COSHOW, J.
The plaintiff complains that the motion for nonsuit did not specify with sufficient particularity the grounds for the nonsuit. We do not-deem it necessary to pass upon that matter. It is very technical, and we prefer to dispose of the appeal upon the merits of the case.
The defendant bank also complains because the action was instituted in Multnomah County instead
of Alberta, Canada. Tbe defendant bas no ground for complaint on that account because it bas answered to tbe merits and thereby submitted to tbe jurisdiction of tbe court. It is a transitory action and no question of tbe jurisdiction of tbe subject matter is involved.
Tbe plaintiff invokes tbe rule that, even if be mistook bis remedy,' tbe court should not have dismissed tbe action. This contention, on tbe part of tbe plaintiff, must be sustained. Our statute expressly provides that a litigation shall not be dismissed because brought on tbe wrong side of tbe court: Section 390, Or. L.;
McCann
v.
Oregon Scenic Trips Co. et al.,
105 Or. 213 (209 Pac. 483);
Simpson
v.
First National Bank,
94 Or. 147 (185 Pac. 913). It was tbe duty of tbe Circuit Court to have retained tbe case and decided it upon its merits, even if tbe cause should have been tried in equity.
For tbe purpose of this appeal, tbe evidence adduced by tbe plaintiff must be construed most favorably to tbe plaintiff. Tbe motion for nonsuit and tbe order allowing tbe motion in effect concludes that, even if all of tbe evidence adduced in behalf of plaintiff is true, tbe plaintiff is not entitled to recover :
Domurat
v.
O. W. R. & N. Co.,
66 Or. 135, 143 (134 Pac. 313). The evidence in this case establishes for tbe purpose of this appeal that tbe plaintiff was tbe owner of one half of tbe receipts for tbe wheat delivered by Newton to tbe Elevator Company at Warner, and by it to tbe defendant bank; that tbe plaintiff requested tbe defendant bank to deposit to plaintiff’s account one half of tbe proceeds of said wheat receipts; that tbe defendant bank agreed to do that, but instead paid all tbe proceeds except $935.44 to Newton, or bis order. Tbe defendant
bank received as one half of tbe proceeds of said wheat receipts, the sum of $3,024.89, which it knew belonged to the plaintiff. The defendant deposited that sum, not to the plaintiff’s account, but to the account of Newton.
“A bank must honor the checks and certificates of its depositor drawn in proper form without regard to the use the depositor is going to make of the fund; the only limitation is that the bank must not itself participate in the profits of the fraud.
“If a bank participates in the misapplication of trust money it is liable; as where money deposited by A. in his own name and known to the bank to belong to another was applied by A. to pay his debt to the bank, it was held liable to the principal.” 1 Morse on Banks and Banking, 592, § 317, and note cited therein.
“Where a bank knowingly participates with a depositor in a misappropriation of trust funds and reaps the fruit of the breach of trust, it becomes liable to the beneficiary for whatever loss the latter sustains.
“Where money deposited in a bank was known by the bank to be held by the depositors in trust, the bank, in accepting such deposit, in payment of a debt due it by the depositors, became liable therefor; for it had at once not only abundant proof of the breach of trust, but participated in it for its own benefit.” 2 Michie, Banks and Banking, 949, § 130.
“A bank having received a deposit, must repay the same to owner on demand.” Magee on Banks and Banking (3 ed.), 295, § 178.
“The rule is that the bank may pay out money on deposit to the rightful owner, but when it has knowledge that a breach of trust is being perpetrated by the depositor, it is liable to the rightful owner of the deposit. * *
‘ ‘ The whole question fixing liability is one of knowledge. The bank must have knowledge that the deposit is a trust deposit and that when it is drawn out
by tbe trustee that he intends to misappropriate it. Unless these facts are clearly established the bank cannot be held.” Magee on Banks and Banking (3 ed.), 304, § 179.
Union Stock Yards Bank
v.
Gillespie,
137 U. S. 411 (34 L. Ed. 724, 11 Sup. Ct. Rep. 118);
Allen
v.
Puritan Trust Co.,
211 Mass. 409 (97 N. E. 916, L. R. A. 1915C, 518, and note);
Huff
v.
Oklahoma State Bank,
87 Old. 7 (207 Pac. 963);
Thompson
v.
State Bank,
4 Cal. App. 660 (88 Pac. 987);
Cunninghann
v.
Bank of Nampa, Ltd.,
13 Idaho, 167 (88 Pac. 975, 121 Am. St. Rep. 257, 10 L. R. A. (N. S.) 706);
First Nat. Bank
v.
Kenney,
116 Md. 24 (81 Atl. 227, Ann. Cas. 1913B, 1337); 7 C. J., pp. 644-646, § 333, p. 658, § 357, p. 675, § 393, p. 679, § 402;
National Bank
v.
Insurance Co.,
104 U. S. 54, 70, 71 (26 L. Ed. 693);
Toronto Club
v.
Dominion Bank,
26 Ont. Law Rep. 333;
First Nat. Bank
v.
Eastern Trust & Banking Co. et al.,
108 Me. 79 (79 Atl. 4).
The money was not directly deposited in the defendant bank by Newton. It appears from the evidence that Newton was not at that time in Alberta, Canada. His sons were operating the farm. The warehouse receipts issued by the Elevator Company were payable to Newton, but deposited in the bank for collection. The bank had knowledge that one half of those wheat receipts belonged to the plaintiff and by the terms of the contract between plaintiff and Newton, a copy of which the manager of the bank said he had, should have been delivered to the plaintiff. At the request of the plaintiff, the bank promised to place to plaintiff’s credit the proceeds of one half of those wheat receipts. One half of the wheat belonged to the plaintiff:
Fox et al.
v.
McKinney et al.,
9 Or. 493, 499, 500;
Lawrence
v.
Phy,
27 Or. 506, 510 (41 Pac. 671);
Broders
v.
Bohannon,
30 Or. 599, 601 (48 Pac. 692); note to
Merchants State Bank
v.
Sawyers Co-operative Assn.,
14 A. L. R. 1362, and following;
In re Place,
224 Fed. 778, 783; 17 C. J. 381, § 6; 36 C. J. 486, § 1442;
DeVaughn
v.
Howell,
82 Gra. 336 (9 S. E. 173, 14 Am. St. Rep. 162, 166).
The defendant hank received the money for the wheat, one half'of which was plaintiff’s. It follows, therefore, that the bank is liable to the plaintiff for money had and received. There are respectable authorities supporting the contention of plaintiff that an action at law will lie to recover from the bank under similar facts:
Drumm-Flato Co.
v.
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COSHOW, J.
The plaintiff complains that the motion for nonsuit did not specify with sufficient particularity the grounds for the nonsuit. We do not-deem it necessary to pass upon that matter. It is very technical, and we prefer to dispose of the appeal upon the merits of the case.
The defendant bank also complains because the action was instituted in Multnomah County instead
of Alberta, Canada. Tbe defendant bas no ground for complaint on that account because it bas answered to tbe merits and thereby submitted to tbe jurisdiction of tbe court. It is a transitory action and no question of tbe jurisdiction of tbe subject matter is involved.
Tbe plaintiff invokes tbe rule that, even if be mistook bis remedy,' tbe court should not have dismissed tbe action. This contention, on tbe part of tbe plaintiff, must be sustained. Our statute expressly provides that a litigation shall not be dismissed because brought on tbe wrong side of tbe court: Section 390, Or. L.;
McCann
v.
Oregon Scenic Trips Co. et al.,
105 Or. 213 (209 Pac. 483);
Simpson
v.
First National Bank,
94 Or. 147 (185 Pac. 913). It was tbe duty of tbe Circuit Court to have retained tbe case and decided it upon its merits, even if tbe cause should have been tried in equity.
For tbe purpose of this appeal, tbe evidence adduced by tbe plaintiff must be construed most favorably to tbe plaintiff. Tbe motion for nonsuit and tbe order allowing tbe motion in effect concludes that, even if all of tbe evidence adduced in behalf of plaintiff is true, tbe plaintiff is not entitled to recover :
Domurat
v.
O. W. R. & N. Co.,
66 Or. 135, 143 (134 Pac. 313). The evidence in this case establishes for tbe purpose of this appeal that tbe plaintiff was tbe owner of one half of tbe receipts for tbe wheat delivered by Newton to tbe Elevator Company at Warner, and by it to tbe defendant bank; that tbe plaintiff requested tbe defendant bank to deposit to plaintiff’s account one half of tbe proceeds of said wheat receipts; that tbe defendant bank agreed to do that, but instead paid all tbe proceeds except $935.44 to Newton, or bis order. Tbe defendant
bank received as one half of tbe proceeds of said wheat receipts, the sum of $3,024.89, which it knew belonged to the plaintiff. The defendant deposited that sum, not to the plaintiff’s account, but to the account of Newton.
“A bank must honor the checks and certificates of its depositor drawn in proper form without regard to the use the depositor is going to make of the fund; the only limitation is that the bank must not itself participate in the profits of the fraud.
“If a bank participates in the misapplication of trust money it is liable; as where money deposited by A. in his own name and known to the bank to belong to another was applied by A. to pay his debt to the bank, it was held liable to the principal.” 1 Morse on Banks and Banking, 592, § 317, and note cited therein.
“Where a bank knowingly participates with a depositor in a misappropriation of trust funds and reaps the fruit of the breach of trust, it becomes liable to the beneficiary for whatever loss the latter sustains.
“Where money deposited in a bank was known by the bank to be held by the depositors in trust, the bank, in accepting such deposit, in payment of a debt due it by the depositors, became liable therefor; for it had at once not only abundant proof of the breach of trust, but participated in it for its own benefit.” 2 Michie, Banks and Banking, 949, § 130.
“A bank having received a deposit, must repay the same to owner on demand.” Magee on Banks and Banking (3 ed.), 295, § 178.
“The rule is that the bank may pay out money on deposit to the rightful owner, but when it has knowledge that a breach of trust is being perpetrated by the depositor, it is liable to the rightful owner of the deposit. * *
‘ ‘ The whole question fixing liability is one of knowledge. The bank must have knowledge that the deposit is a trust deposit and that when it is drawn out
by tbe trustee that he intends to misappropriate it. Unless these facts are clearly established the bank cannot be held.” Magee on Banks and Banking (3 ed.), 304, § 179.
Union Stock Yards Bank
v.
Gillespie,
137 U. S. 411 (34 L. Ed. 724, 11 Sup. Ct. Rep. 118);
Allen
v.
Puritan Trust Co.,
211 Mass. 409 (97 N. E. 916, L. R. A. 1915C, 518, and note);
Huff
v.
Oklahoma State Bank,
87 Old. 7 (207 Pac. 963);
Thompson
v.
State Bank,
4 Cal. App. 660 (88 Pac. 987);
Cunninghann
v.
Bank of Nampa, Ltd.,
13 Idaho, 167 (88 Pac. 975, 121 Am. St. Rep. 257, 10 L. R. A. (N. S.) 706);
First Nat. Bank
v.
Kenney,
116 Md. 24 (81 Atl. 227, Ann. Cas. 1913B, 1337); 7 C. J., pp. 644-646, § 333, p. 658, § 357, p. 675, § 393, p. 679, § 402;
National Bank
v.
Insurance Co.,
104 U. S. 54, 70, 71 (26 L. Ed. 693);
Toronto Club
v.
Dominion Bank,
26 Ont. Law Rep. 333;
First Nat. Bank
v.
Eastern Trust & Banking Co. et al.,
108 Me. 79 (79 Atl. 4).
The money was not directly deposited in the defendant bank by Newton. It appears from the evidence that Newton was not at that time in Alberta, Canada. His sons were operating the farm. The warehouse receipts issued by the Elevator Company were payable to Newton, but deposited in the bank for collection. The bank had knowledge that one half of those wheat receipts belonged to the plaintiff and by the terms of the contract between plaintiff and Newton, a copy of which the manager of the bank said he had, should have been delivered to the plaintiff. At the request of the plaintiff, the bank promised to place to plaintiff’s credit the proceeds of one half of those wheat receipts. One half of the wheat belonged to the plaintiff:
Fox et al.
v.
McKinney et al.,
9 Or. 493, 499, 500;
Lawrence
v.
Phy,
27 Or. 506, 510 (41 Pac. 671);
Broders
v.
Bohannon,
30 Or. 599, 601 (48 Pac. 692); note to
Merchants State Bank
v.
Sawyers Co-operative Assn.,
14 A. L. R. 1362, and following;
In re Place,
224 Fed. 778, 783; 17 C. J. 381, § 6; 36 C. J. 486, § 1442;
DeVaughn
v.
Howell,
82 Gra. 336 (9 S. E. 173, 14 Am. St. Rep. 162, 166).
The defendant hank received the money for the wheat, one half'of which was plaintiff’s. It follows, therefore, that the bank is liable to the plaintiff for money had and received. There are respectable authorities supporting the contention of plaintiff that an action at law will lie to recover from the bank under similar facts:
Drumm-Flato Co.
v.
Bank,
92 Mo. App. 326;
Southern Trust & Commerce Bank
v.
San Diego Savings Bank,
60 Cal. App. 215 (212 Pac. 385);
Henchey
v.
Henchey,
167 Mass. 77 (44 N. E. 1075);
United States Fidelity Co.
v.
United States National Bank,
80 Or. 361, 364-367 (157 Pac. 155, L. R. A. 1916E, 610);
Powder Valley State Bank
v.
Hudelson,
74 Or. 191, 199 (144 Pac. 494);
McStay Supply Co.
v.
Stoddard et al.,
35 Nev. 284 (132 Pac. 545); 2 Michie, Banks and Banking, 943, note 88.
An action for money had and received is an equitable action:
Powder Valley State Bank
v.
Hudelson,
above.
Defendant contends that, because the defendant bank refused to give to plaintiff $1,000 upon his request, he had notice that the bank would not give him credit for one half of the proceeds of the wheat receipts and is not liable. This conclusion does not follow necessarily. The bank was justified in not paying to plaintiff the amount he demanded until he had notified Newton in whose name the wheat receipts were. The bank should have promptly noti
fied Newton of plaintiff’s claim to one half of the wheat receipts. If Newton then contested plaintiff’s claim, the bank might have protected itself by compelling the two claimants to interplead:
Jaselli
v.
Riggs Nat.
Bank, 36 App. D. C. 156 (31 L. R. A. (N. S.) 763, and note);
First Nat. Bank
v. Bache, 71 Pa. St. 213. Again, it does not appear that the amount of receipts deposited at that time entitled plaintiff to receive as much as $1,000.
The evidence is more favorable to plaintiff than the allegations of his complaint. The complaint states facts sufficient to support a judgment in favor of the plaintiff.
The judgment of the Circuit Court is reversed and this case remanded with directions to proceed consistent with this opinion.
Reversed and Remanded, With Directions.
'McBride, C. J., and Burnett and Rand, JJ., concur.