Legal implications of cashing a joint cheque

[Christien]

I realize laws differ everywhere, but I'm looking for some general info about what would happen if one party cashed a cheque made payable jointly, without the other party's consent. I've got a situation here at work where an insurance company paid out a total loss, made jointly payable to the insured and to us, the lienholder. The insured should sign it, mail it to us, then we'll cash it and apply it to his balance.

Would we have recourse against the bank if he signed it and cashed it himself? What if he forged a signature from us? If we have no recourse against the bank and he did indeed cash it himself, we're out $6K, because guaranteed he'll have spent it on hookers and blow (i.e. pi$$ed it away).

Hopefully this isn't the case, and it's in the mail on its way to us, but I'm concerned because before the cheque was issued he was easy to get hold of. Now his cell phone is always "unavailable", meaning pay-as-you-go ran out.

Thanks for any ideas.

[Eric 951]

I just ran into this situation--a royalty check was made out jointly to my sister and I as we are both listed on a property deed as joint landowners. I was able to deposit the check into my account, only after a bank employee witnessed my sister signing the check and verified my sisters' identity. Otherwise, as you mention, there is no way for a bank to tell if the other parties' signature is a forgery.

[peppy]

The insurance co. should have sent the check to the lien holder. Call the insurance co. and have them stop payment on the check.

[stomachmonkey]

Originally Posted by peppy

The insurance co. should have sent the check to the lien holder. Call the insurance co. and have them stop payment on the check.

Why do banks have drive up windows?

So the cars can visit their real owners.

I believe Peppy is correct.

Ins. co. should not have sent the check to the borrower.

And some banks do odd stuff in the name of customer satisfaction.

Years ago Citi Bank was cashing checks made out to my business name that I had been depositing in my personal account, not legal for Citi to do. (Was 16, my first "business" so I did not know about DBA's and separate accounts)

I'd opened a personal account at another more convenient bank and got an education when my checks go stuck in the system for 30 days before being returned.

His bank should not be cashing/accepting a check made out to a business.

[Christien]

The vehicle registration is in his name. We loan money for the customer to purchase the car, take out a lien, and the title is registered in his name. The lien should protect us from unauthorized sales, and the gps/starter disabler should protect us from deadbeat customers. But because the title's in his name, the cheque is made jointly payable to vehicle owner and lienholder.

[peppy]

Originally Posted by Christien

The vehicle registration is in his name. We loan money for the customer to purchase the car, take out a lien, and the title is registered in his name. The lien should protect us from unauthorized sales, and the gps/starter disabler should protect us from deadbeat customers. But because the title's in his name, the cheque is made jointly payable to vehicle owner and lienholder.

AH, in America the bank holds the title to said car until the loan is satisfied.

That may not have sounded as good as I thought, I mean no offense Christien.