Tennessee U.D.C. v. Vanderbilt University
Decision Date | 03 May 2005 |
Citation | 174 S.W.3d 98 |
Parties | TENNESSEE DIVISION OF THE UNITED DAUGHTERS OF THE CONFEDERACY v. VANDERBILT UNIVERSITY. |
Court | Tennessee Supreme Court |
Douglas E. Jones and Robert J. Notestine, III, Nashville, Tennessee, for the appellant, the Tennessee Division of the United Daughters of the Confederacy.
William N. Ozier and Leona Marx, Nashville, Tennessee, for the appellee, Vanderbilt University.
This appeal involves a dispute stemming from a private university's decision to change the name of one of its dormitories. An organization that donated part of the funds used to construct the dormitory filed suit in the Chancery Court for Davidson County asserting that the university's decision to rename the dormitory breached its seventy-year-old agreement with the university and requesting declaratory and injunctive relief and damages. Both the university and the donor organization filed motions for summary judgment. The trial court, granting the university's motion, determined that the university should be permitted to modify the parties' agreement regarding the dormitory's name because it would be "impractical and unduly burdensome" to require the university to continue to honor the agreement. The donor organization appealed. We have determined that the summary judgment must be reversed because the university has failed to demonstrate that it is entitled to a judgment as a matter of law. Furthermore, based on the essentially undisputed facts, we have determined that the donor organization is entitled to a partial summary judgment because the university has breached the conditions placed on the donor's gift and, therefore, that the university should be required to return the present value of the gift to the donor if it insists on renaming the dormitory.
In 1867, George Peabody, an American merchant and financier living in London, donated one million dollars to establish a fund for the improvement of education in the South in the aftermath of the Civil War.1 Within a few years, the trustees of the fund, known as the "Peabody Education Fund," had settled on a plan to endow a teacher training school, or normal school, as the best way to achieve the purpose of the fund. In 1875, the Peabody Education Fund financed the creation of a teacher training school within the existing University of Nashville.2 The teacher training school was officially named the "State Normal College," and it operated under the auspices of the Peabody Education Fund board of trust, the University of Nashville board of trust, and the newly created Tennessee State Board of Education. In 1889, the school was renamed "Peabody Normal College" in honor of the school's benefactor.
In 1902, the trustees of the Peabody Education Fund announced plans to liquidate the fund. Three years later, they voted to direct one million dollars of the proceeds to create a permanent endowment for a college of higher education for teachers in the Southern states as a successor to the Peabody Normal College. The trustees conditioned the gift on the raising of $550,000 in matching funds from the State of Tennessee, Davidson County, the City of Nashville, and other sources and on the University of Nashville's donation of the land and buildings then being used by the Peabody Normal College. The trustees stipulated that the new institution would be known as the "George Peabody College for Teachers."3
When the final governmental appropriations were made in 1909, the Tennessee General Assembly incorporated the George Peabody College for Teachers ("Peabody College"). The trustees of the new college, who had been appointed by the Peabody Education Fund trustees, quickly voted to spend almost $400,000 to purchase several properties adjacent to Vanderbilt University ("Vanderbilt").4 Although the University of Nashville had donated land and buildings for use by the new college, the newly appointed Peabody College trustees had decided, with the support of the Peabody Education Fund trustees, to construct a new campus near Vanderbilt to foster institutional cooperation.
The Peabody College trustees embarked on an ambitious building plan for the new location, taking as their guide the design of the University of Virginia. Classes continued at the old Peabody Normal College in downtown Nashville through the end of the 1910-11 academic year.5 The new campus did not open for students until the summer of 1914, and when it did, only the Industrial Arts Building and Home Economics Building had been completed.
The construction of the Peabody College campus provided the Tennessee Division of the United Daughters of the Confederacy ("Tennessee U.D.C.") with the perfect opportunity to implement a project it had been contemplating for some time. Since 1902, the Tennessee U.D.C. had been discussing the idea of raising funds for the construction of a women's dormitory for the use of descendants of Confederate soldiers at a college or university in Tennessee. Accordingly, following the announcement of the decision to move to a new campus, the Tennessee U.D.C. began discussions with Peabody College regarding underwriting the construction of a dormitory on the new campus.
On January 21, 1913, the Tennessee U.D.C. entered into a contract with the Peabody College trustees to raise $50,000 for the construction of a women's dormitory on the new campus. In return for this gift, the trustees agreed to allow women descendants of Confederate soldiers nominated by the Tennessee U.D.C. to live in the dormitory rent-free and to pay other dormitory expenses on an estimated cost basis. The contract reserved to the college the right to reject anyone nominated by the Tennessee U.D.C. and stipulated that the college would select the design and plan for the dormitory, would hold title to the building, and would control and manage it. However, it also stated that the Tennessee U.D.C. was "invited by the Trustees of the George Peabody College for Teachers to maintain throughout the future an advisory relationship with regard to the management of said building." The 1913 contract specifically stated that the purpose of the Tennessee U.D.C. and Peabody College in entering into the contract was to evidence the agreement by which the Tennessee U.D.C. undertook to raise the construction fund and "the conditions which will be attached to the gift of the said fund" to Peabody College.
The fundraising campaign proceeded slowly at first. By 1927, fourteen years into the campaign, the Tennessee U.D.C. had collected little more than a third of the $50,000 it had agreed to raise. The Tennessee U.D.C. desired to turn over these funds to Peabody College but also desired to retain a right to recall them in the event the fundraising campaign ultimately failed. Thus, on June 17, 1927, the Tennessee U.D.C. entered into a second written contract with Peabody College.
The second contract stated that both parties desired that a "Confederate Memorial Hall" building be constructed on Peabody College's campus. The Tennessee U.D.C. agreed to pay over to the college treasurer the $17,421.47 it had already raised and to turn over further sums when they were collected. In return, the college agreed that when the funds reached a sufficient amount, it would construct a building on its property conforming to plans and specifications to be agreed upon by the parties, and that the building would be used for the purposes contemplated by the parties. In addition, the college agreed to invest the sums deposited by the Tennessee U.D.C., to pay the interest earned on these sums into the building fund annually, and to return the sums deposited, with interest, if the Tennessee U.D.C. decided to recall them.
In spite of the Great Depression, during the next six years the Tennessee U.D.C. managed to raise enough money to meet its original $50,000 goal. By that time, the Tennessee U.D.C. and Peabody College had decided that although a small women's dormitory could be constructed for $50,000, they would both prefer to use the $50,000 as partial funding for the construction of a larger women's dormitory to be located on the campus quadrangle. Peabody College estimated that the larger dormitory would cost approximately $150,000 and had already applied to the National Recovery Administration for the extra funding.
Sometime in September of 1933, the Tennessee U.D.C. and Peabody College entered into a third written contract to reflect their new plans.6 The third contract expressly ratified and affirmed the 1913 and 1927 contracts. The Tennessee U.D.C. agreed to allow the college to use the original $50,000 and any additional sums raised by the Tennessee U.D.C. for the construction of a larger building, the plans and specifications of which had been examined, approved, and signed by representatives of the Tennessee U.D.C.7 The Tennessee U.D.C. agreed to this modification on the condition that the college allow the first two floors of the larger dormitory to be used for the purposes specified in the 1913 and 1927 contracts, and on the further condition that the college place on the building an inscription naming it "Confederate Memorial." The third contract explicitly stated that it was "the intention of the parties that this contract shall be void and of no effect in case [the additional funding] is not obtained from said National Recovery Administration."
The National Recovery Administration denied the request for a $100,000 construction grant on the ground that Peabody College was not a "public body." Nevertheless, the Peabody College trustees and the Tennessee U.D.C. decided to proceed with their plans to...
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