(a) In this chapter unless the context otherwise requires:
"bank" includes a person or association of persons, whether incorporated or not, carrying on the business of banking;
"fiduciary" includes a trustee under a trust, express, implied, resulting or constructive, executor, administrator, 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 other person acting in a fiduciary capacity for a person, trust, or estate;
"person" includes a corporation, partnership, or other association, or two or more persons having a joint or common interest;
"principal" includes a person to whom a fiduciary as such owes an obligation.
(b) A thing is done "in good faith" within the meaning of this chapter, when it is in fact done honestly, whether negligently or not.
(Sept. 14, 1965, 79 Stat. 776, Pub. L. 89-183, § 1.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 21-1701.
1973 Ed., § 21-1701.
Uniform Law
This section is based upon § 1 of the Uniform Fiduciaries Act. See Volume 7A, Part I Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.
A person who in good faith pays or transfers to a fiduciary money or other property which the fiduciary as such is authorized to receive, is not responsible for the proper application thereof by the fiduciary; and any right or title acquired from the fiduciary in consideration of the payment or transfer is not invalid in consequence of a misapplication by the fiduciary.
(Sept. 14, 1965, 79 Stat. 776, Pub. L. 89-183, § 1.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 21-1702.
1973 Ed., § 21-1702.
Uniform Law
This section is based upon § 2 of the Uniform Fiduciaries Act. See Volume 7A, Part I Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.
If a negotiable instrument payable or indorsed to a fiduciary as such is indorsed by the fiduciary, or if a negotiable instrument payable or indorsed to his principal is indorsed by a fiduciary empowered to indorse the instrument on behalf of his principal, the indorsee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in indorsing or delivering the instrument, and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of the breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith. If, however, the instrument is transferred by the fiduciary in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor, or is transferred in a transaction known by the transferee to be for the personal benefit of the fiduciary, the creditor or other transferee is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in transferring the instrument.
(Sept. 14, 1965, 79 Stat. 776, Pub. L. 89-183, § 1.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 21-1703.
1973 Ed., § 21-1703.
Uniform Law
This section is based upon § 4 of the Uniform Fiduciaries Act. See Volume 7A, Part I Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.
If a check or other bill of exchange is drawn by a fiduciary as such, or in the name of his principal by a fiduciary empowered to draw such an instrument in the name of his principal, the payee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in drawing or delivering the instrument, and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of the breach or with knowledge of facts that his action in taking the instrument amounts to bad faith. Where, however, the instrument is payable to a personal creditor of the fiduciary and delivered to the creditor in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor, or is drawn and delivered in a transaction known by the payee to be for the personal benefit of the fiduciary, the creditor or other payee is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the instrument.
(Sept. 14, 1965, 79 Stat. 777, Pub. L. 89-183, § 1.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 21-1704.
1973 Ed., § 21-1704.
Uniform Law
This section is based upon § 5 of the Uniform Fiduciaries Act. See Volume 7A, Part I Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.
If a check or other bill of exchange is drawn by a fiduciary as such or in the name of his principal by a fiduciary empowered to draw such an instrument in the name of his principal, payable to the fiduciary personally, or payable to a third person and by him transferred to the fiduciary, and is thereafter transferred by the fiduciary, whether in payment of a personal debt of the fiduciary or otherwise, the transferee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in transferring the instrument, and is not chargeable with notice that the fiduciary is committing a breach of his obligations as fiduciary unless he takes the instrument with actual knowledge of the breach or with knowledge of facts that his action in taking the instrument amounts to bad faith.
(Sept. 14, 1965, 79 Stat. 777, Pub. L. 89-183, § 1.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 21-1705.
1973 Ed., § 21-1705.
Uniform Law
This section is based upon § 6 of the Uniform Fiduciaries Act. See Volume 7A, Part I Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.
If a deposit is made in a bank to the credit of a fiduciary as such, the bank 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 the deposit is entered, without being liable to the principal, unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in drawing the check or with knowledge of facts that its action in paying the check amounts to bad faith. If, however, the check is payable to the drawee bank and is delivered to it in payment of or as security for a personal debt of the fiduciary to it, the bank is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the check.
(Sept. 14, 1965, 79 Stat. 777, Pub. L. 89-183, § 1.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 21-1706.
1973 Ed., § 21-1706.
Uniform Law
This section is based upon § 7 of the Uniform Fiduciaries Act. See Volume 7A, Part I Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.
If a check is drawn upon a bank account of his principal by a fiduciary who is empowered to draw checks upon his principal's account, the bank is authorized to pay the checks without being liable to the principal, unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in drawing the check, or with knowledge of facts that its action in paying the check amounts to bad faith. If, however, the check is payable to the drawee bank and is delivered to it in payment of or as security for a personal debt of the fiduciary to it, the bank is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the check.
(Sept. 14, 1965, 79 Stat. 777, Pub. L. 89-183, § 1.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 21-1707.
1973 Ed., § 21-1707.
Uniform Law
This section is based upon § 8 of the Uniform Fiduciaries Act. See Volume 7A, Part I Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.
When a fiduciary deposits in a bank to his personal credit checks:
(1) drawn by him upon an account in his own name as fiduciary; or
(2) payable to him as fiduciary; or
(3) drawn by him upon an account in the name of his principal if he is empowered to draw checks thereon; or
(4) payable to his principal and indorsed by him, if he is empowered to indorse such checks --
or if he otherwise deposits funds held by him as fiduciary, the bank has notice of the breach of fiduciary duty if the instrument is deposited to an account other than an account of the fiduciary, as such, or an account of the represented person.
(Sept. 14, 1965, 79 Stat. 778, Pub. L. 89-183, § 1; March 21, 1995, D.C. Law 10-249, § 3, 42 DCR 467; Apr. 9, 1997, D.C. Law 11-255, § 20(d), 44 DCR 1271.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 21-1708.
1973 Ed., § 21-1708.
Legislative History of Laws
Law 10-249, the "Uniform Commercial Code-Negotiable Instruments Act of 1994," was introduced in Council and assigned Bill No. 10-240, which was referred to the Committee on Consumer and Regulatory Affairs. The Bill was adopted on first and second readings on November 1, 1994, and December 6, 1994, respectively. Signed by the Mayor on January 18, 1995, it was assigned Act No. 10-396 and transmitted to both Houses of Congress for its review. D.C. Law 10- 249 became effective on March 23, 1995.
Law 11-255, the "Second Technical Amendments Act of 1996," was introduced in Council and assigned Bill No. 11-905, which was referred to the Committee of the Whole. The Bill was adopted on first and second readings on November 7, 1996, and December 3, 1996, respectively. Signed by the Mayor on December 24, 1996, it was assigned Act No. 11-519 and transmitted to both Houses of Congress for its review. D.C. Law 11-255 became effective on April 9, 1997.
Uniform Law
This section is based upon § 9 of the Uniform Fiduciaries Act. See Volume 7A, Part I Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.
When a deposit is made in a bank in the name of two or more persons as trustees and a check is drawn upon the trust account by any trustee authorized by the others to draw checks upon the trust account, neither the payee nor other holder nor the bank is bound to inquire whether it is a breach of trust to authorize the trustee to draw checks upon the trust account, and is not liable unless the circumstances be such that the action of the payee or other holder or the bank amounts to bad faith.
(Sept. 14, 1965, 79 Stat. 778, Pub. L. 89-183, § 1.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 21-1709.
1973 Ed., § 21-1709.
Uniform Law
This section is based upon § 10 of the Uniform Fiduciaries Act. See Volume 7A, Part I Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.
This chapter does not apply to transactions that took place prior to May 14, 1928.
(Sept. 14, 1965, 79 Stat. 778, Pub. L. 89-183, § 1.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 21-1710.
1973 Ed., § 21-1710.
Uniform Law
This section is based upon § 11 of the Uniform Fiduciaries Act. See Volume 7A, Part I Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.
In a case not provided for by this chapter the rules of law and equity, including the law merchant and those rules of law and equity relating to trusts, agency, negotiable instruments, and banking, continue to apply.
(Sept. 14, 1965, 79 Stat. 778, Pub. L. 89-183, § 1.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 21-1711.
1973 Ed., § 21-1711.
Uniform Law
This section is based upon § 12 of the Uniform Fiduciaries Act. See Volume 7A, Part I Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.
This subchapter may be cited as the "Uniform Fiduciaries Act".
(Sept. 14, 1965, 79 Stat. 778, Pub. L. 89-183, § 1; June 16, 1989, D.C. Law 8-9, § 2(c), 36 DCR 3361.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 21-1712.
1973 Ed., § 21-1712.
Legislative History of Laws
For legislative history of D.C. Law 8-9, see Historical and Statutory Notes following § 21-1721.
Uniform Law
This section is based upon § 14 of the Uniform Fiduciaries Act. See Volume 7A, Part I Uniform Laws Annotated, Master Edition, or ULA Database on WESTLAW.
Refs & Annos
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Jurisdiction
|
Laws
|
Effective Date
|
Statutory Citation
|
|
Alabama
|
1943, p. 544
|
7-7-1943
|
Code 1975, §§ 19-1-1 to 19-1-13.
|
|
Arizona
|
1951, c. 139
|
3-29-1951
|
A.R.S. §§ 14-7501 to 14-7512.
|
|
Colorado
|
1923, c. 65
|
4-16-1923
|
West's C.R.S.A. §§ 15-1-101 to 15-1-113.
|
|
District of Columbia
|
1928, 45 Stat. 509
|
5-14-1928
|
D.C. Official Code, 2001 Ed. §§ 21-1701 to 21-1712.
|
|
Hawaii
|
1945, c. 197
|
5-17-1945
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HRS §§ 556-1 to 556-10.
|
|
Idaho
|
1925, c. 217
|
3-17-1925
|
I.C. §§ 68-301 to 68-315.
|
|
Illinois
|
1931, p. 676
|
7-7-1931
|
S.H.A. 760 ILCS 65/1 to 65/12.
|
|
Indiana
|
1927, c. 17
|
5-16-1927
|
West's A.I.C. 30-2-4-1 to 30-2-4-14.
|
|
Louisiana
|
1924, No. 226
|
1-1-1925
|
LSA-R.S. 9:3801 to 9:3814.
|
|
Maryland
|
1929, c. 572
|
4-11-1929
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Code, Estates and Trusts, §§ 15-201 to 15-211.
|
|
Minnesota
|
1945, c. 202
|
3-31-1945
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M.S.A. §§ 520.01 to 520.13.
|
|
Missouri
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2004, H.B. No. 1511
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1-1-2005
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V.A.M.S. §§ 469.240 to 469.350.
|
|
Nevada
|
1923, c. 44
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3-1-1923
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N.R.S. 162.010 to 162.140.
|
|
New Jersey
|
1927, c. 30
|
7-4-1927
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N.J.S.A. 3B:14-52 to 3B:14-61.
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|
New Mexico
|
1923, c. 26
|
NMSA 1978, §§ 46-1-1 to 46-1-11.
|
|
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New York
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1948, c. 866
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4-6-1948
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McKinney's General Business Law §§ 359-i, 359-l.
|
|
North Carolina
|
1923, c. 85
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2-27-1923
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G.S. §§ 32-1 to 32-13.
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|
Ohio
|
2006, H.B. 416
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1-1-2007
|
R.C. §§ 5815.01 to 5815.11.
|
|
Pennsylvania
|
L.1923
|
5-31-1923
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7 P.S. §§ 6351 to 6404.
|
|
Rhode Island
|
1961, c. 147
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1-2-1962
|
Gen.Laws 1956, §§ 18-4-15 to 18-4-21.
|
|
South Dakota
|
1943, c. 19
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2-6-1943
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SDCL 55-7-2 to 55-7-15.
|
|
Tennessee
|
1953, c. 82
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4-6-1953
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T.C.A. §§ 35-2-101 to 35-2-112.
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|
Utah
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1925, c. 86
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5-12-1925
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U.C.A.1953, 22-1-1 to 22-1-11.
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|
Virgin Islands
|
1957, Act No. 160
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9-1-1957
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15 V.I.C. §§ 1041 to 1053.
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|
Wisconsin
|
1925, c. 227
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6-1-1925
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W.S.A. 112.01(1 to 16).
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Wyoming
|
1929, c. 90
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2-21-1929
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Wyo.Stat.Ann. §§ 2-3-201 to 2-3-211.
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