§ 41-03-33 — (3-307) Notice of breach of fiduciary duty

In this section:
1. "Fiduciary" means an agent, trustee partner, corporate officer or director, or other
representative owing a fiduciary duty with respect to an instrument.
2. In the case of an instrument payable to the represented person of the fiduciary, as
such, the taker has notice of the breach of fiduciary duty if the instrument is taken in
payment of or as security for a debt known by the taker to be the personal debt of the
fiduciary, taken in a transaction known by the taker to be for the personal benefit of the
fiduciary, or deposited to an account other than an account of the fiduciary, as such or
an account of the represented person.
3. If an instrument is issued by the represented person or the fiduciary, as such, and
made payable to the fiduciary personally, the taker does not have notice of the breach
of fiduciary duty unless the taker knows of the breach of fiduciary duty.

4. If the instrument is issued by the represented person or the fiduciary, as such, to the
taker as payee, the taker has notice of the breach of fiduciary duty if the instrument is
taken in payment of or as security for a debt known by the taker to be the personal
debt of the fiduciary, taken in a transaction known by the taker to be for the personal
benefit of the fiduciary, or deposited to an account other than an account of the
fiduciary, as such, or an account of the represented person.