§ 2-3-204 — Liability of bank; payment of checks signed by fiduciary

If a deposit is made in a bank to the credit of a fiduciary as
such, the bank is authorized to pay the amount of the deposit or
any part thereof upon the check of the fiduciary, signed with
the name in which such deposit is entered, 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 the check or with knowledge
that its action in paying the check amounts to bad faith. If 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.