Don't worry. You can't really prove the verbal contracts before the police were involved, but they failed to uphold their end of the contract after they were involved, which is verifiable.
Here is a thread made by Sythe that is somewhat linked to your situation.
http://www.sythe.org/showthread.php?t=940339
You and the owner of the computer entered into a social contract. There was an agreement made by both parties but it wasn't necessarily written down. As the police know you sold the laptop, your best bet would be to have them contact the person you sold it to, and have them retrieve it for the $400 you received from them, as it was not your property. In a sense, you did have ownership of it as they had not paid you $160, but that did not mean you had the right to sell it, as they had not signed anything or agreed that you would be able to do so had they not paid the bill.
From here, that's all I can see you doing. In court, you will most likely have to reimburse the party for the cost of the laptop (by its retail value today), but the $160 they owed will be deducted from that and taken into cosideration as well. (Don't forget the police are your witness, as they verbally verified the payment of $160 by said Wednesday.) If you would like to fully win this, you would have to get a lawyer and make an attempt to counter-sue, which would be interesting regarding your situation.
I wish you the best of luck. Hopefully you won't lose much from this, but if there's one thing I can say, don't be greedy.
You said they never signed anything, no paperwork, nothing....
Make them prove you ever had their property in the first place, then go from there.
I like this idea. But I don't think I'd have the courage to be quit in court.
Court is Nov 9th. I'll tell you guys what happens.
The laptop was not yours to sell and you can not add terms to a verbal agreement after the fact, especially ones imposed by yourself unless you previously protected your right to do so somewhere your verbal agreement.
You handled the situation incorrectly and although you did have just right to sue for the amount owed to you via the verbal agreement, you did not have the right to sell his laptop.
I'm being sued and if anyone knows something about law I would appreciate their advice.
Let me explain the situation:
During the summer I was fixing my friend's BF's computer. He's a 15 year old kid but I was cool with him. His laptop had a broken screen. I charge $60 for the labor and $100 for the part. I take the computer and fix it within a few days.
I remind him weekly that his laptop is ready and he needs to pay for it. After three weeks I tell him that if he doesn't pay I'm going to sell it on eBay. A week passes and I tell him that it's sold. I didn't actually sell it I only told him that. His family flips out and calls the police, his mom threatens me ect. I don't talk to her or the police. I tell them not to call me back and hang up on them.
About two weeks later. Police knock on my door. Being a decent person I told the police I will still give them back the laptop once they pay the $160 that they owe me. I get a call from the police and say that they will pay on Wednesday. Two Wednesday's later I sell the laptop on craigslist for $400.
Another week later the police come to my house and ask for the laptop. I told them that I sold it. They ask for my identification and told me I would probably be sued. A couple week later I got papers to appear for court.
Does anyone have any advice so I can win this court case?

