Question: A neighbor of mine (Reuven) was having problems providing for his family, and stores, including a grocery store (Shimon) were unwilling to sell him on credit. I gave him personal post-dated checks to solve the problem, so they could periodically draw on my account. Reuven would pay me the money by the time the check was to be drawn. When I saw that Reuven stopped paying me, I cancelled the remaining checks and told him not to use them. Shimon has called me, demanding that I reimburse him for cancelled checks. I told Shimon why I cancelled them and that, since Reuven received his products, he should demand payment of Reuven. Am I right?
Answer: The halachic status of checks is very complicated. There are three basic approaches: 1) A check is like cash (see Igrot Moshe, Choshen Mishpat II:15); 2) A check is like a promissory note (Minchat Yitzchak V:119); 3) A check is a request from the bank, until told otherwise, to give money to the one who holds it (Shevet Halevi VII:222).
These approaches can affect many legal questions. Within our general context, according to approach 3, one can cancel, for good reason, checks that he has already given, which is more difficult according to approaches 1 and 2. In your case, as you wrote the check which is held by Shimon, with whom you had no direct dealings, the ability to cancel the checks is crucial. If you can cancel it, he ostensibly has no claims against you, just against the person who gave him the checks. However, based on the way checks are used and the common practice and the legal systems we are aware of, we believe that a check should be treated like a promissory note (see Pitchei Choshen, Halva’ah 13:(21)). Therefore, one may not cancel a check, once it has been given for use, except to prevent its illegal use. You feel that your neighbor is in effect doing just that by not following the conditions you set out. We cannot investigate why he is not following your agreement, whether he still deserves your help (perhaps he needs more help), or whether you can be morally expected to provide that help. We will deal just with legality.
Regarding checks that Reuven gave to Shimon before you ended the arrangement, you are obligated to honor the checks. Firstly, it was, at the time, legal use of the checks and obligates you. Also, you apparently wrote the checks as a means of getting Shimon and others to give Reuven products on credit. In other words, your promise to pay his bills secured a loan for Reuven. This makes you into an arev kablan (see Bava Batra 174a), a strong type of guarantor (usually a guarantor pays only if the borrower defaults). While the Shulchan Aruch (CM 131:1) says that a guarantor can back out, that is only before the loan takes place (otherwise, it is not a guarantee at all).
In regard to checks that Reuven used after you told him to stop doing so, the matter is complicated. He, in effect, stole your checks to give them to an unsuspecting Shimon. The general rule is that if a buyer did not have reason to suspect he was buying a stolen object, when the owner comes to retrieve it, the owner has to reimburse the buyer for what he spent on the item (Bava Kama 115a; Shulchan Aruch 356:2). This practice was instituted to prevent uncertainty in the markets (takanat hashuk). Thus, at first glance, the takana would require you to pay Shimon for the money he lost by accepting your check. (If your check was used to pay past debts, the takana does not apply (ibid. 6).) The takana does not usually apply to stolen documents (Shach, CM 50:7), but it does apply to a mamrani (equivalent to an open check) (ibid.). On the other hand, the takana requires payment before one extracts his object from the buyer. It apparently does not stop you, the owner of a bank account, from preventing Shimon to extract money from you based on a stolen check (Pitchei Choshen, Geneiva 3:(22); see Shach 356:4). Other legal and moral factors may play a role here, but we have set out the basic principles.
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Answer: The halachic status of checks is very complicated. There are three basic approaches: 1) A check is like cash (see Igrot Moshe, Choshen Mishpat II:15); 2) A check is like a promissory note (Minchat Yitzchak V:119); 3) A check is a request from the bank, until told otherwise, to give money to the one who holds it (Shevet Halevi VII:222).
These approaches can affect many legal questions. Within our general context, according to approach 3, one can cancel, for good reason, checks that he has already given, which is more difficult according to approaches 1 and 2. In your case, as you wrote the check which is held by Shimon, with whom you had no direct dealings, the ability to cancel the checks is crucial. If you can cancel it, he ostensibly has no claims against you, just against the person who gave him the checks. However, based on the way checks are used and the common practice and the legal systems we are aware of, we believe that a check should be treated like a promissory note (see Pitchei Choshen, Halva’ah 13:(21)). Therefore, one may not cancel a check, once it has been given for use, except to prevent its illegal use. You feel that your neighbor is in effect doing just that by not following the conditions you set out. We cannot investigate why he is not following your agreement, whether he still deserves your help (perhaps he needs more help), or whether you can be morally expected to provide that help. We will deal just with legality.
Regarding checks that Reuven gave to Shimon before you ended the arrangement, you are obligated to honor the checks. Firstly, it was, at the time, legal use of the checks and obligates you. Also, you apparently wrote the checks as a means of getting Shimon and others to give Reuven products on credit. In other words, your promise to pay his bills secured a loan for Reuven. This makes you into an arev kablan (see Bava Batra 174a), a strong type of guarantor (usually a guarantor pays only if the borrower defaults). While the Shulchan Aruch (CM 131:1) says that a guarantor can back out, that is only before the loan takes place (otherwise, it is not a guarantee at all).
In regard to checks that Reuven used after you told him to stop doing so, the matter is complicated. He, in effect, stole your checks to give them to an unsuspecting Shimon. The general rule is that if a buyer did not have reason to suspect he was buying a stolen object, when the owner comes to retrieve it, the owner has to reimburse the buyer for what he spent on the item (Bava Kama 115a; Shulchan Aruch 356:2). This practice was instituted to prevent uncertainty in the markets (takanat hashuk). Thus, at first glance, the takana would require you to pay Shimon for the money he lost by accepting your check. (If your check was used to pay past debts, the takana does not apply (ibid. 6).) The takana does not usually apply to stolen documents (Shach, CM 50:7), but it does apply to a mamrani (equivalent to an open check) (ibid.). On the other hand, the takana requires payment before one extracts his object from the buyer. It apparently does not stop you, the owner of a bank account, from preventing Shimon to extract money from you based on a stolen check (Pitchei Choshen, Geneiva 3:(22); see Shach 356:4). Other legal and moral factors may play a role here, but we have set out the basic principles.
