The facts set out in the bill and answer, which are found to be true by a single justice of this court in the report and reservation, so far as they are material to the issue now presented are as follows: On July 21,1920, the Cosmopolitan Trust Company issued a certificate of deposit in the sum of $15,000, payable to Hugh J. Dimond and Company or order in current funds upon the surrender of the certificate. This instrument was indorsed by the payee to the plaintiff, the National Surety Company, on August 3, 1920, to hold as collateral security for its undertaking as surety on a bond for $15,000 filed and approved on that day, to dissolve an attachment in a pending suit in equity against Hugh J. Dimond and Company and others. The suit against Hugh J. Dimond and Company was settled and the plaintiff in this action on January 18, 1922, paid in satisfaction of the decree $1,750.
On September 25, 1920, the commissioner of banks, acting by virtue of the provision of St. 1910, c. 399, took possession of the property and business of Cosmopolitan Trust Company, and as such commissioner is still engaged in administering the affairs of said trust company. On June 21, 1921, the commissioner applied the certificate of deposit in question as a set-off on the unsecured indebtedness of over $325,000 of Hugh J. Dimond and Company, he then having had no notice of any claim of the plaintiff. It is agreed that Hugh J. Dimond and Company was adjudicated bankrupt in August, 1921. The plaintiff petitions for leave to prove its claim arising under the certificate of deposit against the Cosmopolitan Trust Company. The single justice found “The claim is to be considered as if seasonably filed.” The question presented for decision is whether the plaintiff can prove against the Cosmopolitan Trust Company the face value of the certificate *220of deposit and receive in the distribution of its assets among its creditors a dividend thereon, if such shall be decreed, in amount up to its claim of $1,750 against Hugh J. Dimond and Company; or whether its right to prove the certificate of deposit in the settlement of the affairs of the Cosmopolitan Trust Company is a right to prove and receive a dividend only on the sum $1,750 owed to it by Hugh J. Dimond and Company, the payment of which the certificate of deposit was given to secure.
The certificate of deposit is a negotiable instrument and is not overdue until after demand for payment is made. Shute v. Pacific National Bank, 136 Mass. 487. Hunt, appellant, 141 Mass. 515. Schmidt v. People’s National Bank, 153 Mass. 550. Pierce v. State National Bank of Boston, 215 Mass. 18. Morse on Banking (5th ed.) § 299, and cases cited. G. L. c. 107, §§ 23, 26,32. The particular certificate of deposit, when indorsed by the payee to the order of the plaintiff, was regular on its face, was not overdue, and was taken by the plaintiff in good faith for value and without notice of any infirmity in the instrument or defect in the title of the payee and indorser. In these circumstances the plaintiff would be a holder for value, St. 1898, c. 533, § 52; G. L. c. 107, § 75; and as such could enforce the certificate obligation against the Cosmopolitan Trust Company or prove the debt evidenced thereby through any appropriate legal action or in any equitable proceeding for the winding up and liquidation of the Cosmopolitan Trust Company, free from defences available to prior parties among themselves, and could require payment of the instrument for the full amount thereof against the trust company and all parties liable thereon — St. 1898, c. 533, § 57, G. L. c. 107, § 80 — were it not for the rule that the holder of a negotiable instrument taken as security, or as a lien for the payment of some debt or obligation of a pledgor, is deemed a holder for value only to the extent of his lien. St. 1898, c. 533, § 27. G. L. c. 107, § 50. Burnes v. New Mineral Fertilizer Co. 218 Mass. 300, 303. The lien of the plaintiff on the $15,000 certificate of deposit is $1,750. The plaintiff consequently is a holder in due course of the certificate to the extent of $1,750; and the defendant, after the payment of $1,750, has the same rights of defence, including set-off, against the payment of any further sums as it would have if it were sued by the payee.
*221The plaintiff in any form of procedure should not be permitted to recover against the Cosmopolitan Trust Company on the certificate of deposit a sum of money by way of dividend thereon or otherwise, to the use of Hugh J. Dimond and Company, above the $1,750, the right of the Hugh J. Dimond and Company to such surplus dividend or payment being subject to all defences, including set-off, of the Cosmopolitan Trust Company. Parish v. Stone, 14 Pick. 198, 208. Chicopee Bank v. Chapin, 8 Met. 40, 44.
It results that the certificate of deposit shall be received by the commissioner of banks for proof against the Cosmopolitan Trust Company, that any dividend declared thereon up to $1,750 shall be paid to the plaintiff, the National Surety Company, or to its order, and that any smplus dividend shall be held by the commissioner to the use of Hugh J. Dimond and Company or to the use of its trustee in bankruptcy, but subject to all defences of the Cosmopolitan Trust Company.
Decree accordingly.