19 If a general deposit is created and the depositor by fraud is induced to let his deposit remain, he is a general creditor. Venner v. Cox, 35 a W. R 769.

1 See note 3 to last section.

2 See Sec. Sec. 135 and 136, ante. 3See Sec. 136, ante.

4 State v. Midland Sav. Bank, 71 N. W. R 1011: Winslow v. Harri-man Iron Co., 42 S. W. R 698.

5 It is a wrongful mingling.

6See Sec. 136, ante.

7SeeSec. 136, ante.

8 See Sec. 136, ante, and Am. Trust Co. v. Boone, 29 S. E. R 182.

9SeeSec. 136, ante.

10 That is to say, the beneficiary has only the claim of a general creditor. The bank received the fund rightly and the funds did not pass into the assets of the bank as a trust fund. The claim of the beneficiary is only a claim to recover damages for a breach of the trust.

11 The bank knowingly receives the fund in violation of the trust. It is in the same position as any person would be who so received money. Central Nat. Bank v. Life Ins. Co., 104 U. S. 54; Van Alen v. American Nat. Bank, 52 N. Y. 1: Knatchbull v. Hallett, L. R 13 Ch. D. 696, state the principle. A very excellent article on the subject will be found in 2 Harv. Law Rev. 28.

12 Myers v. Board of Education, 51 Kan. 87; Wasson v. Hawkins, 59 Fed. Rep. 233; Massey v. Fisher, 62 Fed. R 958; Kimmel v. Dickson,

5 S. D. 221; Boyer Ind. Dist. v. King, 80 Iowa, 497; People v. City Bank, 96 N. Y. 32; Leonard v. Lat-timer, 67 Mo. App. 138; Stoller v. Coates, 88 Mo. 514; Harrison v. Smith, 83 Mo. 210; San Diego Co. v. Cal Nat. Bank, 52 Fed. R 59; State v. Thum, 55 Pac. R 858; In re Johnson, 103 Mich. 109; More-land v. Brown, 86 Fed. R 259; Windstanley v. Second Nat. Bank, 13 Ind. App. 544; Anderson v. Pacific Bank, 112 Cal. 598; Wallace v. Stone, 107 Mich. 190; Anheuser-Busch Ass'n v. Morris, 36 Neb. 31; and see especially for the principle the splendid judgment of Stanley Matthews in Central Nat Bank v. Life Ins. Co., 104 U. S. 54, and of Sir George Jessel in Knatchbull v. Hallett, L R. 13 Ch. D. 696. Wherever the assets of the bank have been augmented by the trust fund, there must be a priority. Beard v. School District, 88 Fed. R. 375;

Wiggins v. Stevens, 53 N. Y. Supp. 90; Paul v. Draper, 73 Mo. App. 568; City Bank v. Blackraore, 75 Fed. R. 771. The last case states a correct principle and fails to properly apply it to the facta

15 See cases cited in note 11, supra. 14 Keener, Quasi-Cont., 183 et seq. 13 He simply takes a claim for damages, 16 See Sec. 136, ante. 17 See the principle stated in the this obvious conclusion, and say that where the fund has become mingled with the assets of the bank there can be no preference.18 This conclusion violates well settled principles and is not sound. It ignores the very obvious suggestion, which is that it will be presumed that the banker in paying out moneys paid out his own funds.19 The difficulty really cases in notes 11 and 12, supra. But some cases, not understanding the nature of bank transactions, confine the priority to cash on hand in the bank. Merch. Nat. Bank v. School District, 94 Fed. R 705; Bank v. Latimer, 67 Fed. R 27, on the theory that the bank drew out its own money; State v. Foster, 5 Wyo. 199.

18 See cases cited in note 6, Sec. 342, post, for the Illinois citations, in note 23 to Sec. 343, post, and in notes 6, 12 and 13 to Sec. 344, post, Wisconsin, Illinois, Tennessee and perhaps Massachusetts are the main offenders. The Wisconsin cases are a queer illustration of the power of judicial obstinacy. In McLeod v. Evans, 66 Wis. 401; Francis v. Evans, 69 Wis. 115, and Bowers v. Evans, 71 Wis. 133, the court in opinions delivered by Chief Justice Cole, who with Chief Justice Dixon and Chief Justice Ryan has given the Supreme Court of Wisconsin a deservedly high standing, affirmed the correct principle; but Justice Cassoday, through an inability to understand that a transfer of credit in a bank is the same thing as the receipt of money, dissented. The Indiana court in Windstanley v. Second Nat. Bank, 13 Ind. App. 544, shows a like lack of comprehension in its criticism of these Wisconsin cases. But after three decisions by a court it would have been supposed that a judge would have been willing to concede that he was probably wrong in dissenting. But in Nonotuck Silk Co. v. Flanders, 87 Wis. 237, through a new court, Justice Cassoday obtained his opportunity against a non-resident of Wisconsin. A Chicago corporation sent to a Wisconsin bank a draft on one Lemke. The Wisconsin bank collected the money and sent its check therefor upon a Chicago bank. The Chicago bank refused to pay the check. Every lawyer would concede that the unpaid check was not payment by the Wisconsin bank. The funds, therefore, remained in the Wisconsin bank as bailee. But because the Wisconsin bank had other dealings with the Chicago bank to a larger amount than the draft, Justice Cassoday in some mysterious way discovered that the Chicago firm's money 1 ad passed in those transactions, and that therefore the Wisconsin bank had gotten rid of the proceeds of the collection. The case needs but to be stated to show its unsoundness. The extraordinary decision in Dowie v. Humphrey, 91 Wis. 98, shows the necessary result of Justice Casso-day's perverted views of the law. 19 State v. Foster, 5 Wyo. 109; Merch. Nat Bank v. School Disarises from the fact that the courts will not forget that the only person who owns the assets of the bank is the banker and the common phrase, " money in the bank," is really a reminiscence of that mediaeval condition when the only relation that existed between a banker and his depositor was the relation of bailee and bailor, where the banker kept and returned the identical money. "What would be thought of this doctrine applied to banks, if it were applied to an ordinary business man who had received trust moneys into his hands as the wrongful or gratuitous depositary of them, and had merely mingled the money with his own, and then acquired other property with it? "Would any court hesitate to impress a trust upon the property, simply because the man was in debt? Yet this is what these holdings as to mingling amount to. If the banker mingles the fund with his own, knowing its trust character, he perpetrates a wrong. If he does it without knowledge his wrong is not malicious, but it is none the less an injury to the innocent owner, and a violation of his rights. The viciousness of this rule be-comes apparent when it is applied to those banks which accept and execute trusts. Here the bank is an express trustee, and assumes all the duties of a trustee. It may be that it is an executor, or an administrator or a trustee by deed or by will. It is required, no doubt, to deposit securities for the protection of its creditors, but those securities are not equal to the amounts which the corporation may receive in trust. Sometimes, and no doubt always in carefully-managed comtrict, 94 Fed. R. 705. But the rule ought to be that the assets of the bank are a fund, and the bank ought not to be permitted to claim that such assets are not impressed with a trust The opposing cases seem to be governed by the wholly illogical idea that a bank as trustee can have greater rights than any other trustee, simply because it has a larger number of creditors.

These mingling decisions are a weak pandering to larger numbers, by allowing the many general creditors of a bank to have greater rights than the bank itself can claim. Certainly it would be absurd to say that a man could take another's money wrongfully and mingle it with his own and say he owned it all.

20 Vail v. Newark Sav. Inst, 32 N. J. Eq. 627.