Legal Updates

A check filled out by an attorney and deposited against express authorization will not be honored

March 30, 2024

A lessee gave checks to the attorney of the apartment owner, an elderly woman under nursing care, for the rent, without specifying the name of the payee. A month prior the end of the lease, the lessee located a potential tenant to replace him under the agreement terms, but when he reached to get the lessor’s consent, the attorney arbitrarily refused and hurried to terminate the agreement. Although the lessee was prevented from using the apartment, the attorney filled his own name on the check for the remaining month and tried to deposit it into his personal account without authorization.

The Court rejected the attorney’s attempt to cash the check and held that the attorney acted in bad faith and without power. In the case where a conditional check is given, the holder does not duly hold the check until after the condition has been fulfilled. Only after the condition is fulfilled will the holder of the check have the right to claim on it in his own name as the holder of the banknote. Refusal to allow a specific replacement lessee should be reasonable and relevant. Here, the attorney was not a party to the lease agreement as he acted as the attorney for the owner of the apartment. Thus, every action he could have done and should have done is an action for the owner of the apartment and in accordance with a power of attorney or express permission given to the owner. The attorney refused to present the power of attorney giving him the right to deposit the funds in his personal account (as opposed to a trust account) and question marks arose regarding the authorization given to him. Because the delivery of the check was based on the condition that the check be transferred to the owner of the apartment or kept for her and this condition was not met and since the attorney acted in bad faith he is not entitled to the amount of the check.