Illinois Compiled Statutes
760 ILCS 65/6 (2026)
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 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 obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith
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(760 ILCS 65/6)
(from Ch. 17, par. 2006)
Sec. 6.
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
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
obligation as fiduciary unless he takes the instrument with actual
knowledge of such breach or with knowledge of such facts that his action in
taking the instrument amounts to bad faith.
(Source: Laws 1931, p. 676.)
Notes of Decisions
Cited in 1
case, 1995–1995 · leading case: Cnty. of MacOn v. Edgcomb, 654 N.E.2d 598 (Ill. App. Ct. 1995).
Cnty. of MacOn v. Edgcomb, 654 N.E.2d 598 (Ill. App. Ct. 1995). “) In these cases, there is liability for those who deal with the fiduciary only if there is actual knowledge of the breach of fiduciary obligation or bad faith, even if the fiduciary’s personal debt is paid with the check or the transaction is known to be for the personal…”
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