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Car was paid for with stolen cheque

I was paid for my car with a stolen cheque. The cheque cleared and the man picked up my car and took it to England. Now I find out that the cheque is stolen. Will I have to give back the money? I will never get my car back.

This is a very unfortunate case but the short answer to it is that the buyer of the car, who I assume knew that the cheque was stolen, had no legal title to the cheque and therefore may not  have been able to pass on good legal title to the cheque to you. I'm assuming that the cheque was payable to the buyer and he/she endorsed it in your favour.

A question arises here however – who is asking you to give the money back?  Is it the British police and if so what are they doing about tracing your car?  And also, what are they doing about tracing the so-called buyer?

It might be worth seeing your Solicitor about this because in practical terms you might be able to put up a defence to a criminal allegation that says you had no reasonable knowledge that the cheque was stolen and no reasonable suspicion about the situation and therefore you committed no crime.  It is therefore a civil matter and it is possible that you may be able to mount a defence that you took the cheque in good faith, the cheque appeared perfectly in order and negotiated it (ie cashed it) as “a Holder in Due Course.” Questions to answer here would be was the cheque crossed? Was it marked “Not Negotiable” and did you ask for ID before accepting the cheque? We’re into the complex area of title to negotiable instruments and 600 page legal text-books have been published on the subject. In other words there’s no easy answer.

That said and in a practical sense unless the owners of the cheque intend to mount a civil action in Ireland you should consider refusing to pay. If the amount is relatively small they may just back down.  Having said that, I would repeat that you should get legal advice before you take this stand to make sure that the Gardai don’t come calling to your door waving an arrest warrant alleging that you knew the cheque was stolen.

Of course in the answer to this question I am assuming that the signature on the cheque was genuine and not forged - because the cheque was honoured by the bank. If, for example the car buyer has stolen a blank cheque form from the cheque book of the owner, filled it out in your favour and forged the entire cheque then the cheque owner would be entitled to his/her money back. But the bank may also be liable to the owner for having paid out on the cheque.

The issues raised in the answer to this NewsTalk listener's question are dealt with in a general way as can only be the case on live radio. Before relying on the advice given in this answer, whether you heard the broadcast or are for the first time reading the issues here please do not rely on the broad advice given. For a detailed professional opinion please consult a qualified legal advisor and for further details read our disclaimer on the Home Page.

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