§556-5  Check drawn by and payable to
fiduciary.  If a check or other bill of exchange is drawn by a fiduciary as
such or in the name of the fiduciary's principal by a fiduciary empowered to
draw such instrument in the name of the fiduciary's principal, payable to the
fiduciary personally, or payable to a third person and by the third person
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 the fiduciary's obligation as fiduciary in transferring the instrument, and
is not chargeable with notice that the fiduciary is committing a breach of
obligation as fiduciary unless the transferee takes the instrument with actual
knowledge of such breach or with knowledge of such facts that the transferee's
action in taking the instrument amounts to bad faith. [L 1945, c 197, §6; RL
1955, §189-6; HRS §556-5; gen ch 1985]



 



Cross References



 



  Uniform Commercial Code, see chapter 490, Article 3.