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Stop Payment Paid in Error: What Now?
I put a stop payment on a personal check according to bank procedures. The next day the man walks into my bank and cashes the check. The bank is now telling me they want me to cover the $5,000 check or they will take possession of the horse. They do not have a lien on it. What is your advice?
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 There is apparently more to your story, and we're going to have to make some assumptions in order to "fill in the blanks". Let's assume you issued the check to purchase the horse. Let's also assume that you have the horse, but decided to stop payment on your check for some reason.
Why the bank cashed the check is unknown. It may be due to incomplete or inaccurate information about the check on the stop payment order, either you gave them the wrong information or they recorded the wrong information, or the bank simply made a mistake.
If the bank made the error, you can make a claim against the bank for the amount of your damages. That's not the amount of the check. If you still have the horse, you have some part of the $5,000 value. If the bank owes you money, however, it will have the right to assume the legal position of the seller of the horse, and sue to recover the horse from you. Basically, you're not entitled to end up with more than you were entitled to in the deal -- you can't have both the horse and your $5,000.
Try to strike a bargain with the bank. It might also be wise to talk to an attorney to learn who has what rights in this transaction -- you or the bank and the seller.
Published on BankingQuestions.com 8/07/08
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