Case Name: The Idaho-Maryland Development Company, Appellant, v. The Union Bank of Brooklyn, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1914-05-29
Citations: 162 A.D. 782
Docket Number: 
Parties: The Idaho-Maryland Development Company, Appellant, v. The Union Bank of Brooklyn, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 162
Pages: 782–784

Head Matter:
The Idaho-Maryland Development Company, Appellant, v. The Union Bank of Brooklyn, Respondent.
Second Department,
May 29, 1914.
Bills and notes — contract — agreement to pay proceeds of notes to third person —consideration.
Where a bank discounted notes for the payee and took his cheek drawn on the proceeds as collateral security for payment, agreeing to hold the check during the life of the notes or renewals thereof, and upon the payment of the notes to place the money at the disposal of a third party, a corporation, the bank cannot, upon the payment of the notes, refuse to pay to the corporation upon the theory that there was no consideration inuring to it.
Appeal by the plaintiff, The Idaho-Maryland Development Company, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Kings on the 13th day of September, 1913, upon the decision of the court dismissing the complaint, the issues having been withdrawn from the consideration of the jury by stipulation.
Hull Greenfield, for the appellant.
Rufus O. Catlin [Louis Goldstein with him on the brief], for the respondent.

Opinion:
Thomas, J.:
The respondent discounted several notes for Reiner, the payee, since deceased, and at the time received his check for $12,500 drawn on the proceeds as collateral security for their payment. As a part of the transaction the following instrument was executed by respondent's vice-president, and delivered to Reiner:
" December 16th, 1908.
"Mr. John M. Reiner:
" Dear Sir.— This is to advise you that in accordance with your instructions, we do hold $12,500 which is not to be used during the life of the notes this day discounted, nor the renewals thereof, to be placed at the disposal of the Idaho-Maryland Development Company, when the notes are paid.
" Yours very truly,
"E. J. STALKER,
' ' Vice-President. "
The notes were paid, but the defendant has resisted successfully the plaintiff's demand for the delivery of the collateral to it upon the ground, as I understand, that there was no consideration for its promise inuring to the plaintiff. But such question is irrelevant. The writing shows that the plaintiff owns the collateral, and it is the defendant's duty to pay the money to the owner. The writing is evidence that Reiner created a power of absolute disposition, in which the plaintiff is the grantee, and thereby endowed the latter with the absolute title. The same result is reached in another way. The defendant received the money to deliver upon payment of the note to the plaintiff. It is not its function to demand evidence of privity between plaintiff and Reiner, or obligation from one to the other. It is sufficient that it received the money from Reiner to deliver to the plaintiff, and, consenting to transmit, it cannot decline and keep the money itself. It affirmed the validity of the power when it received the money and cannot now question it. (People ex rel. Martin v. Brown, 55 N. Y. 180.) The principle is illustrated in Merritt v. Millard (4 Keyes, 208).
The judgment should be reversed and a new trial granted, costs to abide the event.
Jenks, P. J., Carr, Stapleton and Putnam, JJ., concurred.
Judgment reversed and new trial granted, costs to abide the event.