US SUPREME COURT DECISIONS

UNITED STATES V. FIRST NATIONAL CITY BANK, 379 U. S. 378 (1965)

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U.S. Supreme Court

United States v. First National City Bank, 379 U.S. 378 (1965)

United States v. First National City Bank

No. 59

Argued November 16, 1964

Decided January 18, 1965

379 U.S. 378

Syllabus

The Commissioner of Internal Revenue, having made jeopardy assessments of some $19,000,000 against a Uruguayan corporation, served with notices of levy and of federal tax lien respondent bank in New York, in whose Montevideo branch the corporation maintained a deposit. Concurrently, petitioner brought a foreclosure action in Federal District Court against the corporation, respondent, and others, pending determination of which an injunction was sought against transfer by respondent of any property or rights held for the corporation's account. Respondent, but not the corporation, was personally served. The District Court granted a temporary injunction under 26 U.S.C. § 7402(a), which gives district courts power to grant injunctions "necessary or appropriate for the enforcement of the internal revenue laws," and the Court of Appeals reversed.

Held: The District Court has jurisdiction to preserve the status quo and prevent further dissipation of assets by issuing its temporary injunction "freezing" the corporation's account in respondent's foreign branch pending personal service on the corporation. Pp. 379 U. S. 381-385.

(a) Rules 4(e) and (f) of the Federal Rules of Civil Procedure provide for service in accordance with a state statute of a noninhabitant or person not found in the State. P. 379 U. S. 381.

(b) Under § 302(a) of the New York Civil Practice Law and Rules, which became effective after the temporary injunction was issued, out-of-state personal service may be made as provided in § 313 on a nondomiciliary transacting business within the State, a remedy which New York law makes applicable to further proceedings, such as are involved here, in an action pending on the effective date of the statute. Pp. 379 U. S. 382-383.

(c) Issuance of the injunction under 26 U.S.C. § 7402(a) was a proper exercise of the equity power of the District Court, particularly as it was acting in the public interest. P. 379 U. S. 383.

(d) Respondent's foreign branch was not a "separate entity" without the reach of the District Court's in personam order. P. 379 U. S. 384. chanrobles.com-red

Page 379 U. S. 379

(e) The District Court reserved power to enter a protective order upon a showing, though none has been made, that the "freezing" of the foreign branch account would violate foreign law or subject respondent to the risk of double liability, and that court is open to any representations which the Executive Branch might make that such "freezing" would embarrass this country's foreign relations. P. 379 U. S. 384.

325 F.2d 1020, reversed.



























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