First off, DON'T TOUCH THE TRACTOR ! Right now it's still his tractor until you hear otherwise from him or your bank so I wouldn't touch it, drive it or lay one wrench on it until you get that figured out.
You're leaving us in the dark on the tractor. Is this a five year old tractor or a fifty year old tractor? Makes a big difference in the expectation of performance but common sense tells anybody a used tractor without factory warranty has no expectation of working like new so it's up to the buyer to inspect it thoroughly before he writes the check.
On most older tractors with an independent pto, pto creep is a common thing and for the most part not worth the trouble to fix. Usually once you attach a shaft to the pto, the drag of the implement will be enough to stop the shaft from turning until it is engaged. Keep in mind you should ***ALWAYS*** shut off your tractor to connect a pto shaft anyway so a turning shaft while running is a non-issue. What is his next issue going to be? Seat springs are too soft? Tires are leaking air? Used tractors are "AS IS" and it's buyer beware. He should have looked it over more carefully before he wrote the check.
That being said, if he stopped payment on the checks, at least you still have the tractor and don't have to go looking for it. If it becomes your tractor again, I'd be sure to check everything over good and make sure he hasn't damaged anything internally such as gears or hydraulic pumps etc. or he will owe you money for the repairs. Be sure to document any findings.
Or... maybe he still wants the tractor but expects you to fix the pto? Won't know until you talk to him, right? Again, he should have looked it over better but if you agree to fix it for him he should cover the repair bill unless you promised a 100% working tractor which you would be foolish to make any such claims on a used machine. If you want to fix it for him out of your own pocket because your a nice guy then that's your business but I wouldn't be made to feel that you are contractually obligated. Usually with these types of guys, if you fix one thing for him, you've just opened Pandora's box and in a way agreed it was your obligation to fix it and he'll be back time and again with other repairs with the same line of thinking.
This is why cash is king. If he has money in the bank to make the check good then he can take his own check to the bank and exchange it for the cash. The first check being for a down payment should have been to seal the deal until he comes up with the additional funds and be communicated that it is non-refundable. If he's worried about you taking his money then you can both sign a bill of sale with a description of the tractor, serial number, the dollar amount, signed and dated by both parties. Then he has something to hold you accountable for if you sell the tractor to someone else or you take his cash and run. Also gives you something to hold him accountable for in that you have in writing that he owes you X dollars for the balance of the funds and you should also have a due date for the balance so he doesn't leave you waiting for the rest of your cash for months instead of weeks or whatever it is you agreed to in your terms.
Another thing I might say is you took a check for the down payment and a second check for the balance upon delivery of the tractor but cashed both checks at the same time. You should have cashed the first check immediately and not delivered the tractor until the first check cleared. At least then you have some leverage to hold him to the deal. Right now you got squat but at least you have the tractor and aren't out anything unless he damaged something. Lesson learned. Back to the cash thing. If he squeals about carrying around cash, you could also have him get a cashier's check so you get your funds immediately.
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Today's Featured Article - Restoration Story: Fordson Major - by Anthony West. George bought his Fordson Major from a an implement sale about 18 years ago for £200.00 (UK). There is no known history regarding its origins or what service it had done, but the following work was undertaken alone to bring it up to show standard. From the engine number, it was found that this Major was produced late 1946. It was almost complete but had various parts that would definitely need replacing.
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