Deposit in fiduciary's personal account
Sec. 9. If a fiduciary makes a deposit in a bank to his personal
credit of checks drawn by him upon an account in his own name as
fiduciary, or of checks payable to him as fiduciary, or of checks
drawn by him upon an account in the name of his principal if he is
empowered to draw checks thereon, or of checks payable to his
principal and indorsed by him, if he is empowered to indorse such
checks, or if he otherwise makes a deposit of funds held by him as
fiduciary, the bank receiving such deposit is not bound to inquire
whether the fiduciary is committing thereby a breach of his
obligation as fiduciary; and the bank is authorized to pay the amount
of the deposit or any part thereof upon the personal check of the
fiduciary without being liable to the principal, unless the bank
receives the deposit or pays the check with actual knowledge that the
fiduciary is committing a breach of his obligation as fiduciary in
making such deposit or in drawing such check, or with knowledge of
such facts that its action in receiving the deposit or paying the check
amounts to bad faith.
(Formerly: Acts 1927, c.17, s.9.)
Last modified: May 27, 2006