US Laws, Codes, Statutes & Cases

§ 1339.09. Check drawn by fiduciary upon account of his principal; liability of bank.
 

If a check is drawn upon his principal's account by a fiduciary who is empowered to do so, the bank may 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 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. 
 

HISTORY: GC § 8509-13; 120 v 343, § 7; Bureau of Code Revision. Eff 10-1-53.