Page:United States Statutes at Large Volume 79.djvu/818

 778

PUBLIC LAW 89-183-SEPl. 14, 1965

[79 STAT.

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 the check, or with knowledge of facts that its action in paying the check amounts to bad faith. If, however, the 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 prmcipal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the check. § 21-1708. Deposit in fiduciary personal account When a fiduciary deposits in a bank to his personal credit checks: (1) drawn by him upon an account in his own name as fiduciary; or (2) payable to him as fiduciary; or (3) drawn by him upon an account in the name of his principal if he is empowered to draw checks thereon; or (4) payable to his principal and indorsed by him, if he is empowered to indorse such checks— or if he otherwise deposits funds held by him as fiduciary, the bank receiving the deposit is not bound to inc[uire whether the fiduciary is committing thereby a breach of his obligation as fiduciary, and may pay the amount of the deposit or any part thereof upon the personal check of the fiduciary without being liable to the principal, unless the bank receives the deposit or pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in making the deposit or in drawing the check, or with knowledge of facts that its action in receiving the deposit or paying the check amounts to bad faith. § 21-1709. Deposit in names of two or more trustees When a deposit is made in a bank in the name of two or more persons as trustees and a check is drawn upon the trust account by any trustee authorized by the others to draw checks upon the trust account, neither the payee nor other holder nor the bank is bound to inquire whether it is a breach of trust to authorize the trustee to draw checks upon the trust account, and is not liable unless the circumstances be such that the action of the payee or other holder or the bank amounts to bad faith. §21-1710. Law not retroactive This chapter does not apply to transactions that took place prior to May 14, 1928. § 21-1711. Cases not provided for by chapter I n a case not provided for by this chapter the rules of law and equity, including the law merchant and those rules of law and equity relating to trusts, agency, negotiable instruments, and banking, continue to apply. § 21-1712. Short title This chapter may be cited as the "Uniform Fiduciaries Act".

�