
    Aaron E. Katz, Respondent, v. Walter K. Freeman and Thomas J. Mooney, Defendants, Impleaded with William A. Tobias, Respondent, and Lee Monsheimer and Others, Appellants.
    First Department,
    June 15, 1906.
    Receiver pendente lite—when compelled to account on dismissal of complaint — principal and agent.
    A receiver wlio holds propertypendente lite should "be compelled to account when the complaint has been dismissed as to all defendants entitled to the property. This is so, although a defendant who was only an agent of the other defendants is still defending, and sets up a counterclaim against the plaintiff for damages sustained by reason of the destruction of a contract under which he was entitled to sell the property at a fixed price and to retain all that he , received in excess thereof.
    Appeal by the defendants, Lee Monsheimer and others, from an order of the Supreme Court, made at the New York Special Term and entered ill the office of the clerk of the county of New York on the 24th day of April, 1906, denying a motion to compel a receiver appointed pendente lite to account.
    
      Milton M. Goldsmith, for the appellants.
    
      Levin L. Brown, for Edwin T. Graves, receiver, respondent,
    
      Wilson Randolph Yard, for the respondent Tobias.
   McLaughlin, J.:

This action was commenced to obtain an injunction restraining the defendants from disposing of a machine plant. A receiver was appointed pendente lite. The machine plant, at the timo of the commencement of the action, was in possession of the defendant Tobias, who was acting as the agent of the defendants Monsheimer and Freeman to sell the same. The receiver sold the plant and realized, including moneys turned over to him by Tobias, a little over $5.000. The defendants Freeman, Waller, Goldsmith and Monsheimer demurred to the complaint and their demurrers were sustained, and a judgment entered dismissing the complaint as to them. The defendant Tobias interposed an answer in which he set up a counterclaim for $2,000 damages alleged to have been sustained by reason of the acts of the plaintiff in bringing the action, which, according to his contention, destroyed an agreement, under the terms of which he was authorized to sell the plant for $4,500, and to have all he received for the same in excess of that amount. Subsequently a motion was made to discharge the receiver and for an accounting. The motion was denied, and it is from this order that the appeal is taken.

I am of the opinion the motion should have been granted. According to the moving papers, and the fact does not seem to be disputed, the defendants Freeman, Monsheimer, Waller and Goldsmith aré the only persons interested in the funds held by the receiver. The defendants Mooney and Doe do not appear to have had any interest, and the defendant Tobias was merely an agent employed by Monsheimer and Freeman to sell the plant. As between the plaintiff and the defendants Freeman, Monsheimer, Waller and Goldsmith the action has been finally determined, and therefore, there is no reason why the receiver should not account and be discharged. The fact that the defendant Tobias has interposed a counterclaim against the plaintiff is of no importance so far as the question here presented is concerned. lie does not claim anything against the other defendants, and if he did, his claim would be unavailing, because he did not serve a copy of his answer upon them prior to the determination of the demurrers and the entry of the judgment thereon. Besides, the relief which he asks is not against the defendants, but against the plaintiff for depriving him of the benefit of the contract to sell the plant and receive the proceeds, after deducting the costs and expenses of the sale, in excess of $4,500. According to the record on appeal such proceeds will not exceed $4,500. Therefore, Tobias, under his agreement, has no interest in the fund, and the claim which lie has, if any, is reduced solely to the one against the plaintiff for destroying his contract. The fact that he has this claim, or has interposed a counterclaim to enforce it, is no reason why the other parties should be deprived of property to which they are justly entitled. This being so, the receiver should account and pay over the moneys held by him to the parties entitled thereto.

The order appealed from, therefore, should be reversed, with ten dollars costs and disbursements, and the motion granted, with ten dollars costs, to the extent of directing the receiver to account for his acts and proceedings as such and pay over the moneys held by him, after deducting his fees and the expenses of the receivership, to the persons legally entitled thereto.

O’Brien, P. J., Ingraham, Clarke and Houghton, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs, to the extent indicated in opinion. Settle order on notice.  