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[Utah Code Table of Contents]
[TITLE 22. Table of Contents]
22-1-1 Definitions.
In this chapter unless the context or subject matter otherwise requires:
"Fiduciary" includes a trustee under any trust, expressed, implied, resulting or constructive, executor, administrator, guardian, conservator, curator, receiver, trustee in bankruptcy, assignee for the benefit of creditors, partner, agent, officer of a corporation, public or private, public officer, and any other person acting in a fiduciary capacity for any person, trust or estate.
"Principal" includes any person to whom a fiduciary as such owes an obligation.
A thing is done "in good faith" when it is in fact done
honestly, whether it is done negligently or not.
1953
22-1-2 Payments made to fiduciaries.
A person who in good faith pays or transfers to a fiduciary
any money or other property which the fiduciary as such is
authorized to receive is not responsible for the proper application
thereof by the fiduciary; and no right or title acquired
from the fiduciary in consideration of such payment or transfer
is invalid in consequence of a misapplication by the fiduciary.
1953
22-1-4 Transfer of negotiable instruments by fiduciaries.
If any negotiable instrument payable or indorsed to a
fiduciary as such is endorsed by the fiduciary, or if any
negotiable instrument payable or endorsed to his principal
is endorsed by a fiduciary empowered to endorse such instrument
on behalf of his principal, the indorsee is not bound to
inquire whether the fiduciary is committing a breach of his
obligation as fiduciary in endorsing or delivering the instrument,
and is not chargeable with notice that the fiduciary is committing
a breach of his obligation as fiduciary, unless he takes
the instrument with actual knowledge of such breach or with
knowledge of such facts that his action in taking the instrument
amounts to bad faith. If, however, such instrument is transferred
by the fiduciary in payment of, or as security for, a personal
debt of the fiduciary to the actual knowledge of the creditor,
or is transferred in any transaction known by the transferee
to be for the personal benefit of the fiduciary, the creditor
or other transferee is liable to the principal, if the fiduciary
in fact commits a breach of his obligation as fiduciary in
transferring the instrument.
1953
22-1-5 Checks - Drawn by fiduciaries, payable to third persons.
If a check or other bill of exchange is drawn by a fiduciary
as such, or in the name of his principal by a fiduciary empowered
to draw such instrument in the name of his principal, the
payee is not bound to inquire whether the fiduciary is committing
a breach of his obligation as fiduciary in drawing or delivering
the instrument, and is not chargeable with notice that the
fiduciary is committing a breach of his obligation as fiduciary,
unless he takes the instrument with actual knowledge of such
breach or with knowledge of such facts that his action in
taking the instrument amounts to bad faith. If, however,
such instrument is payable to a personal creditor of the
fiduciary and delivered to the creditor in payment of, or
as security for, a personal debt of the fiduciary to the
actual knowledge of the creditor, or is drawn and delivered
in any transaction known by the payee to be for the personal
benefit of the fiduciary, the creditor or other payee is
liable to the principal, if the fiduciary in fact commits
a breach of his obligation as fiduciary in drawing or delivering
the instrument.
1953
22-1-6 Checks drawn by or payable to fiduciary.
If a check or other bill of exchange is drawn by a fiduciary
as such, or in the name of his principal by a fiduciary empowered
to draw such instrument in the name of his principal, payable
to the fiduciary personally, or payable to a third person
and by him transferred to the fiduciary, and is thereafter
transferred by the fiduciary, whether in payment of a personal
debt of the fiduciary or otherwise, the transferee is not
bound to inquire whether the fiduciary is committing a breach
of his obligation as fiduciary in transferring the instrument,
and is not chargeable with notice that the fiduciary is committing
a breach of his obligation as fiduciary, unless he takes
the instrument with actual knowledge of such breach or with
knowledge of such facts that his action in taking the instrument
amounts to bad faith.
1953
22-1-7 Bank deposits in name of fiduciary.
If a deposit is made in a bank to the credit of a fiduciary
as such, the bank is authorized to pay the amount of the
deposit or any part thereof upon the check of the fiduciary,
signed with the name in which such deposit is entered, 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 such facts that its action in paying
the check amounts to bad faith. If, however, such 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.
1953
22-1-8 Checks drawn in name of principal.
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
such 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 such check, or with knowledge of such facts that
its action in paying the check amounts to bad faith. If,
however, such 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.
1953
22-1-9 Deposits in fiduciary's personal account.
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 indorsed by him,
if he is empowered to indorse 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.
1953
22-1-10 Deposits in name of several trustees.
When a deposit is made in a bank in the name of two or
more persons as trustees and a check is drawn upon the trust
account by any trustee or trustees authorized by the other
trustee or trustees to draw checks upon the trust account,
neither the payee nor other holder nor the bank is bound
to inquire whether it is a breach of trust to authorize such
trustee or trustees to draw checks upon the trust account,
and is not liable, unless the circumstances are such that
the action of the payee or other holder or the bank amounts
to bad faith.
1953
22-1-11 Transactions prior to May 12, 1925, excepted.
The provisions of this chapter shall not apply to transactions
taking place prior to May 12, 1925.
1953
