
    The Borough Bank of Brooklyn, Appellant, v. Abraham Rosensweig and Another, Respondents.
    Second Department,
    November 24, 1911.
    Banking—receivership—assignment of deposit—rights of assignee — offset against debt to bank — alleged lien on fund in favor of bank —burden of proof.
    Where a bank deposit is assigned while the bank is in the hands of a receiver, the assignee has no right to hav.e the deposit applied on a note of his'held by the bank pending the receivership.- But where the bank resumes business and the deposit remains intact, it becomes the property of the assignee subject to any right the bank may have to apply the same to any indebtedness , owed to it by the assignor.
    Where in an action by the bank to recover on a promissory note of the assignee the defendant counterclaims the amount of the assigned deposit due him from the bank and the bank replies that such deposit was applicable to the payment of another note indorsed by the assignor, the burden is on the bank to establish its lien on the deposit by 'showing the due date of the note to the payment of which the deposit is alleged to be applicable. Where it fails to do so the court may find that the hen did not in fact exist.
    That defendant continued paying on his indebtedness and renewing notes therefor after the assignment of the deposit is immaterial if he continued to assert his rights thereunder. Nor is it material that the bank later came again into the hands of a receiver.
    Appeal by the plaintiff, the Borough Bank of Brooklyn, from a judgment of the Municipal Court of the city of New York, borough of Brooklyn, in favor of the defendants, rendered on the 20th day of April, 1911.
    
      Jeremiah T. Mahoney and Vincent L. Leibell, for the appellant.
    
      Meyer London, for the respondents.
   Thomas, J.:

The defendants áre husband and wife. On March 9, 1910, the husband made his promissory note for $610, payable to himself; thereupon he and his wife indorsed it, and the same was delivered to the plaintiff in renewal of a note for existing indebtedness. On January 10,1911, the holder applied thereon $143.78, the amount of the maker’s deposit with the bank, and this action, is brought to recover the balance, $467.47, with $35.30 interest. The defense is that the note is without consideration and that the plaintiff held moneys of the maker applicable to it, and he interposes a counterclaim for excess of payment. The defense is based upon the contention that the maker was the assignee of the interest of one Jaret on accQunt of an unpaid deposit with plaintiff in the sum of $540.21, and that the sum, together with interest paid after the filing of the assignment with the plaintiff, would make an excess payment of $131.25, which is the subject of the counterclaim. The plaintiff answers this by the contentions that Jaret assigned his deposit while the plaintiff was in the hands of a receiver and that it was not, could not be, accepted as an offset to defendant’s note, and that, in addition, Jaret’s deposit was to the extent of $250 applicable to the payment of a note indorsed by Jaret, and that it was so applied; that the plaintiff resumed business and later came again into the hands of a receiver, where it now is; that Jaret revoked the assignment to the defendant, and upon notice by the receiver of deposit credited to him, proved his claim therefor. The plaintiff’s further contention that Jaret did not duly assign the deposit does not accord with the duplicate written assignment (Exhibit 1), with the evidence that the other copy was filed at its date with Thompson, the manager at the plaintiff’s banking office, with the concurrent conversation with him, with the defendants’ evidence as to the consideration for the assignment,, with Thompson’s testimony of a receipt of the assignment, with the minute noted opposite the Jaret account, or with Jaret’s testimony that he made the assignment.

The first question is, what interest did the assignment carry to the assignee. It did not give him the right to have it applied on the note pending the receivership. 'But the plaintiff resumed business and the deposit remained intact and, subject to any just right of application to Jaret’s .indebtedness, became the jiroperty of the assignee, unless the parties to the assignment agreed to cancel it. . Jaret gave evidence tending to show that the parties did agree that the assignment should be returned to the assignor, which Rosensweig denied. The court has dismissed the complaint and thereby presumably found that Bosensweig was entitled to the benefit of the assignment, and the dismissal of the counterclaim is not necessarily inconsistent therewith. If Bosensweig was entitled to the application of the deposit on the note, the next inquiry is whether the right was subject to the deduction of Jaret’s indebtedness. The evidence does not show when the note indorsed by Jaret was due.

The plaintiff claiming the hen was bound to establish it by showing the due date of the note. It is true that the claim was made at the time of the first presentation of the assignment, but it was hot substantiated by proof. Hence the court was justified, in finding that the lien did not exist. It is true that the defendant continued paying on his indebtedness and renewing notes therefor to the time of giving the note in suit, but he states that he also continued to assert his rights under the assignment, and so the matter stood at the date of the second receivership. Therefore the defendants were entitled to offset the Jaret deposit. The amount claimed by plaintiff is $502.77, which is more than met by the amount of the Jaret deposit, $540.21. The plaintiff has been overpaid, and although the counterclaim for the excess has not beep allowed, the defendant has not appealed.

The. judgment should be affirmed, with costs.

Jenks, P. J., Burr, Carr and Woodward, JJ., concurred.

Judgment of the Municipal Court affirmed, with costs.  