2023 Illinois Compiled Statutes › Chapter 760 - TRUSTS AND FIDUCIARIES › 760 ILCS 65/ - Fiduciary Obligations Act.

(760 ILCS 65/0.01) (from Ch. 17, par. 2000)
Sec. 0.01. 
		Short title. 
		This Act may be cited as the
Fiduciary Obligations Act.
(Source: P.A. 86-1324.)
(760 ILCS 65/1) (from Ch. 17, par. 2001)
Sec. 1. 
		(1) In this Act unless the context or subject matter otherwise requires:
"Fiduciary" includes a trustee under any trust, expressed, 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 any other person acting in a fiduciary capacity for any 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 any person to whom a fiduciary as such owes an obligation.
(2) A thing is done "in good faith" within the meaning of this Act, when
it is in fact done honestly, whether it be done negligently or not.
(Source: Laws 1931, p. 676.)
(760 ILCS 65/2) (from Ch. 17, par. 2002)
Sec. 2. 
		
		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.
(Source: P.A. 80-1495.)
(760 ILCS 65/4) (from Ch. 17, par. 2004)
Sec. 4. 
		
		If any negotiable instrument payable or indorsed to a fiduciary
as such is indorsed by the fiduciary, or if any negotiable instrument
payable or indorsed to his principal is indorsed by a fiduciary empowered
to indorse such 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 such breach or with knowledge of such facts that his action in
taking the instrument amounts to bad faith. If, however, such instrument is
transferred by the fiduciary in payment of or as a 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 his
obligation as fiduciary in transferring the instrument.
(Source: Laws 1931, p. 676.)
(760 ILCS 65/5) (from Ch. 17, par. 2005)
Sec. 5. 
		
		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, 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 such breach or with
knowledge of such facts that his 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 his obligation as fiduciary in drawing or delivering the instrument.
(Source: Laws 1931, p. 676.)
(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.)
(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.)
(760 ILCS 65/8) (from Ch. 17, par. 2008)
Sec. 8. 
		
		If a check is drawn upon the account of his principal in a bank by
a fiduciary who is empowered to draw checks upon his 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 his 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 his obligation as fiduciary in
drawing or delivering the check.
(Source: Laws 1931, p. 676.)
(760 ILCS 65/9) (from Ch. 17, par. 2009)
Sec. 9. 
		
		Notwithstanding any other law, if a fiduciary makes a deposit in
a bank to his personal credit of
checks drawn by him upon an account in his own name as fiduciary, or of
checks payable to him as fiduciary, or of checks drawn by him upon an
account in the name of his principal if he is empowered to draw checks
thereon, or of checks payable to his principal and indorsed by him, if he
is empowered to indorse such checks, or if he otherwise makes a deposit of
funds held by him as fiduciary, the bank receiving such deposit is not
bound to inquire whether the fiduciary is committing thereby a breach of
his obligation as fiduciary; and the bank is authorized to pay the amount
of the deposit or any part thereof upon the personal check of the fiduciary
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 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.
(Source: P.A. 90-665, eff. 7-30-98.)
(760 ILCS 65/10) (from Ch. 17, par. 2010)
Sec. 10. 
		
		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 or trustees authorized by the other trustee or trustees 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 such
trustee or trustees 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.
(Source: Laws 1931, p. 676.)
(760 ILCS 65/11) (from Ch. 17, par. 2011)
Sec. 11. 
		
		In any case not provided for in this Act 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.
(Source: Laws 1931, p. 676.)
(760 ILCS 65/12) (from Ch. 17, par. 2012)
Sec. 12. 
		
		All acts or part of acts inconsistent with this act are
hereby repealed.
(Source: Laws 1931, p. 676.)