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 of such facts that its action in paying the check amounts to bad faith. If, however, such 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.
Structure Code of Alabama
Title 19 - Fiduciaries and Trusts.
Chapter 1 - Uniform Fiduciaries Act.
Section 19-1-3 - Application of Payments Made to Fiduciaries.
Section 19-1-4 - Transfer of Negotiable Instrument by Fiduciary.
Section 19-1-5 - Check Drawn by Fiduciary Payable to Third Person.
Section 19-1-6 - Check Drawn by and Payable to Fiduciary.
Section 19-1-7 - Deposit in Name of Fiduciary as Such.
Section 19-1-8 - Deposit in Name of Principal.
Section 19-1-9 - Deposit in Fiduciary's Personal Account.
Section 19-1-10 - Deposit in Names of Two or More Fiduciaries.
Section 19-1-11 - Chapter Not Retroactive.