HRS §556-7
Bank can pay checks from a fiduciary's principal account
A bank can pay checks written by a fiduciary from the principal's account without being responsible to the principal, unless the bank knows the fiduciary is breaking their duty or acts in bad faith. But if the check is paid to the bank for the fiduciary's own debt, the bank is responsible if the fiduciary breaks their duty.
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The statute, as written — Deposit in name of principal
If a check is drawn upon the account of its principal in a bank by a fiduciary who is empowered to draw checks upon the fiduciary's 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 the fiduciary's 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 the fiduciary's obligation as fiduciary in drawing or delivering the check.
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