If a fiduciary 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 payable to him as fiduciary, or of checks drawn by him upon an account in the name of his principal if he is empowered to draw checks on that account, or of checks payable to his principal and indorsed by him, if he is empowered to indorse such checks or if he otherwise makes a deposit of funds held by him as fiduciary, the bank receiving such deposit is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary by that action; and the bank is authorized to pay the amount of the deposit or any part thereof upon the personal check of the fiduciary without being liable to the principal, unless the bank receives the deposit or pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in making such deposit or in drawing such check or with knowledge of such facts that its action in receiving the deposit or paying the check amounts to bad faith.
Source: L. 23: p. 177, § 9. CSA: C. 67, § 9. CRS 53: § 57-1-9. C.R.S. 1963: § 57-1-8.
Cross references: For deposits by a fiduciary, see part 5 of this article.
Structure Colorado Code
Title 15 - Probate, Trusts, and Fiduciaries
§ 15-1-102. Legislative Declaration
§ 15-1-104. Prior Transactions
§ 15-1-105. Application of Payments to Fiduciary
§ 15-1-106. Transfer of Negotiable Instruments by Fiduciary
§ 15-1-107. Check Drawn by Fiduciary Payable to Third Person, Effect
§ 15-1-108. Check Drawn by and Payable to Fiduciary, Effect
§ 15-1-109. Deposit in Name of Fiduciary
§ 15-1-110. Check Drawn Upon Account of Principal by Fiduciary
§ 15-1-111. Deposits in Personal Account of Fiduciary
§ 15-1-112. Deposits in Name of Two or More Trustees
§ 15-1-112.5. Liability of a Fiduciary for Acts of Predecessor Fiduciary