Utah Code 75A-1-204. Transfer of negotiable instruments by a fiduciary
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(1) If a fiduciary endorses a negotiable instrument that is payable or endorsed to the fiduciary or the fiduciary’s principal, and the fiduciary has authority to endorse the negotiable instrument on behalf of the principal, the person that receives the negotiable instrument through the endorsement:
Terms Used In Utah Code 75A-1-204
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: means :(1)(a) a trustee under any trust, expressed, implied, resulting or constructive;(1)(b) an executor;(1)(c) an administrator;(1)(d) a guardian;(1)(e) a conservator;(1)(f) a curator;(1)(g) a receiver;(1)(h) a trustee in bankruptcy;(1)(i) an assignee for the benefit of creditors;(1)(j) a partner;(1)(k) an agent;(1)(l) an officer of a corporation, public or private;(1)(m) a public officer; or(1)(nn) any other person acting in a fiduciary capacity for any person, trust, or estate. See Utah Code 75A-1-201
- 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.
- Person: means :
(24)(a) an individual;(24)(b) an association;(24)(c) an institution;(24)(d) a corporation;(24)(e) a company;(24)(f) a trust;(24)(g) a limited liability company;(24)(h) a partnership;(24)(i) a political subdivision;(24)(j) a government office, department, division, bureau, or other body of government; and(24)(k) any other organization or entity. See Utah Code 68-3-12.5- Principal: means a person to whom a fiduciary owes an obligation. See Utah Code 75A-1-201
(1)(a) is not bound to inquire as to whether the fiduciary is committing a breach of the fiduciary’s obligation in endorsing or delivering the negotiable instrument; and(1)(b) is not required to provide notice that the fiduciary is committing a breach of the fiduciary’s obligation, unless the person:(1)(b)(i) takes the negotiable instrument with actual knowledge that the fiduciary is committing a breach of the fiduciary’s obligation; or(1)(b)(ii) knows that taking the negotiable instrument amounts to bad faith.(2) Notwithstanding Subsection (1), a person is liable to a principal if:(2)(a) the fiduciary transfers a negotiable instrument to the person and the person knows that the fiduciary is transferring the negotiable instrument:(2)(a)(i) as payment of, or as a security for, a personal debt of the fiduciary; or(2)(a)(ii) for the personal benefit of the fiduciary; and(2)(b) the fiduciary commits a breach of the fiduciary’s obligation in transferring the negotiable instrument to the person.