Court Opinion

ID: 9641992
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:45:12.965996+00
Date Added: 2024-06-11T18:10:41.645976
License: Public Domain

L. HAND, Circuit Judge
(dissenting).
If the club had refused to elect Munn, he would still have owned his shares; they gave him a proprietary interest in the club, regardless of membership. Had he got them by gift or bequest, he would have been equally eligible. The charter of the club did not make his payment to the owner of the shares the “condition precedent” to his membership; it made his ownership, however acquired, the condition, and that is not the test prescribed. The statute was apparently intended to reach those cases where an “initiation fee” was disguised by issuing documents ofi ownership which the member forfeited when he resigned or was expelled. In sueh cases an incoming member must pay his own initiation fee, which goes to the common coffer. But I fail to see how a payment to another can be said to he in any sense an “initiation fee,” and this is all that the section defines. Nor am I satisfied that Congress would have wished to tax such members.
The phrase, “irrespective of the person or organization to whom paid,” does indeed lend color to what otherwise would in my opinion be a clear ease. However, it can be read as *206comprising those eases in which the club’s property is held by a trustee or holding company, legally separate from the club proper. We are dealing with a taxing statute where nothing is to be taken by intendment. Crooks v. Harrelson, 51 S. Ct. 49, 75 L. Ed. -, Nov. 24, 1930. I .cannot think that the concluding phrase is so unequivocal as to meet the doubts raised by the section.as a whole, and it seems to me that the District Court was right.