2006 New York Code - Payment Or Satisfaction.

 
  Section 3--603. Payment or Satisfaction.
    (1)  The  liability  of  any  party is discharged to the extent of his
  payment or satisfaction to the  holder  even  though  it  is  made  with
  knowledge of a claim of another person to the instrument unless prior to
  such payment or satisfaction the person making the claim either supplies
  indemnity  deemed adequate by the party seeking the discharge or enjoins
  payment or satisfaction by order of a court of competent jurisdiction in
  an action in which the adverse claimant and the holder are parties. This
  subsection does not, however, result in the discharge of the liability
         (a) of a party who in bad faith pays or satisfies  a  holder  who
             acquired  the  instrument  by theft or who (unless having the
             rights of a holder in due course) holds through  one  who  so
             acquired it; or
         (b) of  a  party (other than an intermediary bank or a payor bank
             which is not a depositary bank) who  pays  or  satisfies  the
             holder of an instrument which has been restrictively indorsed
             in a manner not consistent with the terms of such restrictive
             indorsement.
    (2) Payment or satisfaction may be made with the consent of the holder
  by  any  person including a stranger to the instrument. Surrender of the
  instrument to such a  person  gives  him  the  rights  of  a  transferee
  (Section 3--201).