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FDIC v. KUSER

August 15, 1944

FEDERAL DEPOSIT INS. CORPORATION
v.
KUSER et al.



The opinion of the court was delivered by: FORMAN

This action is brought by the Federal Deposit Insurance Corporation against John L. Kuser, Jr., individually, and John L. Kuser, Jr., and Walter G. Kuser, as executors of the estate of John L. Kuser. In its original complaint plaintiff demanded that a conveyance of certain real estate by John L. Kuser, deceased, to his son, John L. Kuser, Jr., before his death, be declared void, and that the plaintiff's claim against the estate be declared a lien on the property or, if the property has been sold or conveyed, that a judgment be entered against John L. Kuser, Jr., for the value of the property.

John L. Kuser died testate on August 11, 1937, naming John L. Kuser, Jr., and Walter G. Kuser as executors. The will was admitted to probate by the Surrogate of the County of Burlington and letters testamentary were issuded to the executors named as aforesaid. A claim of the Trust Company of New Jersey as a creditor, evidenced by promissory notes, was presented by it and allowed by the executors. The estate was declared insolvent by a decree of the Orphans' Court in the County of Burlington, State of New Jersey, on July 14, 1938. The aforesaid claim was subsequently assigned to the plaintiff.

 Defendants moved to dismiss the action upon the ground that "this Court should not exercise and lacks jurisdiction". Their motion is based on the following objections:

 (1) That the plaintiff acting alone has no rights and cannot maintain this action for its own benefit;

 (2) That the estate is now being administered in the Burlington County Orphans' Court and plaintiff has an adequate remedy in that it must pursue its claim in that proceeding;

 (3) That the deceased was indebted to the individual defendant, John L. Kuser, Jr., who has a right to set off the amount due him from the funds of the deceased in his possession;

 (4) That defendant John L. Kuser, Jr., has a common law right to retain assets of the estate in his hands as an executor for a debt in his favor incurred by decedent in his lifetime;

 (5) That the Burlington County Orphans' Court has jurisdiction over the parties and the subject matter herein and is the only court that can determine the rights of all creditors to any funds in the hands of John L. Kuser, Jr., by reason of the aforesaid conveyance;

 (6) That the fund is in the hands of an officer of the Orphans' Court of Burlington County and that this action is in rem against the fund.

 An amended complaint has been filed, subsequent to defendants' motion to dismiss, making the complaint for the benefit of plaintiff and in behalf of other creditors similarly situated, and demanding relief as set forth in the following prayers:

 "1. That the aforesaid conveyance to John L. Kuser, Jr., be declared void and that the claims of the plaintiff herein and of all other Creditors similarly situated who may be entitled to participate therein, be declared a lien on said premises and the order of the priorities of plaintiff and other creditors be determined as this Court may deem equitable and just.

 "2. That said Defendant, John L. Kuser, Jr. be decreed to account to Plaintiff and to such other creditors similarly situated for the amount of the consideration for which the said premises were sold as aforesaid, and to pay as directed by this Court, the amount or amounts found due on such accounting.

 "3. That said Defendant, John L. Kuser, Jr. be decreed to account to Plaintiff and to such other creditors similarly situated, entitled to participate in said funds, for the reasonable value of said premises and to pay as directed by ...


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