I stopped payment on a check to a contractor who did not complete work as promised. He cashed check at CSS, a check cashing company. They are now suing me for value of the check.
Check cashing company has sent me xerox copies of cases supporting its position that since it provided full value for a service - that is, giving cash for the check - I am obligated to pay this amount. In other words, they state that CSS, as holder in due course, cannot be confused with payee (the contractor)of the check. That just because the contractor did not perform the service and give value for the check, does not mean that they, as holder in due course, did not provide their service of providing cash for the check. Therefore,as the writer of the check, I must pay the face amount, and they are initiating a civil suit. (Amount is $1150)
Their argument: CSS is a holder for value because it paid cash for the check; it does not matter whether the payee gave value for the check.
Is this indeed correct?
Check cashing company has sent me xerox copies of cases supporting its position that since it provided full value for a service - that is, giving cash for the check - I am obligated to pay this amount. In other words, they state that CSS, as holder in due course, cannot be confused with payee (the contractor)of the check. That just because the contractor did not perform the service and give value for the check, does not mean that they, as holder in due course, did not provide their service of providing cash for the check. Therefore,as the writer of the check, I must pay the face amount, and they are initiating a civil suit. (Amount is $1150)
Their argument: CSS is a holder for value because it paid cash for the check; it does not matter whether the payee gave value for the check.
Is this indeed correct?
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