(after stating the facts as above). Had the lessors stood outside the suit, we do not see how the court would have had summary jurisdiction. It could not have rested upon contempt, because the lessors got possession of the checks under the agreements of December, 1922, which expressly gave them that right, and prescribed that, notwithstanding, the parties should stand as of April 20, 1921, the date when the comptroller acknowledged liability. It was no contempt to assert a claim of title against the funds in the comptroller’s hands, if one did nothing more. Again, we cannot see how the money was part of the estate, of which the receiver had either possession or title, if title is óf any consequence. On April 20, 1921, the receiver had no possession, and, as his petitions now disclose, his only rights were those of an implied beneficiary.
In such a situation a receiver must bring a plenary suit, even if it may be ancillary; he may not proceed summarily. This is a well settled rule. Parker v. Browning, 8 Paige (N. Y.) 388, 35 Am. Dec. 717; Wheaton v. Daily Telegraph Co., 124 F. 61, 59 C. C. A. 427 (C. C. A. 2); Dold Packing Co. v. Doermann, 293 F. 315, 331 (C. C. A. 8); Horn v. Pere Marquette Ry. Co., 151 F. 626, 628 (C. C.). The same principle appears in the refusal of a court to grant a writ of assistance against one not a party to a bill of foreclosure. Terrell v. Allison, 21 Wall. 289, 22 L. Ed. 634; Thompson v. Smith, 1 Dill. 458, Fed. Cas. No. 13,977. However, it has always been laid down at the same time that if the third person, who is in possession of the res, is made a party to the suit, the receiver may proceed by intervening petition. Whether the plaintiff may, as the phrase runs, “extend the receivership” to him, is at times a difficult question. Here it is not. The lessors -have chosen, for reasons satisfactory to themselves, to intervene pro interesse suo; that intervention was in no way limited, and it brought them as parties into the cause for any controversies which might arise between them and the receiver.
The next question is as to whether the merits are foreclosed by anything which occurred in the state courts. There were three proceedings in each case, the certiorari and the first and the second mandamus. The certiorari was begun in the name of the lessor, as relator, and while, in fact, promoted by the defendant, did not in any way affect to determine this controversy between it and the relator. It could not, because the pleadings did not raise such- a question, nor did the evidence disclose that it existed. Indeed, it did not exist; the defendant not being in default on its covenants until long after the eertioraris were commenced, and indeed not until after they were ended. If the defendant forfeited its rights to the award, it was not, therefore, by estoppel of record, but by using the name of the lessor as relator, when under subdivision 2 of section 296 of the New York Tax Law (Consol. Laws, c. 60) it might possibly have sued in its own name as the person paying the tax.
The appellants’ position in substance makes the choice of the lessor as relator a transfer of the defendant’s rights, an interpretation which it plainly cannot bear. At the time the defendant was in full possession of the lessor’s road, was not in default, and there existed no conceivable reason to suppose that its equity in the payment would not be freely recognized; It is not, therefore, necessary to challenge the propriety of the passage quoted above from the final order on certiorari. We must, indeed, accept the ruling of the state courts in Hedges v. Craig, *922185 N. Y. S. 122, 194 App. Div. 786, affirmed 132 N. E. 868, 231 N. Y. 513, that it was properly inserted. Nor. do we, of course, suggest that the full effect of those proceedings is open to review here.
The first mandamus is so clearly irrelevant that it seems idle to do more than allude to it; it accomplished no more than to establish the receiver’s right to such refunds as he had title to, without set-off by the city. The second mandamus established the lessor’s title at law to the fund, but it did nothing more. It did, indeed, conclude the receiver from maintaining any rights at law against the fund, because it decided that as to the city the lessor was the sole obligee. Till then it was perhaps arguable — at least it was argued — that under subdivision 2 of section 296 the defendant and its receiver might estab-. lish a direct title as the person paying the tax.
That decision was therefore a step in this proceeding because, unless title is in the lessors, the petitions at bar will not lie, based, as they are, upon an implied trust. But it went no farther, and, instead of settling the relations of the parties in equity, ended as it did precisely for the reason that upon mandamus the court would not look behind the legal title of the relator on certiorari. How that can be supposed to have concluded this controversy we cannot understand. Indeed, the learned judge at Special Term gave as one reason for his decision that the obligor, the city, should not be drawn into this very dispute.
Therefore the question is open on the merits whether the trustee of an implied trust may set off a claim owed him by the beneficiary. The opposite is well settled in bankruptcy. Libby v. Hopkins, 104 U. S. 303, 26 L. Ed. 769; Western Tie & Timber Co. v. Brown, 25 S. Ct. 339, 196 U. S. 502, 509, 510, 49 L. Ed. 571; Alvord v. Ryan, 212 F. 83, 128 C. C. A. 539 (C. C. A. 8); Morris v. Windsor Trust Co., 106 N. E. 753, 213 N. Y. 27, Ann. Cas. 1916C, 972. But these cases depend upon the phrase “mutual debts or mutual credits,” of section 68a of the Bankruptcy Act (Comp. St. § 9652[a]). They do not necessarily control the procedure of a court of equity. The general rule is, however, equally well settled in equity. Cook County Nat. Bank v. U. S., 2 S. Ct. 561, 107 U. S. 445, 452, 27 L. Ed. 537; Freeman v. Loman, 9 Hare, 109; Dodd v. Winship, 133 Mass. 359; Abbott v. Foote, 15 N. E. 773, 146 Mass. 333, 4 Am. St. Rep. 314; Russell v. Pottsville, etc., Church, 65 Pa. 9; Tagg v. Bowman, 99 Pa. 376; First National Bank v. Barnum, etc., Works, 24 N. W. 543, 58 Mich. 124, 55 Am. Rep. 660; Harris v. Elliott, 48 N. Y. S. 1020, 24 App. Div. 133.
It is quite true that it was not applied in Smith v. Perry, 95 S. W. 337, 197 Mo. 438, on the theory that insolvency raised a special equity. Courts of equity have certainly at times gone further in such matters than courts of law, but insolvency is not enough, when there is a fiduciary relation, as several of the cases just cited show. As Vice Chancellor Turner said in Freeman v. Loman, supra, there must be something from which one may gather that the-parties have assented to the set-off. None of the eases cited by the appellants reach this situation at all.
Decrees affirmed.