§ 18-4-20 - Deposit in name of fiduciary. - Rhode Island Statutes

SECTION 18-4-20

   § 18-4-20  Deposit in name of fiduciary.– If a deposit is made in a bank to the credit of a fiduciary, the bank isauthorized to pay the amount of the deposit or any part of it upon the check ofthe fiduciary, signed with the name in which the deposit is entered, withoutbeing liable to the principal, unless the bank pays the check with actualknowledge that the fiduciary is committing a breach of his or her obligation asfiduciary in drawing the check, or with knowledge of any facts that its actionin paying the check amounts to bad faith. If, however, a check is payable tothe drawee bank and is delivered to it in payment of or as security for apersonal debt of the fiduciary to it, the bank is liable to the principal ifthe fiduciary in fact commits a breach of his or her obligation as fiduciary indrawing or delivering the check.