Re: Suppliers going bust and paying by cheque


"john boyle" <john@xxxxxxxxxxxxxxxxxxxxxx> wrote in message
news:feJHrhBfotEDFwEO@xxxxxxxxxxxxxxxxxxxxxxxxx
> In message <3nf1r7F17hldU1@xxxxxxxxxxxxxx>, Tumbleweed
> <thisaccountneverread@xxxxxxxxx> writes
>
>>not sure JB has ever answered what happens if X forges a cheque on Y's
>>account and pays it to A, and it isnt noticed by Y for some time, lets say
>>a
>>month or two, but enough for the cheque to have cleared. When it is
>>discovered to be a forgery (this might takea long court case I suppose) ,
>>then either the money is 'recalled' from A, and A is out of pocket, or it
>>isnt and B, or B's bank, is. (lets assume at this point that X is long
>>gone)
>
> Who's B? Is it really Y on a bad day? What about Z? :-)
>
> Lets talk names. The drawee doesn't bounce the cheque and the payee
> doesn't have the dosh 'recalled'. The drawee must refund the account
> holder unless the account holder is estopped from denying liability. (i.e.
> he owed the dosh to the payee anyway; or even though knowledgeable of the
> forger forging cheques in the past had done nothing to stop it).
> (Greenwood V Barclays 1933, Brown V Westminster Bank 1964 ;and Bills of
> Exchange Act S24) It then becomes a matter between the drawee and the
> forger. If investigations reveal that the payee is in on this in some way
> then the bank would have a right of action against the payee as well, but
> the cheque remains 'paid'.
>>
>>Given that if you unwittingly buy a stolen car (or anything else) and the
>>theft is later discovered, the car is taken from you and you are left
>>'high
>>and dry',, I'd be inclined to go with the money being recalled from A as
>>its
>>a parallel situation AFAICS.
>>
>
> No, 'money' isnt a physical item, it is an accounting entry. And if
> somebody nicks fifty nicker from grannie's handbag and puts the fifty
> nicker in his pocket in which, by chance, there already happened to be
> another fifty nicker and then was caught by Inspector Knackers Men and
> despite a superb defence by Messrs Sue Grabbit & Runne, is found guilty of
> robbery and made to pay the old bag the fifty nicker back, would it matter
> which of the notes he gave back?
> --
> John Boyle

Not a good analogy JB, because in your case the somebody is caught so he can
be forced to pay it back, with cheques he isnt, and the only Q is which of
the innocents lose out.

I read a story in the 'financial problem pages' of a newspaper, someone paid
electronically and put the wrong account no, but it happened to be a real
one so wasnt picked up as wrong, and thus got paid into that someone elses
account. They couldnt get the money back from the person they paid who were
unwilling to return it. At that stage it hadnt gone to court so it may have
been that a court would be able to order that.

You also say 'it then becomes a matter between the drawee and the forger'
but the forger is long gone, so is the drawee out of pocket then?

--
Tumbleweed

email replies not necessary but to contact use;
tumbleweednews at hotmail dot com


.

Relevant Pages

  • Re: Money mule (type of scam)
    ... > been personally contacted by his bank to ensure he actually wrote the ... I think it just means there are enough funds in the account to cover ... the cheque, and that they have now been marked as spent so they cannot ...
    (uk.finance)
  • Re: Money mule (type of scam)
    ... >> been personally contacted by his bank to ensure he actually wrote the ... >the cheque, and that they have now been marked as spent so they cannot ... and the account holder doesn't notice the debit from his account ... Cash would seem to be different. ...
    (uk.finance)
  • Re: time for a personal check to clear?
    ... *BEFORE* you finish writing it. ... float when writing a cheque. ... If it were just one cheque, and the other person's bank had ... confirmation that, at least right now, the account is still open, ...
    (misc.consumers)
  • Re: Annual Accounts Query
    ... sectional account. ... and pay at the time with group money rather than paying from his own ... pocket or taking a blank pre-signed cheque from the treasurer. ... are on camp coming out of our camp account - like yours. ...
    (uk.rec.scouting)
  • Re: Money mule (type of scam)
    ... Day 3 Cheque represented for payment at Drawee. ... Can defer decision till 3.30. ... If not paid the item returned by 1st class post to collecting bank. ... If advice of a cheque being 'paid' is given then the drawee is stuck with it. ...
    (uk.finance)