If a deposit is made in a bank or savings institution to the credit of a fiduciary as such, the bank or savings institution 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 or savings institution pays the check with actual knowledge that the fiduciary is committing a breach of the fiduciary's 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 or savings institution and is delivered to it in payment of or as security for a personal debt of the fiduciary to it, the bank or savings institution is liable to the principal if the fiduciary in fact commits a breach of the obligation as fiduciary in drawing or delivering the check except as provided in § 35-2-106.
Tenn. Code Ann. § 35-2-107
Deposit in name of fiduciary as such — Drawing check
Known as the Uniform Fiduciaries Act
The act spans §§ 35–35 (12 sections).
Applied in 2 court decisions — leading case McLemore v. Regions Bank (2012)
Most recently applied in Notredan, LLC v. Old Republic Exchange Facilitator Co. (June 2012)
Acts 1953, ch. 82, § 7 (Williams, § 9596.24); T.C.A
Current official text: Tennessee Code (LexisNexis). Digitized from the UniCourt Code Improvement Commission public-domain capture. Reproduced from public-domain Tennessee statutes; confirm against the official source for the current text. Not legal advice.