Summary
following bank's surrender of plaintiff's funds to IRS pursuant to levy, plaintiff sued bank claiming breach of contract and conversion
Summary of this case from Kline v. NicholsOpinion
February 2, 1976
Order, Supreme Court, New York County, entered March 11, 1975, granting summary judgment to the defendant, and the judgment entered thereon on March 17, 1975, unanimously affirmed. Respondent shall recover of appellant $60 costs and disbursements of this appeal. The plaintiff sued the defendant First National City Bank to recover damages for the bank's dishonor of certain drafts alleging, inter alia, claims for breach of contract and conversion. However, the entirety of plaintiff's funds on deposit with the defendant bank were clearly subject to notices of levy and demands for payment served by the Internal Revenue Service, since the amount demanded exceeded the amount then on deposit ( U.S. Code, tit 26, §§ 6321, 6331). The bank was required to surrender the funds of plaintiff in its possession to the appropriate Federal authorities. Failure to surrender, after proper demand, could result in the bank's being directly liable for the amount due and possibly subject the bank to an additional penalty for noncompliance (US Code, tit 26, § 6332, subd [c]). Special Term, under these circumstances, correctly granted summary judgment to the bank.
Concur — Stevens, P.J., Kupferman, Birns, Lane and Yesawich, JJ.