§ 6.2-1177 Savings institution need not inquire as to fiduciary funds deposited in fiduciary’s personal account
If any fiduciary or agent makes a deposit in a savings institution to his personal credit of checks drawn by him upon an account in his own name as fiduciary, or of checks drawn by him upon an account in the name of his principal, if he is empowered to draw checks thereto, or of checks payable to his principal and endorsed by him as fiduciary, the institution receiving the deposit:
1. Shall not be required to inquire whether the fiduciary is committing thereby a breach of his obligation as fiduciary; and
2. Is authorized to pay the amount of the deposit or any part thereof upon the withdrawal by the fiduciary without being liable to the principal, unless the institution receives the deposit or pays the withdrawal with (i) actual knowledge that the fiduciary, in making such deposit or in making such withdrawal, is committing a breach of his obligation as fiduciary or (ii) knowledge of such facts that its action in receiving the deposit or paying the withdrawal amounts to bad faith.
History
This law was first created in 1980. The record of its establishment is cataloged in chapter 329 of that year’s edition of “Acts of Assembly,” the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1980 “Acts” aren’t available online. It has been modified 2 times. Those modifications are cataloged by “The Acts of Assembly,” a state publication, by year and chapter. Those modifications that can be read on the General Assembly’s website will be linked accordingly. Those modifications are as follows: in 1985, chapter 425; in 2010, chapter 794.
1980, c. 329, § 6.1-195.27:1; 1985, c. 425, § 6.1-194.60; 2010, c. 794.