Tennessee Code 35-2-109 – Deposit in fiduciary’s personal account – Drawing checks
Terms Used In Tennessee Code 35-2-109
- Bank: includes any person or association of persons, whether incorporated or not, carrying on the business of banking. See Tennessee Code 35-2-102
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: includes a trustee under any trust, expressed, implied, resulting or constructive, executor, administrator, personal representative, guardian, conservator, curator, receiver, trustee in bankruptcy, assignee for the benefit of creditors, partner, agent, officer of a corporation, public or private, public officer, or any other person acting in a fiduciary capacity for any person, trust or estate. See Tennessee Code 35-2-102
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Principal: includes any person to whom a fiduciary as such owes an obligation. See Tennessee Code 35-2-102
- Savings institution: includes a federal or state savings and loan association or savings bank. See Tennessee Code 35-2-102
If a fiduciary makes a deposit in a bank or savings institution to the fiduciary‘s personal credit of checks drawn by the fiduciary upon an account in the fiduciary’s own name as fiduciary, or of checks payable to the fiduciary as fiduciary, or of checks drawn by the fiduciary upon an account in the name of the principal if the fiduciary is empowered to draw checks thereon, or of checks payable to the principal and endorsed by the fiduciary, if the fiduciary is empowered to endorse such checks, or if the fiduciary otherwise makes a deposit of funds held by the fiduciary as fiduciary, the bank or savings institution receiving such deposit is not bound to inquire whether the fiduciary is committing thereby a breach of the obligation as fiduciary. The bank or savings institution 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 or savings institution receives the deposit or pays the check with actual knowledge that the fiduciary is committing a breach of the 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.