(after stating the facts as above). To the report of the master numerous exceptions were filed on behalf of the defendánts to the cause. Among the findings of the master excepted to by the defendants and approved by the court is the following :

—from which appears deducted as improperly charged to John M. Smith certain items aggregating $68,380.87. The case shows that the books of the Sheep Company contain the only record of John M. Smith’s transactions with it. They were kept by McNaught during the time he acted as manager of the company under John M. Smith’s directions, and thereafter by one Flatt, and contained a ledger account with John M. Smith. The account opens in Jan *693 uary, 1897, and shows at the end of that year a balance due from Smith to the company of $8,324.38. This balance is carried into the account as a debit at the beginning of 1898, and the balance for that year, $14,682.70, is carried over to the next year, the account for which is opened with it. In the early part of 1899 John M. Smith made the purchase from the executor of the estate of the deceased, William A. Smith, which was held fraudulent and void by this court on the former appeal. And in the account of John M. Smith with the company no balance is struck at the end of the year 1899, nor is any balance carried over into the account for 1900. The account for the latter year appears balanced by this entry on the credit side: “P. & T. $17,507.02.” That P. & L,. — evidently profit and loss — item is not carried over to the next year, but a new account opened as at the beginning of 1900. At the end of 1901 is an entry on the credit side “By dividends $7,500,” and the balance — $1,098.85—is carried over to the beginning of the account for 1902, which account does not appear to have been balanced, and nothing is carried from it to the account for 1903. At the close of the account for 1903 is a credit entry of “D. I. to balance $19,232.-45.” The accounts for 1904, 1905, and 1906 consist of various debit items, and that of 1907 of various debit items and one “Credit by dividends, 900.50” at the bottom of which account are the words: “The above all settled by John and May (or Mary) — [in red ink].” According to the testimony of the complainant’s expert witness, J. C. Ricker, the aggregate of the withdrawals shown by the account over the credits shown by it down to 1907 was $211,302.38, which amount was somewhat reduced by further credits to which John M. Smith was entitled, as shown on the trial. In 1907 this suit was begun, and thereafter dividends were declared by the board of directors of the company as will afterwards appear.

The main contentions on the part of the appellants are that the debtor balances shown by the John M. Smith accounts cannot be properly considered as dividends or profits received by him, that there was no proof that the Smith Bros. Sheep Company had any profits on hand out of which dividends could be declared or profits divided, and that dividends can only be paid by a corporation after being regularly declared by its board of directors, and that prior to the year 1907 it is not pretended that any dividends were so declared, from all of which it is urged on their behalf that for such debts he, and subsequently his.estate, became liable to the Sheep Company, and that whatever of such moneys belong to the appellee as the owner of stock in that corporation can only be first collected through the corporation, and thereafter from the representative of the estate of the deceased John M. Smith.

It appears that John M. Smith subsequent to the death of his brother owned a majority of the stock of the Sheep Company, and that, after he acquired from the exec'utor of his brother’s estate all of the stock of the latter, he and his wife together held nearly all of the stock, the few remaining shares being held by relatives, *694 those held by- the other directors being held in trust for'him. So that John M. Smith was not only the holder of a large majority of the stock, but was in absolute control of the board of directors and of all of the affairs of the corporation. The suggestion on the part of the appellants that there were no profits out of which dividends could have been paid is negatived by the record. Evidence introduced by them is to the effect that from the time Elatt succeeded McNaught in 1901 the only minutes of the meetings of the directors of the Smith Bros. Sheep Company until after the commencement of this suit in 1907 were kept on sheets of paper, which were offered in evidence by the appellants. They are the following exhibits:

The capital stock of the Sheep Company consisting of 250,000 shares of the par value of $1, it will be seen that the dividend thus declared August -17, 1907 was $25,000, that declared September 14,, *697 1907, $50,000, and that declared September 15, 1908, $12,500, and there is evidence going to show that the business of the company was profitable at all times after the death of William A. Smith. Such hooks of account of its business as were kept were kept under the supervision and control of John M. Smith.

[ 1 ] The statute of the state required that all corporations for profit should keep a record of all their business transactions. Montana Civil Code, § 540 (Rev. Codes, § 3902). McNaught was his brother-in-law, and Elatt was also a family connection. John M. Smith was not only a director of the company, but its president, general manager, and in control of all of its operations, financial and otherwise. Under such circumstances, the books were admissible in evidence, and no presumption can be indulged that any entry made in them against him was erroneous. On the contrary, the presumption is that all such entries were rightly made. His position was that of trustee, and it was incumbent upon him to see that proper books of account were kept. Bacon v. United States, 97 Fed. 35 , 38 C. C. A. 37 ; San Pedro Lumber Co. v. Reynolds. 121 Cal. 74 , 53 Pac. 410 ; 2 Encyc. of Evidence, 678; Cook on Stock (4th Ed.) 727, note.

[21 He cannot escape accountability upon the contention that prior to 1907 there was no formal declaration of dividends, nor, under the circumstances appearing, can any of the appellants be heard to say’ that the moneys shown by the books to have been withdrawn by John M. Smith during the period in question were ever intended by him or expected by them to be repaid to the corporation. In the first place, while it is true that in general a corporation is a distinct entity from its stockholders, nevertheless, where an individual owns practically all of its stock and controls all of the operations of the corporation, they are, in proper cases, regarded by the courts as one and the same. We had a case of that sort before us at the last term — Linn & Lane Timber Co. et al. v. United States (C. C. A.) 196 Fed. 593 — where will be found a reference to a number of cases to that effect. So may a court of equity, which always looks through the form to the substance of things, avoid the necessity of driving a wronged party to a circuity of actions, and treat as dividends all amounts received in consequence of a division of the profits of the corporate business, as the court below directed the master to do, and as he did do, as shown by his report confirmed by the trial court.

Tn the case of Groh’s Sons v. Groh, 80 App. Div. 85 , 80 N. Y. Supp. 438 ,_ the corporation in question, grew out of a partnership. Until April 16, 1897, the stock of the corporation was owned by John Groh and his mother, Julia Groh. On that day one Elammer bought the stock of the mother. -In passing upon the questions which arose in the case the court said:

*699 The judgment in that case was reversed by the Court of Appeals upon the ground that certain .evidence was improperly admitted, but the legal principles upon which the case was decided were impliedly approved, since the case was remanded for a new trial for the reason stated. Groh’s Sons v. Groh, 177 N. Y. 8 , 68 N. E. 992 .

In Thompson on Corporations (2d Ed.) § 1074, it is said:

In United States v. Milwaukee Refrigerator Transit Co. (C. C.) 142 Fed. 247, 255 , the court said:

In sustaining certain acts of a corporation, although there was no formal meeting of its board of directors, in the case of Harbor Co. v. Manning, 94 Tex. 558 , 63 S. W. 627 , the court said:

[4] In the case at bar all of the facts and circumstances go to show that all of the appellants -treated as profits of the business the withdrawals shown upon the books of the company to have been made by John M. Smith. By none of them, nor by the corporation itself, so far as appears, was it claimed that the annual debits shown against him were debts due the company. McNaught, though available, was not produced as a witness by those called on to make the accounting. Flatt testified that the first entries he made in the books were made January 8, 1901. He was questioned and answered in respect to the entry of “December, By dividends, $7500,” and the “D. I. to balance, $19,232.45” entry hereinbefore referred to, as follows:

Flatt was further questioned and answered as follows:

The explanation thus given by Flatt of the entries “By dividends. $7500.” and “D. I. to balance, $19,232.45,” cannot be accepted in the face of the fact that neither of those entries were carried forward into the debit account for the next or any succeeding year, any more than was the “P. & h. (manifestly meaning profit and loss') $17,507.02” entry, concluding the account for the year 1900. Flatt testified that in 1906 or 1907 he bought 25,000 shares of the stock from John M. Smith, and paid him a dollar a share for it. About the same time Napoleon B. Smith acquired 5,000 shares from John M. Smith by gift and 5,000 shares more by purchase from the latter’s wife — the price not appearing. It is most significant that neither Flatt nor N. B. Smith then claimed that John HI. Smith was then indebted to the company in more than $200,000 or in any other amount; nor did they so claim when shortly after that purchase a dividend of $25,000 out of the profits of the business was declared. The payment of any such indebt *702 edness into the treasury of the company would naturally have greatly increased such dividends. Moreover, it appears that in the latter part of 1907 the Sheep Company executed to John M. Smith its promissory note for $10,499.50. We quote from the record the following in respect to that matter:

It is impossible to reconcile such a transaction with the claim now made that John M. Smith was then indebted to the sheep company in a very large sum of money, in the absence of some satisfactory explanation, which is not given.

In addition to the foregoing considerations, it appears that no claim was ever presented by or on behalf of the Sheep Company against the estate of John M. Smith, and thus the right to enforce payment out of his estate, if such an obligation existed at his death, has been lost by the negligence of the appellants Mary M. Smith and N. B. Smith, and of Flatt, the directors of the company. Flatt was questioned and answered in respect to that matter, as follows:

We are of the opinion that there is no merit in the appeal, and the judgment is accordingly affirmed.