Breech of Contract/Check Fraud

[Emismome]

south carolina. i recently took over ownership of a consignment store. previous owner signed an agreement that all monies owed consigners would be paid by november 15. (checks were ready on november 15 to be picked up) approximately november 28 checks that had been picked up were returned for NSF from the banks. since then i have been paying the bank fees and check amounts for the consigners who have brought their checks in. the previous owner has been notified..said money would be in the account.,.never was.....
i am now sending a letter to her that says she is in breech of contract of our agreement and no more monies will be sent to her.
any help would be greatly appreciated.

 

[JETX]

Why are you paying off these checks owed to others and not letting the check holders handle their own problems??

By your VOLUNTARILY making these checks good, you may have a hard time convincing ANYONE (a court?) that you have any right to reimbursement, or to deducting them from any monies owed to the check writer.

 

[JackieTroll]

Not necessarily true halkeet.

If you have a written agreement that the previous owner would settle those debts, you should prevail in court. Any reasonable judge would understand that you settled with those customers to protect the integrity of the business you have just taken over.

 

[JETX]

Not true 'trollee'.
You are making the common mistake of assuming that "Any reasonable judge would understand that you settled with those customers to protect the integrity of the business you have just taken over".

The problem is that courts rule based on the law, and that often has no basis in 'reasonableness'.

The facts are:
1) 'Andy' wrote a bad check to 'Bob'.
2) 'Chuck' (without any obligation or requirement), makes good on that check that Andy gave to Bob.
3) Chuck then tries to deduct the cost of the check from payments owed to Andy.
4) Andy sues Chuck for the unpaid balance that was clearly required by the sales contract.
5) Court finds that Chuck improperly deducted the check amounts that he paid Bob and still owes the unpaid balance, giving a judgment to Andy. The court reasons that the checks do NOT constitute a direct contractual obligation between Chuck and Andy since Chuck took it on himself to 'honor' the bad checks.

Summary:
Chuck can counter-sue Andy for the value of the checks, claiming that he 'purchased' the debts from the original check holders, thereby becoming the holder in due course. But, this would have to be a separate issue from the contractual obligation of the sales contract.

 

[Emismome]

First. The previous owner did not "purchase" anything from the consigners, they left their property there with the agreement that they would be paid a 50/50 split on their merchandise. Second. In the contract that was signed, It stated that the previous owner would take care of any and all debt owed up until the time of the contract being signed. After 10 days of people picking up checks and them coming back with NSF on them, or them going to the bank and trying to cash them and NSF in the account (after 10 days) they were very upset.
Since this business runs with the 50/50 split, when the merchandise sells you get paid 1/2, I felt that it was necessary to go ahead and cash these checks for the person so that I could possibly keep their business. Nothing was ever "Bought" from them. This isn't the first time this has happened with the previous owner, I am finding out....but with over $1500.00 still outstanding....wouldn't this be called check fraud on her part. I have also found out that the "Promisary Note" we signed did not even have the stores name on it....so it is illusionary.
The previous owner has been called numerous times and refuses to return any phone calls which is why this is being done. I feel as if I was Taken advantage of.
Thank you.

 

[Emismome]

also..these checks were written to the consigners not me.

 

[JackieTroll]

Hulkeet can try and over think it, but I spend 10 hours a day in a courthouse, and your case isn't all that unusual. Judges most certainly DO rule on the "reasonableness" of a person's actions when applying the law.

In fact, over the past 12 years, I'd say I've seen judges apply common sense morals to guide their rulings in 95% of the small claims judgements.

No one here will guarantee you anything, but I'd easily bet the price of Hulkeet's hairpiece you can prevail in court.

 

[JETX]

Troll-boy:
Sorry, but 12 years of watching LA Law, Perry Mason and Law and Order, doesn't make you an expert. And, your "10 hours a day" must be from the jury box.... during morning docket call for that nights arrests.

I can tell you this.... if I were the original owner of the business and I wrote checks to a person (CONTRACT LAW) and YOU decided to make good on my checks WITHOUT MY AUTHORIZATION, I can guarantee that you would have a hard time supporting your position that you could OFFSET your liability to me with the checks that YOU interceded into as an 'interloper'.

And, even less chance of you getting away with breaching OUR agreement from your actions. (Those are the issues that our original writer raised... not the issue you are trying to 'spin'.)

This does NOT mean that you wouldn't win a separate cause of action if you tried to. That would entirely depend on the facts.