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:

Terms Used In Virginia Code 6.2-1177

  • Account: means any account with a savings institution and includes a checking, time, interest, or savings account. See Virginia Code 6.2-1100
  • Fiduciary: A trustee, executor, or administrator.
  • 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.
  • Savings institution: means a savings and loan association, a building and loan association, or savings bank, whether organized as a capital stock corporation or a nonstock corporation, that is authorized by law to accept deposits and to hold itself out to the public as engaged in the savings institution business. See Virginia Code 6.2-1100

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.

1980, c. 329, § 6.1-195.27:1; 1985, c. 425, § 6.1-194.60; 2010, c. 794.

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