The master to whom the case was referred reports, that William L. Baker, the first administrator of the estate of Albert H. Bird, opened two accounts with the defendant. By the terms of deposit as entered on its books, the first stood in his name individually, while the second, consisting wholly of moneys belonging to the estate, appeared in the name of the estate followed by his own name as administrator. But while the money deposited could be disposed of by the defendant subject only to the obligation to pay an equivalent sum on demand, or to his order, the checks of the depositor would not transfer the debt or title to the debt to the payee without the defendant’s consent. Carr *418v. National Security Bank, 107 Mass. 45, 58. Gregory v. Merchants’ National Bank, 171 Mass. 67, 69. Heath v. New Bedford Safe Deposit & Trust Co. 184 Mass. 481, 483. Bank of the Republic v. Millard, 10 Wall. 152, 157. Phoenix Bank v. Risley, 111 U. S. 125. The master finds, that either to reimburse the defendant for overdrafts, or for his own private purposes, Baker as administrator transferred the money of the estate to his personal account by checks drawn to his own order, and that it also accepted checks in similar form drawn on the funds of the estate deposited in a national bank, and credited him with the amounts. The report further states that there was no evidence to show that the administrator had authority in fact to make any of these transfers for his own use, and, there having been none in law, the plaintiff, who is the second administrator of the Bird estate, having been partially reimbursed by the payment of the surety company on the first administrator’s bond, brings this bill in equity to recover from the defendant the full amount of the embezzled deposits. The second and third of the defendant’s nine exceptions to the report having been expressly waived, we first consider the first, fifth and sixth, which raise the questions whether the finding of the master that the decree of the Probate Court upon the administrator’s second account was conclusive as to the amount of Baker’s embezzlement, and his rulings that the plaintiff’s right of recovery was not affected by the conduct of the surety company, or defeated by the failure of the next of kin of Bird to discover his misconduct and protect the estate, and the exclusion of evidence offered in support of these alleged defenses, were erroneous.
The surety company was obliged to pay the amount fixed by the probate decree until the penal sum was exhausted, and Baker having filed only a first account on which no action was taken by the court until after his death, the decree upon the second probate account, presented by the administrator of Baker’s estate, is decisive as to the amount of the defalcation, and cannot be collaterally attacked in the present litigation. R. L. c. 162, § 2. Bennett v. Pierce, 188 Mass. 186, 187. Connors v. Cunard Steamship Co. 204 Mass. 310, 322.
If it had not paid, the plaintiff could have sued, and the failure of the next of kin to ascertain, that the estate was being misappropriated, would not have defeated the suit. Oberlin College v. *419Fowler, 10 Allen, 545. Hayes v. Hall, 188 Mass. 510, 514. Choate v. Arrington, 116 Mass. 552, 556. The plaintiff if he preferred could resort to the bond, rather than litigate the alleged equitable claims now presented against the defendant, which if fully recovered would have been insufficient to exonerate the surety. By relying on the bond he did not waive his right to proceed subsequently against the defendant, even if by agreement between them the expenses of the present litigation are to be borne by the surety, and if successful, the amount recovered is to be divided in certain proportions for its benefit and the benefit of the estate. O’Herron v. Gray, 168 Mass. 573. Moreover, the surety would have been subrogated to the excess, after the difference between the penalty of the bond and the amount of the probate decree with the costs of recovery had been satisfied, from any proceeds recovered from the defendant, and could have enforced this right by suit. Johnson v. Bartlett, 17 Pick. 477. Hart v. Western Railroad, 13 Met. 99. Wall v. Mason, 102 Mass. 313, 316. Thayer v. Finnegan, 134 Mass. 62, 66.
It may be assumed that if the next of kin had been diligent the misconduct of the administrator might have been discovered earlier; but they are not shown to have known of the transactions or been possessed of any information which should have aroused their suspicion, and their inaction by failing to compel the administrator to account, or to inquire as to his administration of the estate did not mislead the defendant, with whom they sustained no contractual relations. Stiff v. Ashton, 155 Mass. 130.
The agreement of indemnity which Baker gave to procure the contract of suretyship having been for the protection only of the surety, its failure to enforce it does not estop the plaintiff from pursuing the defendant if a participator in the administrator’s betrayal of the trust.
But if these exceptions are not tenable, the fourth, seventh, eighth and ninth exceptions present the principal questions upon which the defendant’s liability depends. It broadly contends that the master’s findings that on and after the date of the first overdraft, which was paid by a check drawn on the estate’s account, the defendant if judged from the point of view of a reasonably prudent banker had knowledge of such facts as should have led it to suspect that the funds of the estate were being wrongly used, *420were unwarranted either in law or upon the evidence, and that it cannot be held for any part of the moneys taken by the administrator. The personal property of the estate was held by him in a fiduciary capacity, and the source and nature of the respective accounts were fully disclosed by the contract. Robins v. Hope, 57 Cal. 493, 497. Hayes v. Hall, 188 Mass. 510, 511. J. G. Brill Co. v. Norton & Taunton Street Railway, 189 Mass. 431. Quinn v. Burton, 195 Mass. 277,279. And in the discharge of their several duties, which were fully detailed by the master, the officers and agents of the defendant were charged with knowledge of the scope and effect of the various entries relating to the deposit as shown on the defendant’s books. Foster v. Essex Bank, 17 Mass. 479, 489. Elliott v. Worcester Trust Co. 189 Mass. 542, 545. East Hartford v. American National Bank, 49 Conn. 539. Bundy v. Monticello, 84 Ind. 119. American Exchange National Bank v. Loretta Gold & Silver Mining Co. 165 Ill. 103. Cutler v. American Exchange National Bank, 113 N. Y. 593. Duncan v. Jaudon, 15 Wall. 165. Bodenham v. Hoskyns, 2 DeG., M. & G. 903. Pennell v. Deffell, 4 DeG., M. & G. 372. Bailey v. Finch, L. R. 7 Q. B. 34. If the primary relation was that of debtor and creditor, nevertheless on the face of a specific contract the money belonged to the estate, and the defendant must be held to have known, that if the administrator appropriated it to his own use the appropriation would be a breach of his trust. Shaw v. Spencer, 100 Mass. 382. McCarthy v. Provident Institution for Savings, 159 Mass. 527. O’Herron v. Gray, 168 Mass. 573. Gerard v. McCormick, 130 N. Y. 261. National Bank v. Insurance Co. 104 U. S. 54. The money due to the defendant for overdrafts was paid with its knowledge and consent by checks drawn on the administrator’s account, which were in excess of the debt, and were correspondingly credited in his private account. If, as the defendant urges, the legal title to the personal property of the estate was in the administrator, the beneficial interest was in the next of kin of the intestate, who not only could demand but could enforce an accounting. R. L. c. 150. Bard v. Wood, 3 Met. 74. Choate v. Jacobs, 136 Mass. 297. Silsby v. Young, 3 Cranch, 249. And the nature of the fund was not changed by its having been diverted, and placed to the personal credit of the administrator. Morrill v. Raymond, 28 Kans. *421415. National Bank v. Insurance Co. 104 U. S. 54. Union Stock Yards Bank v. Gillespie, 137 U. S. 411. Bailey v. Finch, L. R. 7 Q. B. 34. It is not a sufficient answer, that, if inquiry had been made, doubtless the administrator might have given an explanation which would have appeared to be reasonable. Having notice of the trust, the defendant was dealing with trust funds, and was bound by the information which it could have obtained if an inquiry had been pushed until the truth had been ascertained. Shaw v. Spencer, 100 Mass. 382, 389, 391. Loring v. Brodie, 134 Mass. 453, 459. Ex parte Kingston, L. R. 6 Ch. 632. The transformation of the account in the manner adopted was furthermore a voluntary participation on the part of the defendant with an agreement to credit and pay the amount of the excess to Baker individually. The defendant places much reliance upon the case of Gray v. Johnston, L. R. 3 H. L. 1, where a single check on the funds of the estate having been drawn by the executrix not to her individual order, but to the order of the firm to whose membership she succeeded on the death of her husband, the defendant was held not to be responsible for the misappropriation, as it might well have been assumed by the bank, that the check was properly given in settlement of the accounts between the partnership and her husband’s estate. The decision in Fillebrown v. Hayward, 190 Mass. 472, rests upon the ground that the defendant received the checks of the treasurer drawn on funds of the corporation in payment of his individual debts in good faith, and without any actual knowledge or information which should have put her upon inquiry as to the source from which he obtained the sums sent her. So also in Batchelder v. Central National Bank, 188 Mass. 25, the single justice found, that the bank had no reason to believe that the trustee who deposited the check in his individual account, which was payable to his own order as trustee, was acting dishonestly, while in Newhuryport v. Spear, 204 Mass. 146, the city treasurer having paid his own debt by a check drawn against the city’s funds, it was said, that “in the absence of suspicious circumstances the bank had no duty to concern itself with that subject.” In the present case, however, during a period from January 25, 1902, to December 23, 1902, there were numerous checks differing in amount, but each of the same general tenor and fraudulent *422nature, and two distinct accounts plainly indicating the different capacities in which Baker transacted business with the defendant. The payments to itself, with the accompanying transfers from the estate’s account to his private account could not have been accomplished without the active instrumentality of the defendant. If the doctrine of constructive notice has no application where there is no duty of inquiry resting upon the banker, the fifth and sixth general findings establish the fact, that the unlawful transfers were made under such conditions, that the defendant was charged with knowledge of the irregularities. Kennedy v. Green, 3 Myl. & K. 699. Wood v. Carpenter, 101 U. S. 135.
The findings having been amply warranted by the master’s statement of the evidence are decisive as to the defendant’s knowledge, as well as of its participation, for which it must be held accountable. Greenfield School District v. First National Bank, 102 Mass. 174, 176. Merchants’ National Bank v. Haverhill Iron Works, 159 Mass. 158. National Revere Bank v. Morse, 163 Mass. 383, 385. Regester’s Sons Co. v. Reed, 185 Mass. 226, 227. The principle governing the defendant’s liability is, that a banker who knows that a fund on deposit with him is a trust fund cannot appropriate that fund for his private benefit, or where charged with notice of the conversion join in assisting others to appropriate it for their private benefit, without being liable to refund the money if the appropriation is a breach of the trust. Shaw v. Spencer, 100 Mass. 382. Fisher v. Brown, 104 Mass. 259, 261. American Exchange National Bank v. Lorette Gold & Silver Mining Co. 165 Ill. 103. American National Bank v. Fidelity & Deposit Co. 129 Ga. 126. Swift v. Williams, 68 Md. 236. Duckett v. National Mechanics’ Bank, 86 Md. 400. Bank of Greensboro v. Clapp, 76 N. C. 482. Ihl v. Bank of St. Joseph, 26 Mo. App. 129, 141. Commercial & Agricultural Bank v, Jones, 18 Texas, 811. East Hartford v. American National Bank, 4 Conn. 539. Bundy v. Monticello, 84 Ind. 119. Ward v. City Trust Co. 192 N. Y. 61. Farmers’ Loan & Trust Co. v. Fidelity Trust Co. 86 Fed. Rep. 541. National Bank v. Insurance Co. 104 U. S. 54. Compare Goodwin v. American National Bank, 48 Conn. 550.
The master’s seventh general finding, that the defendant did not have any actual knowledge or suspicion that the administrator by the subsequent transfers was misappropriating the funds of *423the estate, and that it was not privy to them, is not inconsistent with the fifth and sixth findings, and disposes of the plaintiff’s further contention, that the defendant should be charged with the amount of these embezzlements. We are not unmindful of the strength of the plaintiff’s argument, that even if the defendant was under no obligation to supervise the application of the money, yet it could not have been compelled to honor and credit his individual account with checks drawn on trust funds to his individual order by which the numerous fraudulent transfers from one account to the other covering a period of two years were effected, and that by the respective contracts of deposit the individual and representative accounts were plainly distinguishable. Thatcher v. State Bank, 5 Sandf. 121. Chicago Marine & Fire Ins. Co. v. Stanford, 28 Ill. 168, 173. Gerard v. McCormick, 130 N. Y. 261. Hunt v. Maniere, 34 Beav. 157, 160. But while upon their face these circumstances well might have led the defendant to suspect that a misappropriation was taldng place, and that money of the éstate was being applied to the administrator’s private use, the question whether the defendant had notice of the irregularities was one of fact, and the master’s finding not appearing to be clearly wrong should not be reversed. Greenfield School District v. First National Bank, 102 Mass. 174, 176. Fillebrown v. Hayward, 190 Mass. 472.
The five checks drawn by Baker to his own order on funds of the estate deposited in a national bank, which the defendant discounted, and placed to his individual credit are also covered by the master’s finding. It presented the checks in good faith to the bank on which they were drawn, and had the right to rely on the representation of the bank by the payment of the money, that the checks were not being used for Baker’s personal advantage. R. L. c. 73, §§ 69, 72, 73. Havana Central Railroad v. Knickerbocker Trust Co. 198 N. Y. 422.
The exceptions of each party to the master’s report, therefore, must be overruled, and the report confirmed, and the defendant is to be charged only for the amounts received in payment of the overdrafts and the amounts transferred to Baker’s individual account in the settlement of the overdrafts with interest from the dates stated in the report.
Decree accordingly.