                                 CODE OF VIRGINIA

BANK NEED NOT INQUIRE AS TO FIDUCIARY FUNDS DEPOSITED IN FIDUCIARY&#8217;S
PERSONAL ACCOUNT (§ 6.2-897)

If any fiduciary or agent 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
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 endorsed by him
as fiduciary, the bank 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
bank 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 check amounts to
bad faith.

HISTORY: Code 1950, § 6-57; 1966, c. 584, § 6.1-75; 2010, c. 794.