Page:United States Statutes at Large Volume 45 Part 1.djvu/561

 510 -- "Fiducia ry ." "Person." "Principal ." A thin g done "in good fait h ." Persons paying to fiduciaries not respon- sible for application thereof. Rights acquired not invalid by misapplica- tion. No inquiry required whether fiduciary has committed breach of his obligation in trans- fer of securities regis- tere d in his name as such. Liab ility if trans fer registered with knowl- edge of breach. Indorsee not bound to inquire if negotiable instrument was in- dorsed by fid uci ary without committing breach of obli gation. Tra nsf ers in pa y- ment of personal debt of fiduciary. Responsibility as to cheeks by fiduciary to a t hird person. SEVENTIETH CONGRESS :" -- Siiss . I:-- Cg; 345. 1928 . "'Fiduciary' includes a trustee under any trust, expressed, im- pli ed, resu lting or constru ctive, e xecutor, adminis trator, guardian , conservator, curator, receiver, trustee in bankruptcy, assignee for the benefit of creditors, partner, agent, officer of a corporation, public or private, public officer, or any other person acting in a fiduciary capacity for any person, trust, or estate. "'Person' includes a corporation, partnership, or other associa- ti on, or two or mo re per sons having a joint or common interest. "`Principal' includes any person to whom a fiduciary as such owes an obligation. "(2)A thing is done 'in good faith' within the meaning of this Act, when it is in fact done honestly, whether it be done negligently or not. " SEC. 2. APPLICATION OF PAYMENTS MADE TO FIDUCIARIES. -A per- son who in good faith pa ys or transfers to a fiduciary any mon ey or other prope rty which the fiduciary as such is authorized to receive, is not responsible for the proper application thereof by the fiduciary ; and any right or tit le acquired fro m the fiduciary in consideration of such payment or transfer is not invalid in conse- quence of 9 a misapplication by the fiduciary. "SEC . i3 . REGISTRATION OF TRANSFER OF SECURITIES HELD BY FI DUCI - ARIES .- If a fiduciary in wh ose n ame are re gis te red any shares of stock, bond s, or other secu rities of any co rporation, publi c or private, or com pany or other as sociatio n or of any trus t, trans fers the same, such corporation or company or other association, or any of the managers of the trust, or its or their transfer agent, is not bound to inquire whether the fiduciary is committing a breach of his obligation as fid uciary i n making the tra nsfer, o r to see to the performa nce of the fiduciary obligation, and is liable for registering such transfer only where registration of the transfer is made with actual knowledge that the fiduciary is committing a breach of his obligation as fiduci- ary in making the tran sfer, or with kn owledge of such facts th at the action in registering the transfer amounts to bad faith. " SEC. 4. TRANSFER OF NEGOTIABLE INSTRUMENT BY FIDUCIARY.-If any neg otiable instrume nt payab le or in dorsed t o a fidu ciary as such is indorsed by the fiduciary, or if any negotiable instrument pay- able or in dorsed to his principal is indor sed by a fi ducia ry em- powered to indorse such instrument on behalf of his principal, the endorse e is not bound t o inquir e whethe r the fi duciary is commi tting a breach of his obligation as fiduciary in indorsing or delivering the ins trument, and is not char geable w ith noti ce that the fidu ciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowl- edge of such facts that his action in taking the instrument amounts to bad faith. If, however, such instrument is transferred by the fiduciary in payment of or as security for a personal debt of the fiducia ry to th e actual knowled ge of th e credit or, or i s transf erred in any transaction known by the transferee to be for the personal benefit of the fiduciary, the creditor or other transferee is liable to the principal if the fiduciary in fact commits a breach of his obliga- tion as fiduciary in transferring the instrument. " SEC. 5. CHECK DRAWN BY FIDUCIARY PAYABLE TO THIRD PERSON .- If a check or other bill of exchange is drawn by a fiduciary as such, or in the name of his princ ipal by a fiduciary empowered to draw such ins trument in the n ame of hi s princi pal, the payee i s not bo und to inqui re wheth er the f iduciary is commi tting a breach o f his ob li- gation as fiduciary in drawing or delivering the instrument, and is no t charge able wit h notice that th e fiduci ary is c ommittin g a brea ch of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts

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