The case of Security Trust Company v. Dodd, Mead & Co in 1898 involved a dispute over the payment of promissory notes. The plaintiff, Security Trust Company, had purchased these notes from a third party who originally obtained them from the defendant, Dodd, Mead & Co., as part of a business transaction. When the company refused to pay upon maturity of these notes arguing that they were not legally enforceable due to fraud in their inception by said third party and lack of consideration on part of Security Trust Company; this led to litigation. In its decision, the Supreme Court ruled in favor of Dodd, Mead & Co., stating that there was indeed no legal obligation for them to honor those promissory notes since they were procured under fraudulent circumstances initially and also because there was insufficient evidence proving any direct contractual relationship or exchange between themselves and Security Trust Company which could establish valid consideration for enforcement.

The dissenting opinion in the case of Security Trust Company v. Dodd, Mead & Co argued that the majority's decision was flawed because it failed to consider the nature and purpose of a trust receipt transaction. The dissenting justices believed that such transactions were not intended to create an absolute ownership interest in goods for the lender, but rather served as security for loans. They contended that treating these transactions as sales would undermine their function and could have negative implications for commercial law more broadly. Furthermore, they disagreed with the majority's interpretation of New York law on this issue, arguing instead that state law did not support treating trust receipts as conveying full ownership rights to lenders.