14-7507. Deposit in name of principal
If a check is drawn upon the account of his principal in a bank by a fiduciary who
is empowered to draw checks upon his principal's account, the bank is authorized to pay
such check without being liable to the principal, unless the bank pays the check with
actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary
in drawing such check, or with knowledge of such facts that its action in paying the
check amounts to bad faith. If, however, such a check is payable to the drawee bank and
is delivered to it in payment of or as security for a personal debt of the fiduciary to
it, the bank is liable to the principal if the fiduciary in fact commits a breach of his
obligation as fiduciary in drawing or delivering the check.
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