As we have already seen, a deposit by a trustee rightfully made in the bank makes the trustee merely a general creditor of the bank.1 But a man may be a trustee because he is acting in violation of the rights of some one else, and the result as to the bank is quite different from the former case. The bank, of course, may act upon what it knows. If it has no notice of the trust character of the fund it may treat the depositor as the owner.2 But if it, knowing or having notice of the trust character of the fund, or knowing or having notice of the fact that the fund is the property of some one else than the depositor, acts in violation of the rights of the real owner or beneficiary, it becomes itself a trustee.3 Again, the real owner of the fund cannot be made a depositor against his will.4 A rightful trustee with the legal title is authorized to deposit the money to his credit as trustee, but not to his private credit;5 hence, if the bank knowingly permits one standing in a fiduciary relation to appropriate the trust fund for any other than a lawful purpose,6 or if it permits the trustee to take the fund for his private benefit,7 or if it knowingly appropriates the fund in violation of the trust,8 it becomes itself a trustee for the amount in favor of the beneficiary. If it has the means of knowledge or notice that the depositor is acting in violation of the rights of one who owns the fund and is himself a constructive trustee, by permitting or assenting to the act it becomes itself a trustee ex maleficio.9 The result of the foregoing facts is that if the money came rightfully into the bank as a general deposit, by paying it out in violation of the trust the bank becomes liable to the beneficiary in the same way it stood liable to the trustee.10 But if a constructive trustee who is himself acting in violation of the rights of the real owner deposits the money in the bank, and the bank receives it with knowledge that the real owner of the fund does not assent to or is not cognizant of the deposit, the bank itself becomes a trustee ex malefioio, and the assets of the bank become impressed with a charge to the amount of the trust funds.11 The reason of the rule is perfectly plain. The money of the real owner went to swell the assets of the bank. The bank knowingly mingled funds of which it was a trustee with funds which it owned, and hence the beneficiary has the right to have the whole fund impressed with a trust in his favor.12 The reasons for this rule will be found fully stated in the cases cited in the notes below. On the other hand, if the bank received the money without notice of its trust character, even though the depositor was acting in violation of the rights of the owner, the true owner has the right to pursue the fund through its various transmutations, as long as he can trace the fund into any specific collection of property.13 If the property is money, which has no "earmarks," as the courts say in the homely phrase borrowed from the patois of the agister of cattle, the owner can sue at law for money had and received,14 but in this way he would lose his claim upon any specific property, because the judgment at law could not preserve the lien upon the property into which the money went.15 But if the owner brings an equitable action, he impresses the trust upon the property into which his funds found their way. Since now the bank owns its assets, and since it is not a bona fide holder except for what it has paid out or appropriated without notice of the trust,16 it necessarily follows that the bank stands in the situation of any other holder of trust property who has obtained trust property with no right to hold it and has mingled it with property of his own. From the very nature of the case the bank assets must be considered as one fund in a constant state of change, where all the property of the bank is mingled together. The owner of the trust fund, therefore, who has never consented to the bank's acquisition of his property can claim a priority as a preferred charge or a lien upon the bank's assets of a higher character than the claim of any general creditor who has no lien, and on an equality with every other creditor with an equitable lien of the same description, for any balance of the fund which remained credited in the bank at the time it received notice of the trust character of the fund.17 But many courts deny panies, the securities of the trust department are kept separate from the assets of the banking department. But the moneys of the trust department from the necessity of the case must go into the general assets of the bank, and be taken from those assets and loaned. The moneys of the various trusts, of necessity, are mingled with the general bank funds, although it is likely each trust may be credited with the moneys received into the bank from it. But at any rate they become and are mingled with the general funds of the bank. If now such a banking and trust company should fail, those courts which hold that the priority of the owner of the trust fund is lost upon mingling would be compelled to hold that the trust creditors had no priority over the general depositors in the bank. It would not help the matter under these decisions for the bank officers, anticipating a failure to take the amount of the trust deposits out of the funds of the bank and put them in a separate place, properly marked, because such an act would be a fraudulent preference where preferences are forbidden. If those general bank creditors were trust depositors also, as they are in some savings banks, which are run not in the interest of stockholders, but in the interest solely of the depositors, there would be no priority for one trust claimant over another, as one case has held.20 But where there are two departments, one a commercial banking department and the other a trust department, the claims of general depositors meet those of trust claimants. The trustee has mingled the funds with his own money. Could these courts be consistent and hold that the general creditors of a trustee were on the same level as the beneficiaries for whom he was trustee? If those courts would not so hold they would confess the unsoundness of their doctrine. The conclusion is, then, that where the beneficiary or real owner of the fund is not in some way a party to the deposit of his funds in the bank, he has a priority for the balance of his account, being whatever has not been rightfully paid out or appropriated by the bank without notice of his claim.