The opinion of the court was delivered by
On Nоvember 9th, 1931, the commissioner of banking and insurance of this state took over the Singac Trust Comрany, a banking corporation of New Jersey, and proceeded to liquidate same for the benefit of its creditors. Among the assets of this institution, the commissioner found a note of thе defendants, then in default, and on April 11th, 1932, suit was started for its collection.
The defendants filed an аnswer and counter-claim. Both were stricken out by the trial court and judgment entered in favor of the plaintiff.
The defendants appeal from the judgment entered on the ground that it was error to have stricken the counter-claim. The counter-claim amounts to this: The defendants, between March 14th and April 2d, 1932, procured the assignment to them of some twenty accounts of other depositors of the Singac Trust Company, totaling $3,481, exclusive of interest, and set them off in thе counter-claim against the amount they owed the bank on their note, which was about $3,800.
*101 Such counter-claim was properly stricken. The assignment of the accounts in question was aсquired after the bank had been taken over by the commissioner of banking and insurance. On the date that the bank was taken over, namely, November 9th, 1931, these depositors, who later assigned their accounts to the defendants, were merely creditors of the bank and were entitlеd, under the statute (Cf. Pamph. L. 1931, ch. 255), to pro rata participation in the amount realized through the liquidation of the bank’s assets. Natural justice would seem to require that such assignment be not recognized for, obviously, such rеcognition would create a preference in favor of the accounts so assigned. These assignors being nothing more or less than common creditors of the institution, their status, as suсh, cannot be changed by the mechanics of assignment which would, as here, create a preference.
“The general rule is that the right of set-off against an insolvent bank is governеd by the state of facts existing at the time of insolvency and not by conditions created aftеr-wards. Therefore, a debtor of the bank will not be permitted to set-off against his debt a clаim to a deposit assigned to him after its insolvency. * * *. And the receiver has no power to аllow a set-off against a debt owing to the bank when the demand sought to be set-off was assigned tо the debtor for that purpose after his appointment.” Cf. 5 Michie, lit. “Banks and Banking,” ch. 9, p. 314, § 163.
The exposition of this principle is found in Scott v. Armstrong, 146 U. S. 4-99, 511, as follows:
“The state of case wherе the claim sought to be offset is acquired after the act of insolvency is far otherwise, for the rights of the parties become fixed as of that time, and to sustain such a transfer would defeat the object of these provisions. The transaction must necessarily be held to have been entered into with the intention to produce its natural result, the preventing of the application of the insolvent’s assets in the manner prescribed. Venango National Bank v. Taylor, 56 Pa. St. 14; Colt v. Brown, 12 Cray 233.” See, also, Yardley v. Philler, 167 U. S. 344, 360; United States Fidelity and Guaranty Co. v. A. P. Wooldridge (Receiver *102 of the National Bank of Cleburne), 268 Id. 234, 237; Williams v. Rose, 218 Fed. Rep. 898, 901; Grant v. Fletcher, 283 Id. 243, 264; Springfield National Bank et al. v. American Surety Company of New York, 7 Fed. Rep. (2d) 44, 45; Kirkman v. Farmers' Saving Bank of Boyden (Iowa), 28 Id. (2d) 857, 862; Clark Car Co. v. Clark et al., 48 Id. (2d) 169, 171; Webster v. Sweat, 65 Id. (2d) 109, 110; City of Miami v. First National Bank of St. Petersburg, Florida, 58 Id. (2d) 561, 562, and many other cases.
The principle herein еnunciated has had the consideration and approval of the courts of our state. See Van Wagoner et al., Receivers of Peoples Bank, &c., v. Paterson Gas Light Co., 23 N. J. L. 283; it was recognized in Crisp v. Dunn, 56 Id. 355, although, under the situation in that case, the doctrine was inapplicable because of the condition of the record; see, also, Roseville Tr. Co. v. Barney, 89 Id. 550, and Kanter v. Security Tr. Co., 110 Id. 361.
Thus it is apparent that a mere right to participate pro rata, in accordance with the statute, in the amount realized through the liquidation of the assets of the bank, cannot be transmuted into a legal claim, good for the entire amount of the credit transferred, by the assignment of suсh credit to a debtor of the bank in liquidation, so that such debtor might set it off in full against his debt. A claim in the hands of an assignee in these circumstances has no better standing than it had in the hands of its original оwner. The claim cannot be enlarged by the talisman of assignment.
The appellants alsо argue that the counter-claim was in part valid and should have been recognized up to forty per cent, of the amount claimed thereon, since the commissioner of banking аnd insurance had been authorized on May 2d, 1932, by the Court of Chancery, to pay a dividend in that amоunt on the accounts in question. This argument on the part of the appellants is plainly an аfterthought. It was not pleaded in the counter-claim nor do we find any mention of it in the affidavit filed to support the counter-claim on the motion to strike same. In the trial court, these appellants took the position that the amount of the assigned accounts *103 should bo recognized in full as a set-off. The point, therefore, here made for the first time, that the cоunter-claim should have been recognized in such part, not having been presented to the trial court, will not be considered here.
The judgment of the court below is affirmed, with costs.
For affirmance — The Chancellor, Chief Justice, Teenchaed, Paekbe, Lloyd, Case, Bodine, Donges, Heher, Pebskie, Yak Buskirk, Kays, Hetfielb, Dear, Wells, Dill, JJ. 16.
For reversal — None.