6.2-1177 - (Effective October 1, 2010) Savings institution need not inquire as to fiduciary funds deposited in fiduciary's personal account.
§ 6.2-1177. (Effective October 1, 2010) Savings institution need not inquireas to fiduciary funds deposited in fiduciary's personal account.
If any fiduciary or agent makes a deposit in a savings institution to hispersonal credit of checks drawn by him upon an account in his own name asfiduciary, or of checks drawn by him upon an account in the name of hisprincipal, if he is empowered to draw checks thereto, or of checks payable tohis principal and endorsed by him as fiduciary, the institution receiving thedeposit:
1. Shall not be required to inquire whether the fiduciary is committingthereby a breach of his obligation as fiduciary; and
2. Is authorized to pay the amount of the deposit or any part thereof uponthe withdrawal by the fiduciary without being liable to the principal, unlessthe institution receives the deposit or pays the withdrawal with (i) actualknowledge that the fiduciary, in making such deposit or in making suchwithdrawal, is committing a breach of his obligation as fiduciary or (ii)knowledge of such facts that its action in receiving the deposit or payingthe withdrawal amounts to bad faith.
(1972, c. 796, § 6.1-195.27:1; 1980, c. 329; 1985, c. 425, § 6.1-194.60;2010, c. 794.)