§ 30-2-4-9 — 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 payable 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 obligation 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.
Formerly: Acts 1927, c.17, s.9.