State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_32 > GS_32-9

§32‑9.  Deposit in name of principal.

If a check is drawn upon theaccount of his principal in a bank by a fiduciary who is empowered to drawchecks upon his principal's account, the bank is authorized to pay such checkwithout being liable to the principal, unless the bank pays the check withactual knowledge that the fiduciary is committing a breach of his obligation asfiduciary in drawing such check, or with knowledge of such facts that itsaction in paying the check amounts to bad faith. If, however, such a check ispayable to the drawee bank and is delivered to it in payment of or as securityfor a personal debt of the fiduciary to it, the bank is liable to the principalif the fiduciary in fact commits a breach of his obligation as fiduciary in drawingor delivering the check. (1923, c. 85, s. 8; C.S., s. 1864(l).)