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Q: Legal issues regarding payment in error. ( Answered 5 out of 5 stars,   1 Comment )
Subject: Legal issues regarding payment in error.
Category: Business and Money > Accounting
Asked by: thefuzz81-ga
List Price: $10.00
Posted: 14 Jul 2006 10:35 PDT
Expires: 13 Aug 2006 10:35 PDT
Question ID: 746339
I recently changed jobs, and upon leaving my old job I received my
final paycheck. Now, two weeks later, my old job accidently deposited
my usual pay (as if I was still working there) via direct deposit. I
called and informed them of the error and it was promptly reversed. My
question is: What if I had kept the money? What could happen? Am I
legally obligated to let them know? For legal reference I am in San
Subject: Re: Legal issues regarding payment in error.
Answered By: weisstho-ga on 16 Jul 2006 09:50 PDT
Rated:5 out of 5 stars
Dear Fuzz,

Thanks for a truly interesting question!

What with the Bar Exam happening in all states in another two weeks,
your question would fit very nicely on the Multistate portion of that

Bottom Line?  Yes, you were legally obligated to let your ex-employer
know. Failure to let them know could have resulted in criminal and
civil liability.  My brilliant and charming colleague, Pinkfreud, has
hit one nail on the head with her comment below. Here is the rest of
the story:

Firstly, there are two separate inquiries:  Criminal implications and
Civil remedies available to the employer.

As to Criminal Law:  a ?larceny? is a ?trespassory taking and carrying
away of the personal property of another with intent to steal it or
create a risk of permanent deprivation.?

OK ? was there a ?trespass??  A delivery to another by mistake, where
the defendant (you) exploits an error known to you, for financial
gain, makes you guilty. The law imputes a duty to notify the true
owner once you did know, or should have known, of the financial gain.
However, if you did not know, there is no trespass and, hence, no
larceny. You fulfilled your duty of notification ? but had you not ?
you could have been prosecuted for larceny.  The technical side of
this is that you did not ?take and carry away? the money (?personal

Clearly, had you taken the money ? that would give the prosecuting
authority an argument that you intended on ?stealing? it ? to
permanently deprive the true owner of that money (the ?Animus
Furandi.?) This ?permanent deprivation? is the key.  Under the Common
Law, here is an interesting scenario:  ?D? walks by Vic?s garage and
sees a boat. Hmm, D thinks ? I would like to go boating, so he takes
his truck, backs it up to the garage and hooks up the boat, fully
intending to use it and return the boat back when he is finished. Had
there been a common law larceny?  NO, since he did not intend to
permanently deprive Vic of the boat.  Now, most states have modified
the common law (including California) and obviously taking someone?s
boat would result in some charge ? but probably not larceny. This is
where the charge of ?joy riding? came from where a kid takes someone?s
car for a ride and abandons it ? no intent to steal, so they come up
with another charge:  Joy Riding.

Had you moved the money from the account, you could have been charged
with some California flavor of Larceny.

As to Civil Law:  the applicable theories are both intentional torts,
and those theories are Conversion and Trespass to Chattel. A person
who takes another?s property permanently has committed a Conversion;
if there is only a temporary deprivation (the boat example above) and
the true owner has the property returned, it is a trespass ? chattel
just means ?personal property.?  You would be responsible for
restitution or other damages incurred by the plaintiff.

Again, thanks for the question.  Always good for a civil litigator to
get a little brush-up on the criminal law.

Any questions?  Hit the CLARIFICATION button. 



Source:  Dusty law school notes
Trespass to Chattel
thefuzz81-ga rated this answer:5 out of 5 stars
Nicely answered. Thank you!

Subject: Re: Legal issues regarding payment in error.
From: pinkfreud-ga on 14 Jul 2006 10:42 PDT
"Under CA law the employer has three years from the date of discovery
of a payroll overpayment to sue for reimbursement. Estoppel does not

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