§ 15-1-109 — Deposit in name of fiduciary

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 fiduciary, 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 obligation as fiduciary in drawing or delivering the
check.

Legislative History

Source: L. 23: p. 176, � 7. CSA: C. 67, � 7. CRS 53: � 57-1-7. C.R.S. 1963: � 57-1-6.