KRS 386.110: Transfer of a negotiable instrument by a 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 his principal is endorsed

by a fiduciary empowered to endorse the instrument on behalf of his princ ipal, the

endorsee is not bound to inquire whether the fiduciary is committing a breach of his

obligation as fiduciary in endorsing 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 the breach or with knowledge of such

facts that his action in taking the instrument amounts to bad faith.