Collecting payment in Small claims for a stop payment Check

[Minnie3]

What is the name of your state (only U.S. law)? New Jersey.

Hi,
A check was made out to my fiancee and he endorsed the check over to me where I cashed the check at my bank. (he didn't have his wallet on him at the time and I offered to do this).
I cashed it at my bank on Sat Aug 1st, therefore the date of transaction per the bank is Aug 3rd. Unbeknownst to us, the person stopped payment on the check on Aug 3rd as well. My bank charged me the amount of the check plus a $10 fee - totalling $1300 that was taken out of my account.

Can I take the person that wrote to check to Small claims court in NJ to seek reimbursement? Even though she didn't write the check to me, I was the last person to endorse the check and cash it.

I can't seem to get a clear answer on this. And I don't want to be in court in front of a judge who will throw the case out because I can't legally seek reimbursement from the person that wrote the check.

Thank you.What is the name of your state (only U.S. law)?

 

[ecmst12]

Your fiance is the one who should sue.

 

[JETX]

Can I take the person that wrote to check to Small claims court in NJ to seek reimbursement?

You can, but it will be tossed. The problem here is that you are a third party to the transaction.

You will need to sue the party that YOU contracted with (your fiance) and then he will have to sue the party that HE contracted with (the checking account holder).

 

[Zigner]

You can, but it will be tossed. The problem here is that you are a third party to the transaction.

You will need to sue the party that YOU contracted with (your fiance) and then he will have to sue the party that HE contracted with (the checking account holder).

I agree with the concept, but the OP wouldn't *have* to sue her fiance first. The fiance could simply reimburse the OP and then sue the check writer.

 

[itdepends]

All bad answers so far.

The answer is yes, you have standing to sue the issuer because you had the legal right to cash the check when it was endorsed to you.

 

[Zigner]

All bad answers so far.

The answer is yes, you have standing to sue the issuer because you had the legal right to cash it.

My answer was dead-on accurate and an easy way to solve the problem for our OP. It saves our OP from dealing with the court system, where, even with a judgment, she may not see her money for a long, long time.

 

[itdepends]

My answer was dead-on accurate and an easy way to solve the problem for our OP. It saves our OP from dealing with the court system, where, even with a judgment, she may not see her money for a long, long time.

Your answer was wrong to the extent that you agreed that JET's answer was correct (his answer was way off base). But you are correct that the fiance can reimburse the OP and then sue the issuer himself.

 

[Zigner]

Your answer was wrong to the extent that you agreed that JET's answer was correct (his answer was way off base). But you are correct that the fiance can reimburse the OP and then sue the issuer himself.

Where did I agree that his answer was correct? If you read my post, you'll see that I CLEARLY stated that the OP wouldn't have to sue the fiance.

 

[itdepends]

Where did I agree that his answer was correct? If you read my post, you'll see that I CLEARLY stated that the OP wouldn't have to sue the fiance.

I agree with the concept

You agreed with his "concept," and his "concept" was way off base.

 

[Zigner]

You agreed with his "concept," and his "concept" was way off base.

His concept was that the OP could sue. You misunderstood my post.

In any case, OP has the answers she came looking for. Good day.

 

[JETX]

All bad answers so far.

The answer is yes, you have standing to sue the issuer because you had the legal right to cash the check when it was endorsed to you.

And of course, YOUR answer is NOT correct.
You need to read the UCC (Article 3) and understand who the parties are in a 3rd party check relationship. Simply, there is NO contractual obligation between the writer of the check (first party) and the OP (third party).

§ 3-415. OBLIGATION OF INDORSER.

(a) Subject to subsections (b), (c), and (d) and to Section 3-419(d), if an instrument is dishonored, an indorser is obliged to pay the amount due on the instrument (i) according to the terms of the instrument at the time it was indorsed, or (ii) if the indorser indorsed an incomplete instrument, according to its terms when completed, to the extent stated in Sections 3-115 and 3-407. The obligation of the indorser is owed to a person entitled to enforce the instrument or to a subsequent indorser who paid the instrument under this section.

(b) If an indorsement states that it is made "without recourse" or otherwise disclaims liability of the indorser, the indorser is not liable under subsection (a) to pay the instrument.

(c) If notice of dishonor of an instrument is required by Section 3-503 and notice of dishonor complying with that section is not given to an indorser, the liability of the indorser under subsection (a) is discharged.

(d) If a draft is accepted by a bank after an indorsement is made, the liability of the indorser under subsection (a) is discharged.

(e) If an indorser of a check is liable under subsection (a) and the check is not presented for payment, or given to a depositary bank for collection, within 30 days after the day the indorsement was made, the liability of the indorser under subsection (a) is discharged.

 

[itdepends]

And of course, YOUR answer is NOT correct.
You need to read the UCC (Article 3) and understand who the parties are in a 3rd party check relationship. Simply, there is NO contractual obligation between the writer of the check (first party) and the OP (third party).

§ 3-415. OBLIGATION OF INDORSER.

The provision you quoted states that indorsers are liable. That does not mean the issuer is off the hook. The OP has a choice to sue her fiance or sue the issuer. She asked about suing the issuer. You misunderstand the law.

 

[Just Blue]

The provision you quoted states that indorsers are liable. That does not mean the issuer is off the hook. The OP has a choice to sue her fiance or sue the issuer. She asked about suing the issuer. You misunderstand the law.

You are telling an attorney that he is misunderstanding the law? What are your qualifications?

 

[itdepends]

You are telling an attorney that he is misunderstanding the law? What are your qualifications?

He's an attorney? Interesting. This is actually basic stuff and it's on every bar exam in the country. I wonder how he managed to pass his exam without understanding the basics of commercial paper. By the way, I'm an attorney as well.

 

[TigerD]

I have a question:
If Zigner and JETX are right, and I have no opinion either way, why does a check cashing company have recourse to go after the writer?

It seems to me that we have had some conflicting information posted.
https://forum.freeadvice.com/debt-collections-84/cashing-third-party-checks-479344.html

Thanks