3B:14-57 - Checks drawn by fiduciary upon principal's account - New Jersey Statutes

3B:14-57.  Checks drawn by fiduciary upon principal's account    If a check is drawn upon the account of his principal in a bank by a fiduciary who is empowered to draw checks upon his principal's account, the bank is authorized to pay the check 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 facts that its action in paying the check amounts to bad faith.  If, however, 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.

     L.1981, c. 405, s. 3B:14-57, eff. May 1, 1982.