§ 18-4-21. Deposit in fiduciary’s personal account.
If a fiduciary makes a deposit in a bank to his or her personal credit of checks drawn by him or her upon an account in his or her own name as fiduciary, or of checks payable to him or her as fiduciary, or of checks drawn by him or her upon an account in the name of his or her principal if he or she is empowered to draw checks on that account, or of checks payable to his or her principal and indorsed by him or her, if he or she is empowered to indorse these checks, or if he or she otherwise makes a deposit of funds held by him or her as fiduciary, the bank receiving the deposit is not bound to inquire whether the fiduciary is committing a breach of his or her obligation as fiduciary; and the bank is authorized to pay the amount of the deposit or any part of it 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 or her obligation as fiduciary in making the deposit or in drawing the check, or with knowledge of any facts that its action in receiving the deposit or paying the check amounts to bad faith.
History of Section.
P.L. 1960, ch. 147, § 3; G.L. 1956, § 18-4-22; P.L. 1969, ch. 43, § 1; G.L. 1956,
§ 18-4-21.