(760 ILCS 65/7) (from Ch. 17, par. 2007)
Sec. 7.
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 the actual knowledge that the fiduciary is committing a
breach of his 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 his obligation as fiduciary in drawing or
delivering the check.
(Source: Laws 1931, p. 676.)
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