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TRANSAMERICA INS. CO. v. LONG

October 12, 1970

Transamerica Insurance Company, a corporation, Plaintiff
v.
H. Alan Long, District Director, Internal Revenue Service, IRS, John H. Bingler, former District Director, Internal Revenue Service, and the United States of America, Defendants


Marsh, Chief Judge.


The opinion of the court was delivered by: MARSH

The plaintiff, Transamerica Insurance Company, brought this action against the present District Director of Internal Revenue, a former District Director, and the United States of America. The action against the United States of America has been withdrawn by the plaintiff. *fn1"

 The complaint was filed October 17, 1969. In due course an answer was filed by the defendants. Thereafter defendants moved for summary judgment on the grounds that there is no genuine issue of material fact and that defendants are entitled to judgment as a matter of law. In support of their motion, the defendants filed an affidavit of Revenue Officer Klaus, an employee of the District Director of Internal Revenue at Pittsburgh, Pennsylvania, and an affidavit of the defendant, John H. Bingler, the District Director of Internal Revenue at Pittsburgh from May 1, 1956 to December 31, 1965. Also to be considered are the written answers to interrogatories and supplemental interrogatories served upon defendants by the plaintiff.

 Section 1340, 28 U.S.C.A., is relied on for jurisdiction. *fn2" It is our opinion that there is no genuine issue of material fact, that the court does not have jurisdiction, and the complaint should be dismissed.

 From the pleadings it appears to be undisputed that on April 22, 1964, the plaintiff was surety on a bond in favor of Punxsutawney National Bank, Dayton, Pennsylvania; that on that date William Hanzl, acting in conspiracy with others, robbed the bank of the sum of $18,500 for which crime he was later apprehended and convicted. The plaintiff reimbursed the bank for the loss incurred in the robbery, and the bank assigned to plaintiff all its rights to the robbery proceeds.

 It appears from the affidavits and answers to interrogatories that on April 24, 1964, two days after the robbery, Hanzl paid in excess of $4,500 to Revenue Officer Francis Klaus in satisfaction of his tax liability for the years 1960 and 1962. *fn3" Of this payment, $565.54 was in cash, and on the same day with that cash Klaus purchased a cashier's check payable to the Internal Revenue Service in that amount from Mellon National Bank. The remainder of the amount received by Klaus was in the form of a cashier's check and money orders which were deposited by him in an IRS account in the People's Union Bank, McKeesport, Pennsylvania, on April 28, 1964.

 Hanzl was arrested on April 29, 1964. Shortly after his arrest on that date he stated to agents of the Federal Bureau of Investigation "that he had been given $2,000 as proceeds of the robbery and that he had paid this money to the Internal Revenue Service" (Answer to Interrogatory No. 18).

 Thereafter, "agent Klaus was told that Mr. Hanzl might have robbed a bank to pay tax obligations" (Answer to Supplemental Interrogatory No. 1), and that "Mr. Hanzl might have been involved in a robbery of the Dayton Branch of the Punxsutawney National Bank on April 22, 1964, and that this robbery might have made possible his April payments to the Internal Revenue Service" (Answer to Interrogatory No. 15).

 At the threshold it is to be observed that since the 1963 amendment to Rule 56(e), Fed. R. Civ. P., summary judgment will not be denied merely because the pleadings create the appearance of a dispute. From the written depositions and affidavits of the defendant Bingler and Revenue Officer Klaus, it appears that on April 24, 1964, Hanzl gave Klaus cash, a cashier's check and money orders in satisfaction of his tax liabilities, and it was not until four days later, after the cash, cashier's check and money orders had been deposited in banks, that Klaus was told by an FBI agent that Hanzl might have robbed a bank to pay his tax obligations. Since these facts appearing in the affidavits and answers to interrogatories have not been traversed by plaintiff, it does not claim, and indeed could not claim, that it is sheltered by the contrary allegations in its complaint to the effect that the defendants wrongfully received and applied the tax payments. *fn4" Robin Construction Company v. United States, 345 F.2d 610, 614-615 (3d Cir. 1965); Bobo v. Page Engineering Company, 285 F. Supp. 664 (W.D. Pa. 1967), aff'd 395 F.2d 991 (3d Cir. 1968). It thus appears that there is no genuine issue of material fact and the case should be decided on the basis of the legal issues presented.

 Since the United States has been dropped as a party, this action is being pursued against the District Directors of Internal Revenue Service in their individual capacities and any recovery must be based upon their wrongful seizure and appropriation of the bank's money to apply on Hanzl's taxes. A District Director who wrongfully seizes and applies property to tax payments is subject to an adverse judgment against him even though he paid the proceeds into the Treasury of the United States. United States v. Kales, 314 U.S. 186, 197-198, 86 L. Ed. 132, 62 S. Ct. 214 (1941); Stuart v. Chinese Chamber of Commerce of Phoenix, 168 F.2d 709, 713 (9th Cir. 1948); Oil City National Bank v. Dudley, 198 F. Supp. 849, 850 (W.D. Pa. 1961). *fn5"

 It is important to recognize that actions against a District Director are limited to claims showing that the Director has been guilty of wrongful conduct in the collection or exaction of taxes. Before this court can continue to exercise jurisdiction in this case, there must be an issue of fact which, if resolved in favor of the plaintiff, would establish wrongdoing on the part of one or both of the District Directors resulting in a judgment to recover the money. Pennsylvania Turnpike Commission v. McGinnes, 268 F.2d 65, 67-68 (3d Cir. 1959). There is no such issue, hence no jurisdiction.

 The affidavits and interrogatories have raised this jurisdictional question. If jurisdiction does not exist the case must be dismissed by the court sua sponte. Mansfield, C. & L.M. Railway Co. v. Swan, 111 U.S. 379, 4 S. Ct. 510, 28 L. Ed. 462 (1884); Shahmoon Industries, Inc. v. Imperato, 338 F.2d 449 (3d Cir. 1964).

 As pointed out in Pennsylvania Turnpike Commission v. McGinnes, supra, 268 F.2d at page 68, the many cases permitting personal claims against District Directors for wrongful property seizure and tax collection have no relevance to the present case. There was no wrongful act on the part of Revenue Officer Klaus in receiving the voluntary payments from Hanzl for his income taxes. The uncontroverted affidavits show conclusively that neither Revenue Officer Klaus nor District Director Bingler had any reason to suspect that Hanzl had been involved in the robbery of the Punxsutawney Bank until April 29, 1964, after the payments were deposited in banks. The defendant Long did not become District Director of Internal Revenue until after December 31, 1965. His only apparent connection as a defendant is that he has been notified of the plaintiff's claim.

 A voluntary payment on account of taxes must be distinguished from a wrongful seizure. Pennsylvania Turnpike Commission v. McGinnes, supra. Since it appears that Hanzl's payments were voluntary and received innocently, the court does not have jurisdiction to entertain this suit even though the revenue officials, after the payments had been made and deposited, heard that the cash, cashier's check, and money orders used ...


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