(1) DEFINITIONS. In this section unless the context or subject matter otherwise requires: (a) “Bank” includes any person or association of persons, whether incorporated or not, carrying on the business of banking. (b) “Fiduciary” includes a trustee under any trust, expressed, implied, resulting, or constructive, personal representative, guardian, conservator, curator, receiver, trustee in bankruptcy, assignee for the benefit of creditors, prime contractor or subcontractor who is a trustee under ch. 779, 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. (c) A thing is done “in good faith” within the meaning of this section, when it is in fact done honestly, whether it be done negligently or not. (d) “Person” includes a corporation, limited liability company, partnership, or other association or 2 or more persons having a joint or common interest. (e) “Principal” includes any person to whom a fiduciary as such owes an obligation. (3) APPLICATION OF PAYMENTS MADE TO FIDUCIARIES. A person who in good faith pays or transfers to a fiduciary any 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 such payment or transfer is not invalid in consequence of a misapplication by the fiduciary. (5) TRANSFER OF NEGOTIABLE INSTRUMENT BY FIDUCIARY. If any negotiable instrument payable or endorsed to a fiduciary as such is endorsed by the fiduciary, or if any negotiable instrument payable or endorsed to a fiduciary’s principal is endorsed by a fiduciary empowered to endorse such instrument on behalf of his or her principal, the endorsee is not bound to inquire whether the fiduciary is committing a breach of the fiduciary’s obligation as fiduciary in endorsing or delivering the instrument, and is not chargeable with notice that the fiduciary is committing a breach of the fiduciary’s obligation as fiduciary, unless the endorsee takes the instrument with actual knowledge of such breach or with knowledge of such facts that the endorsee’s action in taking the instrument amounts to bad faith. If, however, such 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 any 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 the fiduciary’s obligation as fiduciary in transferring the instrument. (6) CHECK DRAWN BY FIDUCIARY PAYABLE TO 3RD PERSON. If a check or other bill of exchange is drawn by a fiduciary as such, or in the name of a fiduciary’s principal by a fiduciary empowered to draw such instrument in the name of his or her principal, the payee is not bound to inquire whether the fiduciary is committing a breach of the fiduciary’s obligation as fiduciary in drawing or delivering the instrument, and is not chargeable with notice that the fiduciary is committing a breach of the fiduciary’s obligation as fiduciary unless the payee takes the instrument with actual knowledge of such breach, or with knowledge of such facts that the payee’s action in taking the instrument amounts to bad faith. If, however, such 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 any 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 the fiduciary’s obligation as fiduciary in drawing or delivering the instrument. (7) CHECK DRAWN BY AND PAYABLE TO FIDUCIARY. If a check or other bill of exchange is drawn by a fiduciary as such, or in the name of a fiduciary’s principal by a fiduciary empowered to draw such instrument in the name of his or her principal, payable to the fiduciary personally, or payable to a 3rd person, and transferred by the 3rd person 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 the fiduciary’s obligation as fiduciary in transferring the instrument, and is not chargeable with notice that the fiduciary is committing a breach of the fiduciary’s obligation as fiduciary, unless the transferee takes the instrument with actual knowledge of such breach, or with knowledge of such facts that the transferee’s action in taking the instrument amounts to bad faith. (8) DEPOSIT IN NAME OF FIDUCIARY AS SUCH. 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 such 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 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, 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 the fiduciary’s obligation as fiduciary in drawing or delivering the check. (9) DEPOSIT IN NAME OF PRINCIPAL. If a check is drawn upon the account of a fiduciary’s principal in a bank by a fiduciary, who is empowered to draw checks upon his or her principal’s account, the bank is authorized to pay such check without being liable to the principal, unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of the fiduciary’s obligation as fiduciary in drawing such 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 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 the fiduciary’s obligation as fiduciary in drawing or delivering the check. (10) DEPOSIT IN FIDUCIARY’S PERSONAL ACCOUNT. If a fiduciary makes a deposit in a bank to the fiduciary’s personal credit of checks drawn by the fiduciary upon an account in his or her 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 his or her principal if the fiduciary is empowered to draw checks thereon, or of checks payable to his or her 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 receiving such deposit is not bound to inquire whether the fiduciary is committing thereby a breach of his or her obligation as fiduciary. The bank is authorized to pay the amount of the deposit or any part thereof upon the personal check of the fiduciary, including checks payable to the bank, without being liable to the principal, unless the bank receives the deposit or pays the check with actual knowledge that the fiduciary is committing a breach of his or her 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, and the bank paying the check is not bound to inquire whether the fiduciary is committing thereby a breach of his or her obligation as fiduciary. (11) DEPOSIT OR SAFE DEPOSIT BOX RENTAL IN NAME OF ESTATE OR TWO OR MORE FIDUCIARIES. When a deposit is made in a bank account or a safe deposit box or storage space rented, in the names of 2 or more persons as trustees or personal representatives, or in the name of an estate having 2 or more personal representatives, and a check is drawn upon the account, or access to the safe deposit box or storage space is sought by any one or more of the fiduciaries authorized by the other fiduciary or fiduciaries to draw checks upon the account, or to enter the safe deposit box or storage space, neither the payee nor the other holder nor the bank is bound to inquire whether it is a breach of trust to authorize the fiduciary or fiduciaries to draw checks upon the account, or to enter the safe deposit box or storage space, and is not liable unless the circumstances are such that the action of the payee or other holder or the bank amounts to bad faith. (12) NOT RETROACTIVE. The provisions of this section shall not apply to transactions taking place prior to June 4, 1925. (13) CASES NOT PROVIDED FOR IN SECTION. In any case not provided for in this section 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, shall continue to apply. (14) UNIFORMITY OF INTERPRETATION. This section shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it. (15) SHORT TITLE. This section may be cited as the “Uniform Fiduciaries Act”. (16) INCONSISTENT LAWS REPEALED. All acts or parts of acts inconsistent with this section are repealed.
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