Quinnipiack Club v. United States, 41978.

• Decision Date: 06 November 1933
• Docket Number: No. 41978.,41978.
• Citation: 4 F. Supp. 996
• Parties: QUINNIPIACK CLUB v. UNITED STATES.
• Court: U.S. Claims Court

4 F. Supp. 996

QUINNIPIACK CLUB v. UNITED STATES.

No. 41978.

Court of Claims.

November 6, 1933.

William Cogger, of Washington, D. C. (John E. Hughes, of Chicago, Ill., on the brief), for plaintiff.

Fred K. Dyar, of Washington, D. C., and Frank J. Wideman, Asst. Atty. Gen., for the United States.

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

PER CURIAM.

This is a suit for the recovery of $16,599.01, taxes on initiation fees and dues, alleged to have been erroneously assessed and collected by the Commissioner of Internal Revenue, on the ground that the plaintiff was not a social, athletic, or sporting club within the meaning of section 501 of the Revenue Act of 1926 (26 USCA § 872 note) and section 413 of the Revenue Act of 1928 (26 USCA § 872).

The court, upon the report of a commissioner, makes the following special findings of fact:

1. The plaintiff was organized on March 29, 1871, and incorporated as the Quinnipiack Club of New Haven under a charter granted to it by the General Assembly of the state of Connecticut during the January session of 1878, approved by the Governor February 27, 1878, and accepted at a special meeting of the club on March 6, 1878.

It was provided in the charter that the club should "be located in the city of New Haven, for establishing and maintaining a library, reading room, gallery of art, and for the promotion of city improvements and social intercourse by such lawful means as shall be expedient and proper for the above-named purposes."

2. This suit was brought to recover the sums of $3,288.81, $4,071.82, $4,040.07, $4,442.00 and $756.31, representing taxes alleged to have been paid on dues and initiation fees for the periods January 1, 1927, to December 31, 1927, January 1, 1928, to December 31, 1928, January 1, 1929, to December 31, 1929, January 1, 1930, to December 31, 1930, and January 1, 1931, to February 28, 1931, respectively. Five separate claims for refund covering said amounts were filed with the collector of internal revenue for the district of Connecticut on April 14, 1931, on the ground that the plaintiff did not qualify as a social, sporting, or athletic club within the meaning of section 801 of the Revenue Act of 1921, section 501 of the Revenue Acts of 1924 and 1926, nor section 413 of the Revenue Act of 1928, inasmuch as it had never been used for dances, card parties, or theatrical performances; that it possessed no golf course, tennis courts, swimming pool, nor outside properties of any character, nor did it in any way cater to the usual athletic or social features of social clubs; that any social features were entirely subordinate and incidental to its predominant purpose of providing a place for daily luncheon to its membership; and that it was composed entirely of business and professional men.

The said claims for refund were rejected by the Commissioner of Internal Revenue on June 27, 1931, in a letter addressed to the plaintiff by the Commissioner on that date, in which the Commissioner held that the dues and fees paid by the plaintiff's members were properly subject to the tax imposed. The several claims for refund, along with the Commissioner's letter of rejection, are in evidence as plaintiff's Exhibits 2, 3, 4, 5, 6, and 8, and are by reference made a part of this finding.

3. During the first several years of its existence the plaintiff occupied rented quarters. Some time prior to 1894 it purchased a fine old four-story and basement residence, located at 986 Chapel street, which had been built in about 1812, and which it occupied as its clubhouse until October, 1931, when it moved into the new clubhouse which it had erected at 221 Church street. On the first floor there were the office, a lounge, two large dining rooms, and several small private dining rooms. The library and reading room and barber shop were on the second floor. Thirteen bedrooms were located on the upper floors. Two bowling alleys were installed in the basement in 1905 or 1906, within a year or two after the plaintiff's restaurant services were first inaugurated in its clubhouse.

The plaintiff's present clubhouse at 221 Church street is located at the edge of New Haven's business center, and but a moment's walk from the Green. It is built of colonial red brick along traditional Georgian lines, resembling a fine colonial residence and in keeping with the interior, which is invitingly comfortable. The member's entrance opens into a lobby, about which are grouped the office, coat room, wash room, a small reception room, and a broad stairway giving access to the main floor above. The lounge is located on the main floor, overlooking Church street. The comfortable chairs and large open fireplace make the room an attractive gathering place. The library is also on the second floor and also overlooks the street. The governor's room adjoining the library may be used as a second lounge or large card room. Dining facilities are provided on the main floor. The principal dining room will seat 100 comfortably. There are five private dining rooms constructed in such a way that they can be opened into one large room. An open-air dining terrace adjoins the main dining room.

The ladies dining room has a separate entrance from the street through a private lobby and reception room.

The sleeping accommodations for members who may wish to make the club their home and for nonresident members and guests are on the upper floors. There are thirty-six of such rooms attractively furnished, most of them having private baths, either shower or shower and tub. Facilities have been provided for various social and recreational activities. There are four bowling alleys with comfortable space for spectators, and there are handball or squash courts for those who desire more strenuous exercise. Locker and shower rooms are conveniently located adjacent to these facilities in the basement, where activities of this character may go on without disturbance to those in other parts of the clubhouse. There are billiard and pool tables in a handsomely appointed and fully equipped billiard room on the ground floor. Several large card rooms are provided on the second floor.

There is a large room in the basement which has an open fireplace and is decorated with the stuffed heads of wild animals and furnished with furniture brought over from the old clubhouse. It is contemplated that liquor will be served in that room from a nearby serving pantry whenever the sale of liquor is legalized. There was no bar in the old clubhouse. There was, however, a butler's pantry which was used as a serving room, and all drinks were prepared there and served in the dining room or lounge, but in no other part of the club.

4. The plaintiff's constitution provided that its officers should be a president, two vice presidents, who should be elected at each annual meeting, and that it should have a board of fifteen governors who should hold office for the term of 3 years; that every candidate for membership should be at least 21 years of age when proposed, and should be proposed and seconded by two resident members of the club; that the limit of membership should be at the discretion of the board of governors; that the number of resident members should not exceed 375 and the number of nonresident members should not exceed 150.

The by-laws...