1638 ARTICLE 3YA

fiduciary or otherwise, the transferee is not bound to inquire whether the
fiduciary is committing a breach of his obligation as fiduciary in trans-
ferring the instrument, and is not chargeable with notice 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 knowledge
of such facts that his action in taking the instrument amounts to bad faith.

1929, ch. 572, sec. 7.

7. (Deposit in Name of Fiduciary as Such.) If a deposit is made in a
bank to the credit of a fiduciary as such, the bank is authorized to pay
the amount of the deposit or any part thereof upon the check of the fidu-
ciary, signed with the; name in which such deposit is entered, 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 the check or with knowledge of such facts that its
action in paying the check amounts to bad faith. If, however, 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 obliga-
tion as fiduciary in drawing or delivering the check.

1929, ch. 572, sec. 8.

8. (Deposit in Name of Principal.) If a check is drawn upon the
account of his principal in a bank by a fiduciary who is empowered to
draw checks upon his principal's account, the bank is authorized to 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, however, 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.

1929, ch. 572, sec. 9.

9. (Deposit in Fiduciary's Personal Account.) If a fiduciary makes
a deposit in a bank to his personal credit of checks drawn by him upon
an account in his own name as fiduciary, or of checks payable to him as
fiduciary, or of checks drawn by him upon an account in the name of his
principal if he is empowered to. draw checks thereon, or of checks pay-
able to his principal and indorsed by him, if he is empowered to indorse
such checks, or if he otherwise makes a deposit of funds held by him as
fiduciary, the bank receiving such deposit is not bound to inquire whether
the fiduciary is committing thereby a breach of his obligation as fiduciary;
and the bank is authorized to 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 obli-
gation as fiduciary in making such deposit or in drawing such check, or
with knowledge of such facts that its action in receiving the deposit or
paying the check amounts to bad faith.