NEW YORK, June 26 (Reuters) - A divided appeals court on Tuesday tossed out a weapon possession case against a 14-year-old boy, the latest legal skirmish over the New York City Police Department's controversial "stop and frisk" policy.

The 3-2 decision from the Appellate Division, First Department, held that the arresting officer had overstepped his bounds by searching the boy, Darryl C, after stopping him on a sidewalk.

Noting that "widespread, aggressive police tactics in street encounters have recently raised concerns in other judicial forums," including a 2008 class action federal lawsuit filed by four black men who claimed they were stopped and searched because of their race, Justice Peter Tom wrote that unjustified frisks threaten individuals' Fourth Amendment protections against illegal searches.

"The gradual erosion of this basic liberty can only tatter the constitutional fabric upon which this nation was built," Tom wrote for the majority. "The ramifications go beyond this single case."

Police officials have defended the stop-and-frisk strategy, in which patrol officers try to reduce street crime by stopping individuals they deem suspicious. They say it has been a crucial tool in achieving a historic drop in citywide crime rates.

Critics maintain the tactic illegally targets minority communities. The New York Civil Liberties Union, which opposes the policy, said last month that the total number of stop-and-frisk searches of young black men in 2011 was actually higher than the number of young black men living in New York City.

'UNSUPPORTED HUNCH'

Darryl C was stopped in 2010 in the Bronx during the day by an officer who believed him to be a truant, the court wrote. After a search, the officer discovered a gun hidden in the boy's jacket, the court said.

Bronx Family Court Judge Nancy Bannon ruled that the search was justified because the officer, having seen Darryl put a black object into his jacket, "reasonably believed (him) to be armed and had a legitimate concern for his own safety," according to the appeals court.

But the law requires an officer to have "a reasonable suspicion of an individual's involvement in criminal activity," as well as a suspicion that the individual is armed, Tom wrote in reversing Bannon's finding.

"The motion court's ruling would, in effect, give the police the authority to stop and frisk a pedestrian who is not a suspect of a crime," he said.

The majority also included justices Karla Moskowitz and Nelson Roman.

In a dissenting opinion, Justice Rosalyn Richter said the officer had acted reasonably, given that there had been recent gang shootings in the area and the "furtive behavior" he observed.

"We reject the majority's attempt to paint this case as merely involving a police officer's unsupported hunch," wrote Richter, who was joined in her dissent by Justice Sheila Abdus-Salaam.

The city vowed to appeal.

"Far from acting on a mere hunch or an impulse, the police officer had reasonable suspicion, feared for his safety and exercised good judgment," said Celeste Koeleveld, a city lawyer. "The majority view upends this solid police work and sends the wrong message."

A police spokesman did not return a request for comment.

The Legal Aid Society, which represented Darryl, and the city's law department did not immediately comment on the decision. A spokesman for the NYPD did not return a request for comment.

The case is Matter of Darryl C, Appellate Division, First Department, No. 6253.

For Darryl C.: Raymond Rogers of the Legal Aid Society.

For the city: Julian Kalkstein of the New York City Law Department.

(Reporting by Joseph Ax)

Follow us on Twitter @ReutersLegal | Like us on Facebook