Are there any? Is one assumed absent proof of the other?
From a recent Judge Judy …
Lady sues man because two checks bounced. Man says he tried to loan the lady some money but the third-party checks bounced thru no fault of his own.
JJ says you didn’t have a contract with her and can’t prove it was a loan. She found in favor of the lady.
But how can the lady sue to enforce a gift especially if there wasn’t a contract/agreement to give the gift.
Judge Judy isn’t a judge, legally speaking she’s an arbitrator and can decide whatever she wants for whatever reason, not bound by legal precedent.
When she makes a ruling she usually isn’t voicing any legally cognizable principles. Just deciding what she thinks is “fair.”
Legally (IANAL, feel free to clarify), contract law applies to contracts. In a contract, there has to be consideration… both sides have to get something. If I say “I will give you $50” then don’t you can’t sue over it.
So unless there was more to the action than we think, there would be no grounds to sue. OTOH, there is a legal principle IIRC that if you incur costs based on a promise (i.e. I signed a lease because you said you would give me the deposit for it) then you can sue for the loss (I need the damage deposit).
A loan is when you give somebody something like money, and expect to get it back. (There are actually two related concepts, though I don’t know the correct English terms: one is a lease, and the other is a loan. Basically, you do one thing for a dozen eggs - you want a dozen eggs back, but obviously not the same, because they’ve been used up; you do the other for a book, where you want the same book back.)
You can charge a fee for your bother, which is called interest. A loan can like other contracts be made orally, which means it’s a “he said -she said” situation.
A gift is something you give without expecting anything back. (If you give large gifts, they might be taxed under inheritance and gifts for relatives/non-relatives, at least in Germany). A gift can be made orally, too, and again this usually develops into a “he said-she said” situation. Which is absent other clues imossible to solve.
Therefore, no matter how good a friend and bloodbrother or bestest sister the person is, and regardless of whether it’s a gift or a loan (also a gift with strings attached) always do stuff in writing with at least one witness.
At common law, a gift is completed when the giver (not, as some would have it, the “gifter,” which sounds a little too close to “grifter” anyway)
[ol]
[li]Actually or constructively delivers the gift[/li]- Actual delivery is the gold standard; this is where a tangible item physically changes hands
There can be no contract to give a gift, since such a contract would fail for want of consideration.
When controverted, courts distinguish between gifts versus exchanges by attempting to determine the intentions and knowledge of the parties at the time of delivery. There are relatively few legal rules in this area, as adjudicators are called upon to make inferences of fact on the basis of ordinary norms and experience of social interactions in modern American society.
What the … !!!, did the case make any mention of a gift at all, or did you just assume that it must be one or the other? The discussion in the thread follows your subject line but it is not clear that is the point of the case or the reason for the decision.
If you write someone a check and it bounces, I think the maker of the check can have some liability for that (IANAL). And the fact that you mention these were third-party checks also muddies the waters.
Oh, as an addendum to the above…
The adjudicator will also consider the credibility of the parties’ allegations as well. So, in this case, it seems that JJ considered the defendant’s contention that this was not a loan to be more credible. Again, credibility assessments are guided more by judgment than by any legal rules (of course, certain factors are ruled off-limits in guiding the credibility analysis—you couldn’t use a witness’s atheism, for instance, as grounds for finding the witness less credible). But overall, credibility is mostly an area committed to the judge’s discretion.
I think this is the case.
The plaintiff says the defendant owed her money, and has as evidence the checks the defendant gave her.
The defendant says the money was to be a gift, and has no evidence.
Given this situation, it seems to me much more likely that the plaintiff is telling the truth and the defendant is lying.
This seems to be backwards. The OP suggests that the defendant was loaning money to the plaintiff, not that he owed her money. That being the case, a finding that the money was a gift means that the woman would be out of luck, not the man.
Piggybacking on what Kimmy and others have posted, there cannot be a contract to give a “gift”. If there is a contract, it’s no longer a gift, but one party’s consideration for whatever the other party is getting.
Put into simpler terms, if John tells Sarah he’s going to give her a pony, she cannot sue to enforce his promise. If he actually does give her a pony, he cannot sue to get it returned if he later changes her mind.
On the other hand, if John tells Sarah he’ll give her a pony if she sleeps with him, and she does, she can sue to enforce his promise of a pony*. While a lay person might still characterize the pony as a “gift”, it’s clearly not gratuitous; it’s consideration for a binding contract.
*in real life, contracts to undertake illegal acts- prostitution, for example- are void as a matter of public policy, and no US court would enforce John’s promise.
Can’t you generally sue to enforce a cheque, regardless of the reason the payment was to be made? If the defendant feels you shouldn’t have the money, then he can counterclaim for, e.g., return of the alleged loan, or unjust enrichment, or whatever. But if I hold your cheque, and it bounces, I can sue you without having to show why you wrote the cheque in the first place.
Huh? Here’s what I get out of this…
The woman says the guy owed her money, paid her, but the cheque bounced. She produced the failed (third party) cheques as evidence.
The man says he did not owe her money; he only gave her the cheques as a gift. Not his fault they bounced.
Other than that, no documentation. Who would you believe in this case?
Of course, nobody has mentioned WHY (she says) the guy owes her the money. Presumably the reason was good enough for JJ. Quite often with friendly loans, there is no written agreement.
Also, how many guys who have trouble with money (it seems) give a substantial (it seems) windfall they received to someone else as a gift. This tactic seems to juvenile for an eight-year-old, let alone an adult.
“He owed me money”
“No I don’t”
“Aha - they why did you give me the bum check?”
“it was a gift!”
When faced with two contradictory assertions, one job of the judge is to decide who’s telling the truth. Sometimes it’s not hard.
From the OP:
Is this taken from the show’s site?
The issue of whether this was a gift or a loan is a red herring.
The real issue is whether or not a check bouncer can be required to make good on the bad checks, and I think that the answer is always yes, as a matter of law. Even if these were third-party checks, the endorser is liable.
No, the law surrounding negotiable instruments is very convoluted (and I seriously doubt Judge Judy is a UCC scholar). Particularly UCC § 3-303(b):
(b) “Consideration” means any consideration sufficient to support a simple contract. The drawer or maker of an instrument has a defense if the instrument is issued without consideration. If an instrument is issued for a promise of performance, the issuer has a defense to the extent performance of the promise is due and the promise has not been performed. If an instrument is issued for value as stated in subsection (a), the instrument is also issued for consideration.
Lack of consideration is a defense, so it matters whether the check was considered a gift.
It was also mentioned that the check was issued by a third-party. So this raises the question of whether the plaintiff might have standing as a holder in due course. But § 3-302(a)(2)(i) requires that a holder take the instrument “for value” in order to obtain standing as a holder in due course.
It should be noted that this is all a matter of state law, of how the state has implemented the UCC, and how its courts have interpreted it. But there is no absolute standard that the issuer of a check must always, unconditionally, make good on it under all circumstances.
Ah, you are right about a few things … Whether it was a gift or not will determine whether the defendant became a HIDC (assuming there was no notice of any defense to payment). But that aside, holders who are not holders in due course (recall a holder is merely one who possesses an instrument payable to to him/herself or payable to bearer) are still entitled to enforce (UCC § 3-301).
Also, presuming that the plaintiff made the third-party check payable to the defendant by (ahem) “indorsing” it over to her, he is liable under UCC § 3-415.
They are entitled to enforce and the obligor is entitled to raise defenses to this right to enforce. Specifically, UCC § 3-305(a)(2) states
*(a) Except as stated in subsection (b), the right to enforce the obligation of a party to pay an instrument is subject to the following:
…
§ 3-303 explicitly lists lack of consideration as a defense.
§ 3-301 is the definition of a person entitled to enforce the instrument. If that gave a holder unconditional right to enforce an instrument, what would be the point of listing defenses to enforcement in later sections? Particularly sections that use the term “person entitled to enforce the instrument” and list limitations on this entitlement?
I guess it comes down to whether the presentation of the check completes the gift. If I hand you a check for $100, and you accept it, is that gift now complete? Or is it only a promise to pay $100 out of my bank account?
If the former, the gift is complete and can’t be retrieved. If the latter, then it would be unenforceable.
ETA: Even if the latter, couldn’t the lady raise promissory estoppel? Couldn’t she claim that she went out and bought a bunch of clothes, or perfume, or liquor because she thought she was coming into some money and now is in financial straits?
To clarify… the man never owed the lady any money. She was moving from AZ to MN and needed help with the costs. He gave her the two third-party checks. When they bounced she wanted to be reimbursed. He said it wan’t his fault that they bounced and besides he was just attempting to loan her the money anyway.
Thanks for all the fact based answers!!! I’m often amazed at the info one can get here!!!
It seems like his second “oh by the way” argument is what screwed him. If he was loaning her money, he expected consideration in return. Courts today strain to find consideration in an agreement, even if it is friendship or affection. He could have known that these third party checks were suspect and to enter into a loan agreement would give him a better chance of paying off: that would be consideration.
Dude should have stuck with the gift line…