22-1-7 - Bank deposits in name of fiduciary.
22-1-7. Bank deposits in name of fiduciary.
If a deposit is made in a bank to the credit of a fiduciary as such, the bank is authorized topay the amount of the deposit or any part thereof upon the check of the fiduciary, signed with thename in which such deposit is entered, without being liable to the principal, unless the bank paysthe check with actual knowledge that the fiduciary is committing a breach of his obligation asfiduciary in drawing the check, or with knowledge of such facts that its action in paying the checkamounts to bad faith. If, however, such a check is payable to the drawee bank and is delivered toit in payment of, or as security for, a personal debt of the fiduciary to it, the bank is liable to theprincipal, if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing ordelivering the check.
No Change Since 1953