236                                          LAWS OF MARYLAND                           [Ch. 11

PROPER APPLICATION OF IT BY THE FIDUCIARY; AND ANY RIGHT
OR TITLE ACQUIRED FROM THE FIDUCIARY IN CONSIDERATION OF
PAYMENT OR TRANSFER IS NOT INVALID IN CONSEQUENCE OF A
MISAPPLICATION BY THE FIDUCIARY.

15-203. TRANSFER OF NEGOTIABLE INSTRUMENT BY FIDUCIARY,

IF ANY NEGOTIABLE INSTRUMENT PAYABLE OR INDORSED TO A
FIDUCIARY IS INDORSED BY THE FIDUCIARY, OR IF ANY
NEGOTIABLE INSTRUMENT PAYABLE OR INDORSED TO HIS
PRINCIPAL IS INDORSED BY A FIDUCIARY EMPOWERED TO INDORSE
THE INSTRUMENT ON BEHALF OF HIS PRINCIPAL, THE INDORSEE
IS NOT BOUND TO INQUIRE WHETHER THE FIDUCIARY IS
COMMITTING A BREACH OF HIS OBLIGATION AS FIDUCIARY IN
INDORSING 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 THE FACTS THAT HIS ACTION IN TAKING THE
INSTRUMENT AMOUNTS TO BAD FAITH. IF, HOWEVER, THE
INSTRUMENT IS TRANSFERRED BY THE FIDUCIARY IN PAYMENT OF
OR AS SECURITY FOR A PERSONAL DEBT OF THE FIDUCIARY TO
THE ACTUAL KNOWLEDGE OF THE CREDITOR, OR IS TRANSFERRED
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 OBLIGATION AS FIDUCIARY IN
TRANSFERRING THE INSTRUMENT.

15-204. CHECK DRAWN BY FIDUCIARY PAYABLE TO THIRD
PERSON.

IF A CHECK OR OTHER BILL OF EXCHANGE IS DRAWN BY A
FIDUCIARY 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 THE FACTS THAT HIS ACTION IN
TAKING THE INSTRUMENT AMOUNTS TO BAD FAITH. IF,
HOWEVER, THE INSTRUMENT IS PAYABLE TO A PERSONAL CREDITOR
OF THE FIDUCIARY AND DELIVERED TO THE CREDITOR IN PAYMENT
OF OR AS SECURITY FOR A PERSONAL DEBT OF THE FIDUCIARY TO
THE ACTUAL KNOWLEDGE OF THE CREDITOR, FOR THE PERSONAL
BENEFIT OF THE FIDUCIARY, THE CREDITOR OR OTHER PAYEE IS
LIABLE TO THE PRINCIPAL IF THE FIDUCIARY IN FACT COMMITS
A BREACH OF HIS OBLIGATION AS FIDUCIARY IN DRAWING OR
DELIVERING THE INSTRUMENT.

15-205. CHECK DRAWN BY AND PAYABLE TO FIDUCIARY.