Army and Navy Club of America v. United States, L-495.

• Decision Date: 02 November 1931
• Docket Number: No. L-495.,L-495.
• Parties: ARMY AND NAVY CLUB OF AMERICA v. UNITED STATES.
• Court: U.S. Claims Court

72 Ct. Cl. 684, 53 F.2d 277 (1931)

ARMY AND NAVY CLUB OF AMERICA v. UNITED STATES.

No. L-495.

Court of Claims.

November 2, 1931.

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B. B. Pettus, of Washington, D. C. (E. F. Colladay and Colladay, McGarraghy, Pettus & Wallace, all of Washington, D. C., on the brief), for plaintiff.

Fred K. Dyar, of Washington, D. C., and Charles B. Rugg, Asst. Atty. Gen., for the United States.

Before BOOTH, Chief Justice, and GREEN, WHALEY, WILLIAMS, and LITTLETON, Judges.

GREEN, Judge.

The plaintiff in this case seeks to recover $22,591.24 and interest thereon alleged to have been wrongfully collected from it as taxes on club dues and initiation fees in the period from June 29, 1925, up to and including May 31, 1929.

The evidence shows that the plaintiff is a club organization composed largely of Army and Navy officers, or those who have served in such capacity. The objects of the club, as stated in its original charter, have been "to encourage military and naval science and for the mutual benefit of its members by social intercourse with those who have served in the military and naval affairs of the United States or foreign governments."

The issue is largely one of fact, and the case is one which, under the ruling of the Supreme Court, the ultimate fact which controls the decision must be determined by this court. The plaintiff claims that it is not a social club, and therefore is not subject to the tax assessed against it. The commissioner ruled otherwise, and the only question in the case is whether his ruling is correct under the facts shown by the evidence.

The evidence shows that the club has about 2,400 members and occupies a twelve-story and basement clubhouse building in the city of New York of the value of approximately $550,000. It would take too much space to set out in the opinion the manner in which this building is equipped, which is described in finding 7, and also in finding 9. It is sufficient to say that it is the practice of the club to give numerous and varied entertainments. Besides this, lectures on military and patriotic topics have been given under the auspices of the club. The club was operated at a loss in the years 1925 to 1929, and a deficit would have occurred had not funds been received from life and founder members. It has no other revenue than that obtained from dues and initiation fees, payments made by organizations for using the rooms, and serving meals to its members.

The purpose of the club and what it accomplishes are set out in finding 14, from which it appears that it serves to enable military and naval men and men interested in military and naval matters to make social contacts, and thereby promote and aid the activities of the Army and Navy...