Home » Are You Still Responsible for a Stopped Bank Check That Goes Through?
A stopped payment is a check that you have asked your bank not to pay. When you stop payment on a check, you are telling your bank not to allow the check to be cashed. The check will have “stop payment” written across the front of it. But what of the check went through before a stop payment?
Payee: the party in an exchange of goods or services who receives a payment.
Drawer: the maker of the check, the person paying.
Drawee: usually a bank, the party that has been ordered by the drawer to pay a certain sum of money to the person presenting the check (the payee).
Holder: a person who possesses a promissory note (such as a teller’s check) that lists their name and is entitled to receive the amount listed as payment.
Holder in Due Course: means the holder takes the check free from all defenses of any party to the instrument with whom the holder has not dealt (except infancy, incapacity, duress, illegality of the transaction, fraud, discharge in insolvency, and any other discharge of which the holder has notice).
Teller’s Check: a check drawn by a savings association on its account at another financial institution and made payable to the person designated by the customer purchasing the check.
Stop Payment Order: an order to the drawee not to pay the check (affects the drawee’s liability to the payee).
Summary Judgment: considered proper when no genuine issue of material fact exists and the person requesting it is entitled to judgment as a matter of law.
Rule 41, Texas Rules of Civil Procedure: A claim is properly severable if (1) the controversy involves more than one cause of action, (2) the severed claim is one that would be the proper subject of a lawsuit if independently asserted, and (3) the severed claim is not so interwoven with the remaining action that they involve the same facts and issues.
Rule 60, Texas Rules of Civil Procedure: Any party may intervene in a case unless they are struck out by the court for sufficient cause on the motion of the opposite party. An intervenor is not required to secure the court’s permission to intervene; the party who opposed the intervention has the burden to challenge it by a motion to strike. a person or entity has the right to intervene if the intervenor could have brought the same action, or any part thereof, in his own name, or, if the action had been brought against him, he would be able to defeat recovery, or some part thereof.
Guaranty Federal Savings Bank v. Horseshoe Operating Co., 793 S.W.2d 652 (Tex. 1990)
Payees of teller’s checks drawn by savings and loan associations (drawer) on other financial institutions sued the savings and loan associations after they stopped payment on the checks. In two such cases, the University Savings case and the Guarantee federal case, the trial court granted summary judgment and held that the savings and loan associations were liable on the checks. On appeal in the University Savings case, the First Court of Appeals rejected the “cash equivalent” analogy, and decided that the savings association, as a “customer” of a “bank,” had a statutory right to stop payment on its check and assert its own limited defenses to payment (therefore summary judgment was not proper here). On appeal in the Guarantee federal case, the Fifth Court of Appeals held that teller’s checks are equivalent to cashier’s checks or cash, and therefore not subject to revocation. The Supreme Court affirmed the First Court of Appeal’s judgment but reversed and remanded the Fifth Court of Appeal’s judgment (with the exception of affirming the Court’s decision to sever two actions).
These two cases were consolidated and brought before the Supreme Court. The Court held that (1) savings associations that issue a teller’s check may assert defenses (including its customers’ defenses) to payment; (2) that issues of material fact precluded the summary judgments in both cases; (3) that the trial court in the University Savings case abused its discretion in striking Petrolife’s plea in intervention; and (4) that the trial court in the Guaranty Federal case did not abuse its discretion in severing Horseshoe’s action on the check from Guaranty Federal’s third party action.
For the first issue, the Court stated that even though University Savings and Guaranty Federal stopped payment of the teller’s checks, they remained liable on the checks and ICC and Horseshoe could pursue an action on the checks against them. For the second issue, the Court articulated that genuine issues of fact existed pertaining to whether one of the parties in both cases were holders in due course, which meant the trial court erred in granting the summary judgments. For the third issue, the Court determined that the trial court abused its discretion in striking the plea by Petrolife (company contracted to buy blending gasoline from Intercontinental Consolidated Companies, Inc. (ICC)). This was an error because the party opposing the intervention did not motion to strike, which is a requirement under Rule 60 of the Texas Rules of Civil Procedure. Since no such motion occurred, the trial court should not have struck Petrolife’s plea. For the fourth issue, the Court stated that the trial court did not abuse its discretion and met Rule 41 of the Texas Rules of Civil Procedure. The severed claim (Horseshoe’s action for wrongful dishonor and debt against Guaranty Federal) was the proper subject of an independently asserted lawsuit, and the severed claim did not involve the same facts and issues as the other claims (Guaranty Federal’s action concerned conspiracy to defraud).
It is an abuse of discretion: (1) where the intervenor has not been stricken out by the court and could have brought the same action/would recover, (2) the intervention will not complicate the case by an excessive multiplication of the issues, and (3) the intervention is almost essential to effectively protect the intervenor’s interest.
A claim is properly severable if (1) the controversy involves more than one cause of action, (2) the severed claim is one that would be the proper subject of a lawsuit if independently asserted, and (3) the severed claim is not so interwoven with the remaining action that they involve the same facts and issues.
Guaranty Federal Sav. Bank v. Horseshoe Operating Co. shows that (1) savings associations that issue a teller’s check may assert defenses and (2) that parties that issue pleas to intervene should not be denied if the opposing party doesn’t motion to strike.
When a will is created, the person who made the will (the testator) appoints someone to carry out their wishes after they die (the executor). The executor is responsible for distributing the assets of the estate according to the terms of the will.
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If you have issued a check and then stopped payment on it, you may be wondering who is responsible for the check. The answer to this question depends on a few factors, including whether or not the check has been cashed and whether or not you have notified the payee of the stop payment.
If the check has been cashed, then you are responsible for the payment, even if you have stopped payment on the check. This is because the payee has already taken action based on the assumption that the check will be honored.
If the check has not been cashed, then you are typically not responsible for the payment, as long as you have notified the payee of the stop payment. The payee will be aware that the check will not be honored and can take appropriate action.
When you stop a check, you’re essentially telling your bank to not release the funds to the payee. Once a check is stopped, you can’t restart it without the payee’s consent. If the check has already been processed by the payee’s bank, then it’s up to the payee to work with their bank to get the funds released. In short, if a check has been stopped and goes through anyway, you’re still responsible for that check.
Yes, an official bank check can be stopped. The process is called a stop payment and you would need to contact your bank to initiate the stop payment. Once the stop payment is processed, the check will no longer be valid and the payee will not be able to cash it.
If you have ever stopped a check, you may have wondered what happens to it after you notify the bank. The process is actually quite simple. Once the bank is notified, they will put a stop on the check and it will be returned to the payee unpaid. The bank may also charge a fee for stopping the check.
If you need to cancel a check, the best thing to do is to contact your bank and ask them to put a stop payment on the check. This will ensure that the check will not be able to be cashed. You may also want to ask for a new check to be issued.