Legal Question in Credit and Debt Law in California

third party check

The Company I work for issued a check to a customer and later cancelled the check by issuing a stop payment. This was done at the customer's request. The money was then redeposited in the customer's wagering account held with my company. Once the check was received by the customer, he cashed the check at a liquor store. Now the liquor store is trying to collect the $225 from my company. Are we liable for the check or is our mutual customer who knowingly gave the store a bad check.


Asked on 6/17/02, 6:29 pm

1 Answer from Attorneys
Martin Lathrop Russakow, Ryan & Johnson

Re: third party check

I am a little confused about the facts, but the general rule about checks is that once they have entered the "Stream of Commerce" they are considered the same as cash. Leaving the writer of the check with no recourse even if there is a stop payment on the check.

If you have further questions, feel free to contact me-Martin

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Answered on 6/19/02, 6:27 pm


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