A person accepts money to write a check, but cancels the check and refuses to return the money

Question

In the state of NM if a family member in need of a muzzle accepts 500$ to write a check for rent and cancels the check after its already been turned in, and then refuses to return the 500$, is this illegal? Can they be dealt with or is it outside of the law?

Answer 1

if a family member in need of a muzzle accepts 500$ to write a check for rent and cancels the check after its already been turned in, and then refuses to return the 500$, is this illegal?

Yes, it is illegal.

Admittedly the presumption pointed out by Greendrake is new to me. However, the act of issuing a check may evidence the family member's intention to create a legal relation, thereby defeating the presumption otherwise (?) applicable to family agreements. Subsequent regret (as reflected by withdrawal of the check) does not negate the contract elements of offer and acceptance, especially if the family member received the $500 before canceling the check.

Regardless of the payer's ability to prove the existence of a contract, the matter seemingly meets the prima facie elements of both fraud and promissory estoppel if the payer proves his reliance on the family member was reasonable. That is because the family member received the amount and now refuses to return it (with no apparent justification).

For the elements of promissory estoppel, see Havens v. C & D Plastics, Inc., 124 Wn.2d 158, 171-172 (1994):

(1) [a] promise which (2) the promisor should reasonably expect to cause the promisee to change his position and (3) which does cause the promisee to change his position (4) justifiably relying upon the promise, in such a manner that (5) injustice can be avoided only by enforcement of the promise.

As for fraud, see McNulty v. Chip, 116 A.3d 173, 182-83 (R.I. 2015):

the plaintiff must prove that the defendant made a false representation intending thereby to induce [the] plaintiff to rely thereon and that the plaintiff justifiably relied thereon to his or her damage.

Because of the amount at issue is lower than $10,000, this would have to be litigated in small claims court.

Although I am not reading the actual court opinions of the cases listed on Wikipedia (see the other answer), their summaries seem inapplicable here also from the standpoint of mutual, reciprocal benefit between the parties. For instance in the Balfour v. Balfour case, the husband was not receiving any consideration from the wife at all.

Answer 2

Because that was a family member, presumption of no intention to create legal relations applies — unless there was an evidence of the opposite (e.g. a written agreement).

On the face of it, there was no written agreement or other evidence of intention to create legal relations. Therefore, there is no enforceable contract, and the person cannot be dealt with in legal terms.

Answer 3

Under an unjust-enrichment theory (pursued in small claims court), the check-writer would need to show why they should be allowed to keep the $500. This avoids the contract law problems attached to assuming that a familial interaction is contractual. Demonstrating fraud might be possible, if the check-writer never intended to write a cashable check, but coming up with evidence to show that would be tricky.