55-7-1. Liability of third persons dealing with trustees.
One who actually and in good faith transfers any money or other property to a trustee as such is not bound to see to the application thereof; and his rights can in no way be prejudiced by a misapplication thereof by the trustee. Other persons must at their peril see to the proper application of money or other property paid or delivered by them.
Source: SDC 1939, §59.0117.