§ 32-7. Check drawn by and payable to fiduciary.
§32‑7. Check drawn by and payable to fiduciary.
If a check or other bill ofexchange is drawn by a fiduciary as such or in the name of his principal by afiduciary empowered to draw such instrument in the name of his principal,payable to the fiduciary personally, or payable to a third person and by himtransferred to the fiduciary, and is thereafter transferred by the fiduciary,whether in payment of a personal debt of the fiduciary or otherwise, thetransferee is not bound to inquire whether the fiduciary is committing a breachof his obligation as fiduciary in transferring the instrument, and is notchargeable with notice that the fiduciary is committing a breach of hisobligation as fiduciary unless he takes the instrument with actual knowledge ofsuch breach or with knowledge of such facts that his action in taking theinstrument amounts to bad faith. (1923, c. 85, s. 6; C.S., s.1864(j).)