14-7508

14-7508. Deposit in fiduciary's personal
account

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 endorsed
by him, if he is empowered to endorse 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.