I agree with Mr. Justice Dowling that the $5,000 held under the contract between the sub-contractor and defendant was so held specifically as a fund to insure the contracts against the two contingencies especially provided for by the assignment, neither of which contingencies has happened. Consequently, that deposit should be ignored in this discussion, and the case considered as if no such reservation had been made.
What we should have then would be the simple case of the assignment to plaintiff of an amount still remaining unpaid by the defendant to Gabriel Brothers, plaintiff’s assignor, and the attempt to set up against the collection of this amount by the assignee, a claim against Gabriel Brothers, the assignor, not existing at the time of the assignment to plaintiff. This, as it seems to me, brings the case squarely outside section 502 of the Code of Civil Procedure, and subdivision 3 of section 41 of the Personal Property Law (Consol. Laws, chap. 41; Laws of 1909, chap. 45), which re-enacted section 1909 of the Code of Civil Procedure. By section 502 in a case like the present, a demand existing at the time of the assignment, and belonging to the defendant in good faith before notice of the assignment, must be allowed as a counterclaim, and by section 1909 as re-enacted {supra), an assigned demand may be enforced “ subject to any defense or counter-claim, existing against the transferrer, before notice of the transfer, or against the transferee.”
In each case the test as to whether or not a cross demand may be asserted against the assignee of a claim is whether or not the cross demand existed at the time of the transfer, or of notice thereof.
In the present case the assignment to plaintiff was made on October 9, 1912, and notice thereof given to defendant on October 17, 1912. At that time the claim now sought to be interposed as a counterclaim had not arisen, and it did not arise for months afterwards. It is true that the assigned claim did not become collectible until after the claim which it is sought to interpose as a counterclaim had arisen. This was not, however, because the $5,000 was not owed by defendant, but because its payment was deferred for reasons having no relation to this controversy. That I think makes no difference. The test pre*472scribed by the Oode and the Personal Property Law is not when the assigned claim is collectible, but when the assignment was made and notice thereof given. By that test the counterclaim cannot be allowed. (Michigan Savings Bank v. Millar, 110 App. Div. 670; affd., 186 N. Y. 606; Siebert v. Dunn, 157 App. Div. 387.)
In my opinion the judgment should be affirmed, with costs.
Judgment reversed, new trial ordered, costs to appellant to abide event. Order to be settled on notice.