
    William M. Fliess, Individually and as Sole Surviving Executor, etc., of William M. Fliess, Deceased, Appellant, v. Robert T. Hoy and Others, Defendants, Impleaded with Anna T. Fliess Bronson (Formerly Anna T. Fliess), Individually and as Executrix, etc., of Ange Post Fliess, Deceased, and Others, Respondents.
    First Department,
    May 3, 1912.
    Pleading — action by executor for accounting — answer — counterclaims alleging ownership in property claimed to belong to estate — counterclaims demanding relief demanded by complaint and setting up action on behalf of corporation.
    In an action by an executor of his father’s estate asking the dissolution of a stock company and a determination as to the ownership of the stock and assets, which were left by the testator absolutely to the plaintiff’s mother who subsequently by will left a portion thereof to the plaintiff and other portions to his two sisters, in which action the plaintiff demands an accounting by the executors of his father’s and mother’s estates, it is a good counterclaim for the defendant sisters to allege that portions of the fund constituting the assets of the company were legaeies received, by them and intrusted to the testator, their father, for investment for their benefit, and demanding that the plaintiff as executor account therefor. Such counterclaim is connected with the subject-matter of the plaintiff’s action and tends to diminish or defeat his recovery.
    But the defendants cannot set up as a counterclaim a cause of action for an accounting by the executors of their mother where the plaintiff . demands the same relief; nor can they set up as a counterclaim a representative action on behalf of the corporation which was organized to take over then father’s business as it is not connected with the subject-matter of the plaintiff’s action.
    A demurrer to a whole counterclaim which in fact embraces three counterclaims is properly overruled if one of the counterclaims be proper.
    Appeal by the plaintiff, William M. Fliess, individually and as executor, etc., from an interlocutory judgment of the Supreme Court in favor of the defendants, entered in' the office of the clerk of the county of Hew York on the 18th day. of January, 1912, upon the decision of the court, rendered after a trial at the Hew York Special Term, overruling the plaintiff’s demurrer to counterclaims set forth in the amended answer of certain of the defendants.
    
      William W. Mumford, for the appellant.
    
      Abraham Benedict, for the respondents.
   Miller, J.:

The real issue in this case has to be extricated from a mass of verbiage, but it may be briefly stated. The plaintiff’s testator, William M. Fliess, was the president and sole manager of the Hollywood Company, a joint stock association. He maintained bank accounts in the name of William M. Fliess & Co. and had a safe deposit box rented in that name wherein he kept securities. He died leaving a last will and testament by which he gave all his property to his wife, Ange Post Fliess. Later she died, leaving a last will and testament by which she divided the shares of the said Hollywood Company among her three children, the plaintiff and her daughters, Anna T. and Ange, giving one-half to the plaintiff and one-quarter to each of the daughters. She divided her residuary estate equally among said three children. The plaintiff claims -that she was the beneficial owner of all the shares of the Hollywood Company and that the hank accounts kept in the name of William M. Fliess & Oo. and the securities deposited in the safe deposit box, rented in that name, belonged to and were a part of the assets of the Hollywood Company, and that, therefore, the half interest in the stock of the Hollywood Company, bequeathed to him by his mother, will carry with it a half interest in said .securities and bank accounts. The defendants, on the other hand, claim that the said William M. Fliess, Sr., was the beneficial owner of the shares of the Hollywood Company and that the securities and bank accounts, kept by him in the name of William M. Fliess & Co., were his individual property and not a part of the assets of said company. The plaintiff asks for a dissolution of the said company, a determination of the ownership of its shares of stock and an accounting between its members and a distribution of its assets, and an accounting by the executors of William M. Fliess, deceased, and by the executors ' of Ange Post Fliess, deceased. It may not be amiss to remind the parties that, irrespective of who was originally the beneficial owner of the bank accounts and securities in the safe deposit box, the intention of the testatrix, by whose will they were finally bequeathed, is not to be overlooked in determining what disposition she made of them.

The counterclaim is said to embrace three counterclaims: 1. A cause of action for an accounting by the executors of Ange Post Fliess; 2. A cause of action for ah accounting by the plaintiff as executor of his father for moneys belonging to the plaintiff’s sisters and intrusted to the father for investment; 3. A representative action on behalf of the corporation, the Hollywood Company, which was organized after the death of Ange Post Fliess, to compel the plaintiff as president to account to the corporation for certain alleged wrongful acts. Manifestly, the first cause of action is not a counterclaim to the plaintiff’s cause of action, which is for the same relief. It is equally manifest that the third cause of action cannot be set up by way of counterclaim in this action. We think, however, that the facts stated under the second head do constitute a counterclaim.

The respondents allege that during the lifetime of the father the two daughters received legacies amounting to $8,700, which sum was intrusted to him for investment, and was invested by him in' the purchase of forty-three and one-half shares of the Hollywood Company for each daughter. The respondents ask that the plaintiff as executor of the father account therefor. The question is whether those facts constitute a counterclaim Within the meaning of section 501 of the Code of Civil Procedure. A cause of action is stated against the father, and hence against his. representative, the plaintiff. It is connected with the subject of the action, i. e., the stock of the Hollywood Company. Does, it tend to diminish or defeat the plaintiff’s recovery ?

The plaintiff claims that all the shares of the Hollywood Company belonged to the mother and asks that a determination of the ownership thereof be made as between her legatees and her executors and the executors of. the father. The respondents assert that eighty-seven shares belonged neither to the father nor to the mother, hut were held by the father as agent or trustee for the two daughters. The counterclaim, therefore, does tend to diminish or defeat the plaintiff’s recovery. It diminishes pro tanto the subject of the main dispute. The respondents were called upon to assert their ownership of said eighty-seven shares, and it was necessary for them to ask affirmative relief. We think, therefore, that the facts stated under the second' head do constitute a counterclaim within the meaning of section 501 of the Code- of Civil Procedure, and that as the demurrer was to the whole counterclaim as pleaded, it was properly overruled.

The interlocutory judgment should be affirmed, , with costs, with leave to the plaintiff to withdraw demurrer and to reply, on payment of costs in this court and in the court below.

Ingraham, P. J., McLaughlin, Laughlin and Clarke, JJ., concurred.

Judgment affirmed, with costs, with leave to plaintiff to withdraw demurrer and to reply on payment of costs.;  