Case Name: Thomas McCraith, Resp't, v. National Mohawk Valley Bank, Appl't
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1887-03-01
Citations: 5 N.Y. St. Rep. 728
Docket Number: 
Parties: Thomas McCraith, Resp’t, v. National Mohawk Valley Bank, Appl’t.
Judges: All concur.
Reporter: New York State Reporter
Volume: 5
Pages: 728–730

Head Matter:
Thomas McCraith, Resp’t, v. National Mohawk Valley Bank, Appl’t.
(Court of Appeals,
Filed March 1, 1887.)
1, CONTRACT TO PROCURE RELEASE OP MORTGAGE — STATUTE OP FRAUDS— Interest in land.
One James Dygert conveyed to the plaintiff certain real estate, taking back a mortgage for the purchase money. Defendant owned a prior mortgage on the premises, and Myers and Basbach also owned another prior mortgage on the same premises and other lands. The defendant requested plaintiff to pay the amount of the purchase money mortgage to it, and promised plaintiff that if he would do so it would procure for plaintiff a release of the premises from the Myers and Basbach mortgage. The plaintiff did as requested, but deferfdant failed to procure the release. Sold, the agreement was not within the statute of frauds. That it was not a contract for the sale of lands, or of any interest in lands.
2. Same — Banking corporations — Ultra vires.
An agreement by a bank to procure a release- of a mortgage held by a third person, is not primarily an agreement relating to -banking, yet when made to secure payment of a debt due the bank it is not ultra vires.
Appeal from a judgment of the supreme court, general term, fourth department, affirming a judgment of the circuit court entered on a verdict in favor of plaintiff for damages for breach of contract. .
The defendant is a duly organized banking corporation. On January 1st, 1876, one James M. Dygert conveyed certain real estate to plaintiff taking back a mortgage to secure the payment of $1,363,81. The defendant owned a prior mortgage on- the premises of $5000 and certain persons named Myers and Rasbach also owned and held another prior mortgage of about $4000 on the same and other lands. The defendant through its cashier requested the plaintiff to pay the amount unpaid on the said Dygert mortgage to the defendant, and promised the plaintiff among other things that he would procure for the plaintiff a release of the premises from the mortgage held by Myers and Rasbach. The plaintiff paid defendant $1,393.33 who failed to procure the release of tlie Myers and Rasbaeb mortgage and afterward tbe premises were sold on tbe foreclosure of tbe said Myers and Rasbaeb mortgage. This action was brought to recover damages of defendant, resulting from tbe breach of tbe agreement to procure the release.
Amos S. Prescott, for appl’t; Smith & Steele, for resp’t.
Affirming 37 Hun., 641, mem.

Opinion:
Per Curiam.
There was a conflict of evidence as to tbe circumstances under which tbe bank took tbe plaintiff's mortgage. It was claimed on the part of tbe plaintiff that tbe bank held it as collateral security for certain obligations held by the bank against Dygert, and, therefore, that it had an interest in tbe security when it was paid to the bank by tbe plaintiff. The bank, on tbe other hand, insisted that it held the mortgage simply as the custodian of Dygert, for the simple purpose of receiving payments which might be made thereon by the plaintiff. This issue was sharply contested, and was found by the jury against the defendant.
So, also, there was a conflict of evidence as to the verbal agreement alleged by the plaintiff to have been made by the defendant, through its cashier, with him, to the effect that, if the plaintiff would pay the mortgage to the bank, the bank would release their mortgage on the plaintiff's lot, and would also procure for the plaintiff a release of the Rasbach and Myers mortgage. This issue also the jury found against the defendant, and in favor of the plaintiff.
The findings of the jury upon these issues are not unsupported by evidence, and this court cannot review their decision on the facts. Upon the findings of the jury there was ample consideration for the agreement of the bank to procure a release of the Rasbach and Myers mortgage.
It must be assumed that the plaintiff paid his mortgage to the bank before maturity, upon the faith of the promise of the bank. He thereby changed his position and did what he was under no obligation to do. The agreement was not within the statute of frauds. The undertaking of the bank was original and not collateral. Prime v. Keohler, 77 N. Y. 91: Milks v. Rich, 80 id. 269, and cases cited. Nor was it a contract for the sale of lands or of any interest in lands.
"We are also of opinion that- the contract on the part of the bank was not ultra vires. The bank had an interest in securing payment of its obligations against Dygert. The arrangement with the plaintiff was an ordinary business transaction, and within the usual power of a business corporation, and although an agreement by a bank to procure a release of a mortgage held by a third person is not primarily an agreement relating to banking, yet when made to secure payment of a debt due to the bank, it cannot be said to be foreign to the purposes, or beyond the powers of the corporation.
We think there was no error in the rule of damages. The opinions in the court below are full and quite satisfactory upon all the points involved, and further elaboration is unnecessary. The judgment should be affirmed.
All concur.