Rhode Island § 18-4-18 § 18-4-18. Check drawn by fiduciary payable to third person.

Rhode Island Statutes

§ 18-4-18 — § 18-4-18. Check drawn by fiduciary payable to third person.

Rhode Island·Title 18 Fiduciaries·Ch. 18-4 Powers of Fiduciaries

§ 18-4-18. 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
            or her principal by a fiduciary empowered to draw the instrument in the name of his
            or her principal, the payee is not bound to inquire whether the fiduciary is committing
            a breach of his or her obligation as fiduciary in drawing or delivering the instrument,
            and is not chargeable with notice that the fiduciary is committing a breach of his
            or her obligation as fiduciary, unless he or she takes the instrument with actual
            knowledge of the breach, or with knowledge of any facts that his or her action in
     

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§ 18-4-18. 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 or her principal by a fiduciary empowered to draw the instrument in the name of his or her principal, the payee is not bound to inquire whether the fiduciary is committing a breach of his or her obligation as fiduciary in drawing or delivering the instrument, and is not chargeable with notice that the fiduciary is committing a breach of his or her obligation as fiduciary, unless he or she takes the instrument with actual knowledge of the breach, or with knowledge of any facts that his or her 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, or is drawn and delivered in any transaction known by the payee to be 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 or her obligation as fiduciary in drawing or delivering the instrument.

Rhode Island § 18-4-18 (§ 18-4-18. Check drawn by fiduciary payable to third person.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.