Legal Question in Business Law in Illinois

Stop Payment On Check Cashed By Third Party

A check was issued by UMB bank to a courier company. The check was taken to a check-cashing service to be cashed as it was more convenient for the Payee. Approximately three days after the check was cashed, the bank put a stop payment on the check. Services were rendered for a portion of the period the check covered. The check-cashing place said they were taking the check to the State's Attorney for prosecution against the Payee. The bank told the check-cashing place they were putting the stop payment on the check because they were unhappy with our services.

At the time the stop payment was placed upon the check the bank was apparently unhappy with our courier service and they favored a competitor. Prior to the day the stop payment was placed, the bank was pleased with our services and had no complaints. Can the Payee of the check be criminally prosecuted even though Payee had no idea that a stop payment would be placed upon the check days after it was cashed? What legal remedies are available to the Payee, if any? Does the actions of UMB not paying for services rendered constitute ''Theft of Services?'' Who is responsible to cover the amount of the check?

Asked on 5/25/01, 12:38 am

2 Answers from Attorneys

Lawrence A. Stein Aronberg Goldgehn Davis & Garmisa, LLC

Re: Stop Payment On Check Cashed By Third Party

I think criminal prosecution against the payee is unlikely, but the payee is responsible to the check-cashing service for the amount of the check. When the payee cashed the check, the payee esstially made a promise to the check cashing service that the check would clear. The payee's recourse is against the bank.

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Answered on 6/23/01, 12:23 pm

Kenneth J. Ashman Ashman Law Offices, LLC

Re: Stop Payment On Check Cashed By Third Party

It sounds like you have some real legal issues that need resolution. Depending upon more of the facts, it is possible that the Bank has engaged in wrongdoing by stopping payment on a check for which they paid for services that were, in part, rendered.

For how much was the check?

-- Kenneth J. Ashman; 312-648-1700

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Answered on 6/25/01, 11:23 pm

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