55-7-9. Deposit in bank to fiduciary's personal account--Bank's liability to principal.
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 thereon, or of checks payable to his principal and endorsed by him, if he is empowered to endorse 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 thereby a breach of his obligation as fiduciary; 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: SL 1943, ch 19, §9; SDC Supp 1960, §6.0709.
Structure South Dakota Codified Laws
Title 55 - Fiduciaries and Trusts
Chapter 07 - Third Party Responsibility For Fiduciary Acts
Section 55-7-1 - Liability of third persons dealing with trustees.
Section 55-7-2 - Definition of terms.
Section 55-7-3 - A thing done "in good faith" defined.
Section 55-7-9 - Deposit in bank to fiduciary's personal account--Bank's liability to principal.
Section 55-7-10 - Deposit in bank in names of two or more trustees--Check drawn by one.
Section 55-7-12 - Law governing transactions not within Uniform Fiduciaries Act.
Section 55-7-13 - Act not retroactive.