2015 Kentucky Revised Statutes CHAPTER 386 - ADMINISTRATION OF TRUSTS -- LEGAL INVESTMENTS -- UNIFORM PRINCIPAL AND INCOME ACT 386.140 Checks drawn by a fiduciary payable to third person or to himself.
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386.140 Checks drawn by a fiduciary payable to third person or to himself.
(1)
(2)
If a check or other bill of exchange is drawn by a fiduciary as such, or in the name
of his principal by a fiduciary empowered to draw the instrument in the name of his
principal, the payee is not bound to inquire whether the fiduciary is committing a
breach of his obligation as fiduciary in drawing or delivering the instrument, and is
not chargeable with notice that the fiduciary is committing a breach of his
obligation as fiduciary, unless he takes the instrument with actual knowledge of the
breach or with knowledge of such facts that his action in taking the instrument
amounts to bad faith.
If a check or other bill of exchange is drawn by a fiduciary as such or in the name of
his principal by a fiduciary empowered to draw the instrument in the name of his
principal, payable to the fiduciary personally, or payable to a third person and by
him 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 his obligation
as fiduciary in transferring the instrument, and is not chargeable with notice that the
fiduciary is committing a breach of his obligation as fiduciary unless he takes the
instrument with actual knowledge of the breach or with knowledge of such facts
that his action in taking the instrument amounts to bad faith.
Effective: October 1, 1942
History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky.
Stat. secs. 4711-4, 4711-5.
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