Section 55-7-6 - Transfer of check or bill of exchange drawn by fiduciary who holds it as payee ortransferee.
55-7-6. Transfer of check or bill of exchange drawn by fiduciary who holds it as payee or transferee. If a check or other bill of exchange is drawn by a fiduciary as such or in the name of his principal by a fiduciary empowered to draw such instrument in the name of his principal, payable to the fiduciary personally, or payable to a third person and by him transferred to the fiduciary, and is thereafter transferred by the fiduciary, whether in payment of a personal debt of the fiduciary or otherwise, the transferee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in transferring the instrument, and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith.
Source: SL 1943, ch 19, § 6; SDC Supp 1960, § 6.0706.