Tidwell v. Anderson
| Decision Date | 05 June 1933 |
| Citation | 4 F. Supp. 789 |
| Parties | TIDWELL v. ANDERSON. |
| Court | U.S. District Court — Southern District of New York |
Greene & Hurd, of New York City, for plaintiff.
George Z. Medalie, U. S. Atty., of New York City (Ira Koenig, Asst. U. S. Atty., of New York City, of counsel), for defendant.
The ultimate facts which I deem pertinent — applicable throughout the period under consideration, but for convenience (unless otherwise indicated) recited in the present tense — are as follows:
1. The club has the physical equipment of the ordinary social club.
2. The university owns the land and constructed the clubhouse.
3. Except that house charges are paid by the individuals who incur them and the club cares for repairs inside the building, the entire expense of maintaining the property (including upkeep, external repairs, light, and heat) is borne by the university.
4. The membership of the club is almost wholly restricted to the officers and teaching staff of the university.
5. The membership is made up completely of such officers and staff, save for a negligible few whose work so much affects or is so closely allied to the affairs of the university that it is desirable, from the standpoint of the university itself, that its officers and staff have ready access to or association with them.
6. The controlling purposes and the controlling activities of the club are exclusively in furtherance of the educational work of the university.
7. The club has no activities outside the clubhouse, and except to the extent essential to render the clubhouse sufficiently comfortable and attractive to promote the assembly there of the administrative and teaching personnel of the university, who are engaged in the conduct of the university as a seat of learning, the club has no activities whatever.
8. Sleeping accommodations are meager, consisting only of a room for the steward and a suite reserved for guests of the university, but rarely used at all.
9. The principal meal is luncheon, when it is customary for groups from a single department of the university or professionally occupied on a single subject to sit at the same tables, so as there to discuss or dispose of university matters of mutual concern.
10. The service of meals, the provision of space for games of kinds prevalent among professional men while relaxing and the arrangement of occasional, but infrequent, entertainments for members — sometimes accompanied by their wives or children — are confined to what may be reasonably estimated as needed in order to induce the members to gather at the clubhouse, so as thereby to assist in the efficient discharge of strictly university functions.
11. The social purposes of the club are merely incidental to the accomplishment of the university's own purposes.
12. In design, as well as in practice, the club is but an integral part of the organization of the university as an educational institution.
Upon the facts, as I have stated them, if the statute (26 USCA § 872) stood alone, I should be inclined to hold that the club is "social." Article 36 of regulations prescribed for the enforcement of the statute, however, contains a definition of the type of club which, within the terms of the statute, is "social." The courts lean strongly to the interpretation put on a statute by executive officials charged with its administration, particularly when, as here, the interpretation has prevailed for some years. Accordingly, I shall accept the view of the Treasury Department, as set out in the regulation cited, of what is a social club. Under the regulation, as I see it, the issue in the present case turns on the phrase "a material purpose" employed in the regulation. What it means is not altogether free from doubt.
Counsel agree that the club is not entitled to recover unless it be within the exempting clause of the regulation. So, also, both say that the exempting clause embodies two characteristics, which must inhere to a club, if it is to escape taxation on its dues. One of these is negative; the other is positive. It must appear that the social features (1) "are not a material purpose of the organization" and (2) "are subordinate and merely incidental to the active furtherance of a different and predominant purpose."
On the proof it seems to me manifest that the social features of the club now involved are quite...
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