by the Pub. Sts. c. 116, § 24, of reserving a guaranty fund to meet possible losses; but the fundamental idea has never been departed from, that all the funds and investments of a savings bank are held exclusively for the benefit and security of the depositors. This idea was, and still is, the corner stone of the [244]*244whole system. There is no corporation, with any purpose or possibility of profit to itself, independently of the depositors ; but the latter are to share whatever profit may be made in just proportion among themselves. The corporation is a mere agency for managing the moneys of the depositors.
To others, to third persons, the corporation can incur liabilities, in contract or in tort, for which the funds in its hands will be responsible. But to the depositors themselves, the undertaking of the corporation is that it will" receive and combine the deposits, and manage and use them to the best practicable advantage, according to the judgment of the trustees, and give to the depositors in just proportion among themselves the benefit of the result of such management. There is no absolute promise to repay to any depositor the full amount of his deposit, at all events. Such a promise to one depositor would imply that in case of loss he should be repaid out of the deposits of others. But the promise or undertaking of the corporation is the same to all. There is no promise to pay one at the expense of others. The promise is, in effect, to pay each depositor in full, with his dividends, provided the assets are sufficient; and if they are not sufficient, then to pay to each one his proportionate share.
There is no legal difficulty ordinarily in maintaining an action against a savings bank to recover a deposit, because ordinarily the assets are sufficient, and the savings bank when sued has no occasion to insist on’ the condition. It admits that its funds are sufficient, and the plaintiff’s right in other respects is all that has to be considered. But suppose a great loss has occurred, by fire, theft, defalcation, or otherwise, and the assets are reduced so that the savings bank can only pay fifty or seventy-five per cent, and the case becomes different.
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C. Allen, J.
This case is certainly quite remarkable in its facts. More than fifty years ago the defendant savings bank closed upon the books the account of a female depositor, by paying to her attorney the balance found to be due after making a deduction of five per cent for losses sustained on its investments ; and the present action is brought by the administrator of her estate to recover the amount so deducted, with interest. The case calls upon us to look into the nature of the contract made by the savings bank with the depositors, under the system which then existed, and which has always prevailed in Massachusetts since savings banks began. And in determining what the contract was, regard must be paid not merely to the language used by the defendant in the books which it issued to its depositors, but to the circumstances under which the deposit was received, and the chartered powers and purposes of the institution itself.
[242]*242The Lynn Institution for Savings was incorporated by the St. of 1826, c. 20. Twenty-eight persons were named in the act, who, with such others as might be duly elected members, were made a corporation, with power to receive deposits, to be used and improved to the best advantage, and the income or profit thereof to be applied and divided among those making the deposits, and their executors, administrators, or assigns, in just proportion; the principal to be withdrawn at such times and in such.manner as the corporation should direct and appoint ; other persons might be elected members; a president and other necessary officers might be chosen; and by-laws might be made. It was also provided that the officers should lay a statement of its affairs before any persons appointed by the Legislature to examine the same, whenever required to do so, and that the Legislature might at any time make further regulations for the government of the institution, and alter, amend, or repeal the act of incorporation at pleasure.
At the time of granting this charter there were no general laws in Massachusetts respecting savings banks, and but five earlier charters had been granted, viz.: by the St. of 1816, c. 92, to the Provident Institution for Savings in Boston ; by the St. of 1818, c. 64, to the Institution for Savings in Salem; by the St. of 1819, c. 85, to the Institution for Savings in Newburyport; by the St. of 1824, c. 95, to the Institution for Savings in Roxbury; and by the St. of 1825, c. 4, to the New Bedford Institution for Savings. The last one alone of the earlier charters contained similar provisions to that of the defendant, reserving the right of alteration, amendment, or repeal.
The first general legislation concerning savings banks was the St. of 1834, c. 190, which was incorporated, with some additions, into the Rev. Sts. c. 36, §§ 71-84. This legislation provided that every such corporation might receive on deposit, for the use and benefit of the depositors, all sums of money offered for that purpose, to a limited amount; prescribed the manner of investing the deposits; required that the income or profits of all deposits should be divided among the depositors, or their legal representatives, in just proportions, with a deduction of all reasonable expenses incurred in the management thereof; and provided that the principal deposits might be withdrawn [243]*243at such time or in such manner as the corporation should in its by-laws direct. In the Revised Statutes provision was also made for an annual return to the Secretary' of the Commonwealth, by each institution, showing its condition. By the St. of 1851, c. 127, a board of bank commissioners was established, with power, amongst other things, to visit and examine savings banks, and in case of need to apply to this court for an injunction, and for receivers, temporary or permanent.
It thus appears that a savings bank is an incorporated agency for receiving the moneys of depositors in small or moderate amounts, and investing them merely for the use and benefit of the depositors, who are to receive the advantage thereof in just proportion. At the outset, the chief purpose was to encourage frugality by affording to persons of small means an opportunity to have their savings cared for by persons of experience, who, by combining the deposits, could make advantageous investments not available for small investors. And this purpose still exists. The corporation had no capital stock, properly so called. There was no relation of privity between successive depositors, as there is between successive stockholders in an ordinary corporation. No profit or benefit accrued to the managers. It is a matter of familiar knowledge, that in the earlier times the officers of savings banks, with the exception of the treasurer, usually received no pay for their services. It was so with the defendant. The savings-bank book, upon which the deposit now sought to be recovered is shown, states that the savings bank would be open every Wednesday from two to three o’clock P. M., and that the trustees and other officers would superintend the business without the smallest benefit to themselves ; and one of the by-laws provides that the trustees shall never receive any emolument, but may allow a reasonable compensation to a treasurer, or such other officers as may be found' necessary.
Gradually, with the progress of time, a practice grew up among savings banks, which is now made compulsory by the Pub. Sts. c. 116, § 24, of reserving a guaranty fund to meet possible losses; but the fundamental idea has never been departed from, that all the funds and investments of a savings bank are held exclusively for the benefit and security of the depositors. This idea was, and still is, the corner stone of the [244]*244whole system. There is no corporation, with any purpose or possibility of profit to itself, independently of the depositors ; but the latter are to share whatever profit may be made in just proportion among themselves. The corporation is a mere agency for managing the moneys of the depositors.
To others, to third persons, the corporation can incur liabilities, in contract or in tort, for which the funds in its hands will be responsible. But to the depositors themselves, the undertaking of the corporation is that it will" receive and combine the deposits, and manage and use them to the best practicable advantage, according to the judgment of the trustees, and give to the depositors in just proportion among themselves the benefit of the result of such management. There is no absolute promise to repay to any depositor the full amount of his deposit, at all events. Such a promise to one depositor would imply that in case of loss he should be repaid out of the deposits of others. But the promise or undertaking of the corporation is the same to all. There is no promise to pay one at the expense of others. The promise is, in effect, to pay each depositor in full, with his dividends, provided the assets are sufficient; and if they are not sufficient, then to pay to each one his proportionate share.
There is no legal difficulty ordinarily in maintaining an action against a savings bank to recover a deposit, because ordinarily the assets are sufficient, and the savings bank when sued has no occasion to insist on’ the condition. It admits that its funds are sufficient, and the plaintiff’s right in other respects is all that has to be considered. But suppose a great loss has occurred, by fire, theft, defalcation, or otherwise, and the assets are reduced so that the savings bank can only pay fifty or seventy-five per cent, and the case becomes different. At present, the most convenient method under such a disaster is to seek the appointment of a receiver. But it is not conceived that this is a necessary mode of procedure, provided the officers and the depositors can agree upon a settlement between themselves.
In the present case, there was a loss, from investments lawfully and properly made in the shares of two banks; and the officers of the defendant estimated the loss at five per cent, and passed votes that the depositors would have to submit to a deduction of that percentage upon their deposits. If the depositors [245]*245were dissatisfied, it was open to them to make objection in some legal form. But they did not do so. They appear to have been satisfied with, or at least to have submitted to, the course of the trustees. And if the plaintiff’s intestate, or her duly authorized attorney, accepted the balance found due, after making the deduction, as and for a settlement and payment of what she was entitled to receive upon her deposit, such acceptance, in the absence of fraud, would bind her. It would be like any settlement between principal and agent, where the agent accounts for and delivers up all the property of the principal which he has, and the principal receives it. In the present case it has been argued that a broader contract is to be found in the statements of the savings bank, contained in its book issued to the plaintiff’s intestate, of what it will pay, and also in its by-laws. But these statements, when looked at in view of the nature and character of the institution, are not to be taken as promises, but rather as statements of the expectation of the managers in respect to the success of their management. These statements in the book before us are pretty broad, to be sure; but after all, taking the whole of the by-laws together, it sufficiently appears that the depositors were to stand on a basis of equality; and though profits are all that are spoken of in terms, by intendment of law losses must be shared in like proportion.
The views above expressed are supported to a greater or less extent by the decisions in the following cases. Cogswell v. Rockingham Ten Cents Savings Bank, 59 N. H. 43. Hall v. Paris, 59 N. H. 71. Simpson v. City Savings Bank, 56 N. H. 466. Bunnell v. Collinsville Savings Society, 38 Conn. 203. Osborn v. Byrne, 43 Conn. 155. In re Newark Savings Institution, 1 Stew. (N. J.) 552. See also Huntington v. Savings Bank, 96 U. S. 388. They are opposed to the decision in Makin v. Savings Institution, 23 Maine, 350, with which we are unable to agree. The remark in Reed v. Home Savings Bank, 130 Mass. 443, 446, that a depositor in a savings bank becomes a creditor of that bank, is correct; but there was then no occasion to consider what is now determined, namely, that the promise of the savings bank is not an absolute promise to pay in full at all events.
It is further contended by the plaintiff, that it does not appear that the plaintiff’s intestate or her attorney accepted the sum [246]*246paid by the defendant in 1838 as a full settlement of what she was entitled to receive. But after this lapse of time some things are to be taken for granted. On May 18, 1838, the trustees passed the votes directing the treasurer to charge off three per cent to cover the loss sustained by the failure of the Nahant Bank, and two per cent to cover the loss sustained by the depreciation of the Oriental Bank, and these sums were immediately charged against every depositor. The sum by which the deposit of the plaintiff’s intestate would be reduced by these two votes was $15.25. That sum was charged against her on the defendant’s ledger, “for loss deducted,” leaving a balance due to her of $306.25, which was marked as paid on May 21, and two red lines were drawn' underneath the figures, indicating that the account was closed. The payment of that sum was made on May 21,1838, three days after the votes above mentioned, to an attorney at law, who acted for her and others, and who signed a receipt for the money on the books of the bank, and on the same day also signed similar receipts for two other persons. The plaintiff’s intestate died in 1855. The savings-bank book was retained by her, with the payment of $306.25 indorsed thereon, showing a balance of $15.25 unexplained on the book.
The plaintiff made no explicit request to have the question submitted to the jury, whether Mrs. Lewis or-her attorney received the payment on May 21,1838, knowing that the trustees had voted to make the deduction from the deposits; and the ruling of the court was upon the ground that the' trustees had the right thus to apportion the losses. It is now to be assumed that the apportionment was a just one, that notice thereof was given to the depositors, and that it was known to the plaintiff’s intestate or her attorney when the money was paid. The court will not readily infer or assume the existence of a wrong which has not been discovered or complained of for fifty years. This being so, the payment was a settlement, and the plaintiff’s intestate received all that she was in law entitled to receive.
Judgment for the defendant.