§ 15-1-110 — Check drawn upon account of principal by fiduciary

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.

Legislative History

Source: L. 23: p. 176, � 8. CSA: C. 67, � 8. CRS 53: � 57-1-8. C.R.S. 1963: � 57-1-7.