MR. JUSTICE GALEN
delivered the opinion of the court.
In this action the plaintiff seeks to recover from the defendant the sum of $1,191.72, together with interest from July 9, 1923, and costs of suit. In his complaint it is alleged: “That at all of the times hereinafter mentioned the defendant was, and still is, a corporation, duly created, organized, and existing under and by virtue of the laws of the state of Montana, and that during the year of 1923, up to on or about the 9th day of July, 1923, the defendant was engaged in a general deposit
and banking business, with its principal place of business at Great Falls, Montana, and that on or about the 9th day of 'July, 1923, the said defendant closed its doors to business, and has not since engaged in the said business of banking.”
It is then averred that on or about the seventh day of November, 1924, as evidence of the right and claim of the plaintiff to the payment of the amount due him, the bank made, executed, and delivered to him a certificate in writing, which is made a part of the complaint and it is upon such certificate the plaintiff predicates his right to have judgment. The salient features of the certificate are as follows:
“(This certificate must be presented when each dividend is paid.) Certificate of proof of claim issued by Stanton Trust & Savings Bank (in liquidation) of Great Falls, Montana.
“No. 668. Great Falls, Montana,
“November 7, 1924.
“This is to certify that William Rohr, assignee of J. N. Thelcn, executor of the estate of Henry Burmeister, deceased, has this day made legal and satisfactory proof of his claim as a creditor of the Stanton Trust & Savings Bank (in liquidation) of Great Falls, Montana, in the amount of eleven hundred ninety-one dollars and 72 cents, upon the following claim, to wit: Balance due on open account subject to cheek $1,191.72. And said creditor or the lawful assignee of this claim will be entitled to the dividends thereon. No assignment of this claim nor any portion thereof will be recognized in the payment of dividends unless notice of such assignment, evidenced by said creditor’s endorsement hereon, is given to said bank before such dividends are declared. This certificate is to be surrendered to said bank upon payment of the final dividends.
“Stanton Teust & Savings Bane (in liquidation),
“By S. J. Doyle, Cashier.
“[Corporate Seal.]”
A general demurrer to the complaint was sustained without leave “to plead anew or amend.” Judgment was accordingly entered in favor of the defendant awarding to it its costs. The appeal is from the judgment.
In disposition of tbe appeal bnt one question is presented for our determination,
viz.:
Does tbe complaint state a cause of action? On its face, it is apparent from its allegations tbat tbe defendant bank is in process of liquidation. This being true, may tbe plaintiff maintain an action as a creditor upon an undisputed claim?
Judicial notice is taken of tbe true signification of all English words and phrases, and of all legal expressions. (See. 10532, Rev. Codes 1921.) And from tbe affirmative allegations of tbe complaint, it appeal’s tbat tbe defendant bank is “ in liquidation.
’ ’
Tbe word “liquidation” is defined as: “Tbe act or operation of winding up tbe affairs of a firm or company by getting in tbe assets, settling with its debtors and creditors, and appropriating tbe amount of profit or loss.” (3 Cent. Dict. 3474;
Garrett Co.
v.
Morton,
71 N. Y. Supp. 17, 35 Misc. Rep. 10.) Webster says tbat, as pertaining to law, liquidate means “to determine by agreement or by litigation tbe precise amount of (indebtedness or damages), or, where there is an indebtedness to more than one person, to determine tbe precise amount of (each indebtedness) ; to make tbe amount of (an indebtedness or damages) clear and certain, or to settle tbe
data
from which it may be calculated.” (New International Diet.) And such meaning of tbe word liquidation is generally recognized by tbe courts. (25 Cyc. 1445.)
Section 6079 of tbe Revised Codes of 1921 provides for tbe appointment of receivers of insolvent banks, and section 6109e, Chapter 90, Laws of 1923, p. 244, authorizes liquidation thereof by tbe stockholders. Thése are tbe only methods prescribed by tbe statute for tbe liquidation of banks. One method is involuntary, and tbe other voluntary. For our purposes here, whether tbe liquidation has been voluntary or involuntary, tbe presumption is indulged tbat tbe law has been complied with. (Section 10606, subd. 33, Rev. Codes 1921.)
Tbe general principle of equity that tbe assets of an insolvent are to be distributed ratably among general creditors applies with full force to the distribution of tbe assets of a bank. A general depositor of a bank is merely a general credi
tor, and, as such, is not entitled to any preference or priority over other general creditors. (3 R. C. L., p. 642.) The assets of a bank in process of liquidation are held in trust for the equal benefit of all creditors, and one cannot be permitted to obtain an advantage or preference over another by an attachment, execution, or otherwise. A disputed claim of a creditor may be adjudicated, but those whose claims are recognized and admitted may not successfully maintain actions thereon. So to permit would defeat the very purpose of the liquidation of a bank whether being voluntarily accomplished or through the intervention of a receiver.
Were the bank in involuntary liquidation under a receiver, it would be
in custodia legis,
and an action could not be maintained against either the bank or its receiver upon an admitted claim. Judgments at law and consequent preferences to creditors of an insolvent bank in charge of a receiver, if permitted, would entirely defeat the very purpose of the interposition of equitable jurisdiction. Courts of equity jealously guard all property in the possession of receivers from interference and waste, in order that the greatest benefit may accrue to those justly entitled to the property as a result of the liquidation undertaken by the appointment of a receiver. The appointment of a receiver carries with it the right to the possession of the insolvent’s property, and also may not be interfered with so long as such appointment is in force. His duty is to protect and preserve the assets for equitable distribution to those justly entitled thereto.
(Stebbins
v.
Savage,
5 Mont. 253, 5 Pac. 278;
Gardner
v.
Caldwell,
16 Mont. 221, 40 Pac. 590.)
So, too, voluntary liquidation of a bank is authorized by our statute. In such cases, insolvency is not a prerequisite. Nevertheless its assets are to be carefully collected and held in trust for the benefit of depositors.
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MR. JUSTICE GALEN
delivered the opinion of the court.
In this action the plaintiff seeks to recover from the defendant the sum of $1,191.72, together with interest from July 9, 1923, and costs of suit. In his complaint it is alleged: “That at all of the times hereinafter mentioned the defendant was, and still is, a corporation, duly created, organized, and existing under and by virtue of the laws of the state of Montana, and that during the year of 1923, up to on or about the 9th day of July, 1923, the defendant was engaged in a general deposit
and banking business, with its principal place of business at Great Falls, Montana, and that on or about the 9th day of 'July, 1923, the said defendant closed its doors to business, and has not since engaged in the said business of banking.”
It is then averred that on or about the seventh day of November, 1924, as evidence of the right and claim of the plaintiff to the payment of the amount due him, the bank made, executed, and delivered to him a certificate in writing, which is made a part of the complaint and it is upon such certificate the plaintiff predicates his right to have judgment. The salient features of the certificate are as follows:
“(This certificate must be presented when each dividend is paid.) Certificate of proof of claim issued by Stanton Trust & Savings Bank (in liquidation) of Great Falls, Montana.
“No. 668. Great Falls, Montana,
“November 7, 1924.
“This is to certify that William Rohr, assignee of J. N. Thelcn, executor of the estate of Henry Burmeister, deceased, has this day made legal and satisfactory proof of his claim as a creditor of the Stanton Trust & Savings Bank (in liquidation) of Great Falls, Montana, in the amount of eleven hundred ninety-one dollars and 72 cents, upon the following claim, to wit: Balance due on open account subject to cheek $1,191.72. And said creditor or the lawful assignee of this claim will be entitled to the dividends thereon. No assignment of this claim nor any portion thereof will be recognized in the payment of dividends unless notice of such assignment, evidenced by said creditor’s endorsement hereon, is given to said bank before such dividends are declared. This certificate is to be surrendered to said bank upon payment of the final dividends.
“Stanton Teust & Savings Bane (in liquidation),
“By S. J. Doyle, Cashier.
“[Corporate Seal.]”
A general demurrer to the complaint was sustained without leave “to plead anew or amend.” Judgment was accordingly entered in favor of the defendant awarding to it its costs. The appeal is from the judgment.
In disposition of tbe appeal bnt one question is presented for our determination,
viz.:
Does tbe complaint state a cause of action? On its face, it is apparent from its allegations tbat tbe defendant bank is in process of liquidation. This being true, may tbe plaintiff maintain an action as a creditor upon an undisputed claim?
Judicial notice is taken of tbe true signification of all English words and phrases, and of all legal expressions. (See. 10532, Rev. Codes 1921.) And from tbe affirmative allegations of tbe complaint, it appeal’s tbat tbe defendant bank is “ in liquidation.
’ ’
Tbe word “liquidation” is defined as: “Tbe act or operation of winding up tbe affairs of a firm or company by getting in tbe assets, settling with its debtors and creditors, and appropriating tbe amount of profit or loss.” (3 Cent. Dict. 3474;
Garrett Co.
v.
Morton,
71 N. Y. Supp. 17, 35 Misc. Rep. 10.) Webster says tbat, as pertaining to law, liquidate means “to determine by agreement or by litigation tbe precise amount of (indebtedness or damages), or, where there is an indebtedness to more than one person, to determine tbe precise amount of (each indebtedness) ; to make tbe amount of (an indebtedness or damages) clear and certain, or to settle tbe
data
from which it may be calculated.” (New International Diet.) And such meaning of tbe word liquidation is generally recognized by tbe courts. (25 Cyc. 1445.)
Section 6079 of tbe Revised Codes of 1921 provides for tbe appointment of receivers of insolvent banks, and section 6109e, Chapter 90, Laws of 1923, p. 244, authorizes liquidation thereof by tbe stockholders. Thése are tbe only methods prescribed by tbe statute for tbe liquidation of banks. One method is involuntary, and tbe other voluntary. For our purposes here, whether tbe liquidation has been voluntary or involuntary, tbe presumption is indulged tbat tbe law has been complied with. (Section 10606, subd. 33, Rev. Codes 1921.)
Tbe general principle of equity that tbe assets of an insolvent are to be distributed ratably among general creditors applies with full force to the distribution of tbe assets of a bank. A general depositor of a bank is merely a general credi
tor, and, as such, is not entitled to any preference or priority over other general creditors. (3 R. C. L., p. 642.) The assets of a bank in process of liquidation are held in trust for the equal benefit of all creditors, and one cannot be permitted to obtain an advantage or preference over another by an attachment, execution, or otherwise. A disputed claim of a creditor may be adjudicated, but those whose claims are recognized and admitted may not successfully maintain actions thereon. So to permit would defeat the very purpose of the liquidation of a bank whether being voluntarily accomplished or through the intervention of a receiver.
Were the bank in involuntary liquidation under a receiver, it would be
in custodia legis,
and an action could not be maintained against either the bank or its receiver upon an admitted claim. Judgments at law and consequent preferences to creditors of an insolvent bank in charge of a receiver, if permitted, would entirely defeat the very purpose of the interposition of equitable jurisdiction. Courts of equity jealously guard all property in the possession of receivers from interference and waste, in order that the greatest benefit may accrue to those justly entitled to the property as a result of the liquidation undertaken by the appointment of a receiver. The appointment of a receiver carries with it the right to the possession of the insolvent’s property, and also may not be interfered with so long as such appointment is in force. His duty is to protect and preserve the assets for equitable distribution to those justly entitled thereto.
(Stebbins
v.
Savage,
5 Mont. 253, 5 Pac. 278;
Gardner
v.
Caldwell,
16 Mont. 221, 40 Pac. 590.)
So, too, voluntary liquidation of a bank is authorized by our statute. In such cases, insolvency is not a prerequisite. Nevertheless its assets are to be carefully collected and held in trust for the benefit of depositors. Voluntary liquidation is entrusted to the stockholders of a bank under the supervision of the superintendent of banks, and the latter is given power to examine into its affairs at any time to determine whether the rights of creditors and depositors are being protected. If it is found by the superintendent of banks that the bank is not
conducting its liquidation properly, or that tbe interests of its depositors and creditors are not being • properly protected, be is authorized to forthwith take possession of its property and business, and force it to involuntary liquidation. The purpose of the Act is to effect an equitable and economical distribution of the assets of such bank among its creditors, and for this purpose all of its assets are as effectually placed in the hands of the law for purposes of liquidation as though a receiver were appointed. The end to be accomplished is the same. The • available assets of such a bank are held in trust, and so conserved that each depositor or other creditor shall receive payment or dividend according to the amount of his debt, and that none of equal class shall receive any advantage or preference over another. The minimization of the expense incident to a voluntary liquidation may be an attractive feature of this method. It is manifest that, were actions to be permitted against such a bank upon an admitted claim, unnecessary expense and a wasting of assets would result. So that where, as here, the indebtedness is acknowledged, and there has been no failure on the part of those in charge of the bank’s affairs in carrying forward its liquidation, as trustees, an action against it upon such a claim will not lie.
Under similar statutory provisions of the United States respecting national banks (secs. 5220, 5221, Rev. Stats. [U. S. Comp. Stats., sees. 9806, 9808]), it is held that the action of the stockholders in voting to go into voluntary liquidation is equivalent to the appointment of a receiver in its effect on the property and the rights of the creditors. The assets of the bank become a trust fund, to be administered for the benefit of all creditors
pro rata,
and, while the bank retains its corporate existence and may be sued, the effect of a judgment obtained against it by a creditor is only to fix the amount of the debt. He can acquire no lien which will give him. any preference or advantage over other general creditors.
(Merchants’ Nat. Bank
v.
Nat. Bank of Lillington
(D. C.), 231 Fed. 556.)
In this case it is manifest from the terms of the certificate made the basis of the action that the bank is in voluntary
liquidation. Therefore, it is at once apparent that the plaintiff cannot maintain the action on any theory, and the court very properly denied him the right to amend. The judgment is affirmed.
'Affirmed.
Mb. Chief Justice Callaway and Associate Justices Holloway, Stark and Matthews concur.