§ 6.2-897 — Bank need not inquire as to fiduciary funds deposited in fiduciary's personal account

Virginia § 6.2-897

• Jurisdiction: Virginia
• Title 6.2: FINANCIAL INSTITUTIONS AND SERVICES
• Subtitle II: DEPOSITORY INSTITUTIONS AND TRUST ORGANIZATIONS
• Ch. 8: BANKS
• Art. 11: DEPOSIT ACCOUNTS

Text

If any fiduciary or agent 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 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 endorsed by him as fiduciary, the bank receiving the deposit:

1. Shall not be required to inquire whether the fiduciary is committing thereby a breach of his obligation as fiduciary; and

2. Is authorized to pay the amount of the deposit or any part thereof upon the withdrawal by the fiduciary without being liable to the principal, unless the bank receives the deposit or pays the withdrawal with (i) actual knowledge that the fiduciary, in making such deposit or in making such withdrawal, is committing a breach of his obligation as fiduciary or (ii) knowledge of such facts that its action in receiving the deposit or paying the check amounts to bad faith.

Legislative History

Code 1950, § 6-57; 1966, c. 584, § 6.1-75; 2010, c. 794.