Jennie Wegerslev v. Midland National Bank

Bank and banking -- application of funds deposited by one as trustee. 1. A bank is liable to the owner of trust funds deposited with it by the trustee in his individual name, if, with actual
or constructive notice of the trust character of the funds, it applies such funds upon a past due indebtedness owing by the
trustee personally to the bank; and it cannot then avoid liability by the fact that, with such notice, it changed its position
by returning to the trustee personal notes and collateral held by the bank as security for his indebtedness.