Court Opinion

ID: 8589054
Source: CourtListenerOpinion
Date Created: 2022-11-23 15:42:37.495306+00
Date Added: 2024-06-11T16:54:22.265521
License: Public Domain

JoNes, Judge^
dissenting:
I cannot agree to the conclusion reached by the majority.
A club may be of a dual nature. According to the regulations issued pursuant to the statute it is not necessary;that'a club be purely a “social, athletic or sporting” club in: order for it to fall within the taxing provision.- That’need-not fee its maj or purpose. It is only necessary that such.be one of - its material purposes or activities.
.. It is difficult to escape the conclusion that these activities were a material part or purpose of the organization. ; - -1
The welfare committee, appointed by the local Board of Governors and which included a member of the Board as one of its members, controlled and stimulated “unofficial activities” of the club. Subdivisions of the welfare committee included an employment committee, a sick committee, a-recreation committee and an entertainment committee. There were dinners for division meetings, ice skating parties, swimming parties, fishing derbies, card parties, motion pictures, dances, annual picnics, and minstrel' shows. Twenty-nine *581separate affairs, not including dinners, preceded the division meetings. The club had a band, an orchestra, a golf club, and a drum and bugle corps. Athletic teams included baseball, basketball, hockey, indoor baseball, softball, bowling, golf and tennis.
While no clubhouse had been built it was one of the charter purposes and from the formation of the club was a hope of the membership. In the meantime quarters were rented in a business building.
The minutes of the monthly meetings were replete with references to announcements of social and athletic activities of the club.
True, there were many meetings at which discussion was had of ideals, including honor, loyalty, common sense, courage, justice, ambition, pride, self-control, confidence, energy, responsibility, and numerous other undisputed qualities recognized as desirable by all self-respecting people.
Much emphasis was placed at the monthly meetings on prompt payment of dues. The initiation fee was $20 and the monthly dues were $2. All of the initiation fee and half the dues went to the national organization which was largely (.aider the control of a talented gentleman by the name of Mon jar; who was the founder.
At each monthly meeting a message from Mr. Mon jar was read. He peddled his meditations and palmed them off in the- form of ponderous platitudes, and in effect at so much per platitude, or rather on a monthly installment basis. We are led to make this statement because of the amount of money which went to national headquarters, none of which does the record show ever came back to the local association, except in the form of preachments, tritish advice, and truisms, the points of which by repetition must have become as dull as an: old froe, and the cost of which could have been but a small fraction of the total intake. Undoubtedly he was a genius at organization, and, while his messages were in no way objectionable and contained much of merit, stripped of their excess verbal baggage, they amounted to nothing more than a restatement of age-old and generally accepted principles and ideals;
The members listened to these messages. Why shouldn’t they ? They had paid for them. Listening to these ethical *582discussions bored some of the members, even made some, of them sleepy, but then there was a fine, in addition to the dues, if they didn’t attend the meetings. . ¡
While there were regular meetings, and in the circümr stances, a rather full attendance, we do not see how that alters the fact that the social, athletic, and sporting features were a material part or purpose of the organization. In fact, it is doubtful if the club could have survived but for such- activities. It cost the member $20 to get in, but he could get out for-nothing, and many of them probably would have done so’ but for the activities mentioned. However, with almost-every-conceivable kind of social, athletic, and sporting undertaking, plus the fact that many of their neighbors belonged and: the possibility of business advantage, it is not unnatural that they’ should remain as members. - ' .u:
One natural inquiry is: Why did men join this organiza, tion ? It does not seem.possible that.commonplace .discussions, of well-known principles could have been.the chief inducement. Looking at the entire set-up, it is inescapable that at least a material part of the attraction was the desire for-social contact with their fellow men, the desire to see and-take part in the athletic events and of visiting with each other- at. the picnics and dinners. These things, the chance of rubbing elbows, of conversation with different individuals -at their frequent meetings, which were usually accompanied with food of some kind, afford a more plausible explanation of why men wished to belong to the dub. -
It was not a poor man’s club. The dues, initiation .-fees, and penalties for failure to attend show that only a man .of fair means could afford membership. ; ’• - - -
The minutes of the meetings show that some form of social gathering and athletic features were almost always-: announced, evidently -for the purpose of -keeping up interest and thereby retaining membership so that dues would bé paid regularly. Without these .social and athletic attractions the club could not have, lasted. Those in charge evidently realized this fact, as is shown by the gradually increasing attention paid these activities. ■
The Commissioner of Internal Eevenue having decided the issue adversely, the burden of proof is on plaintiff’’to show that these activities were not a material part or pur-' *583pose of the organization. It has not discharged this burden.
I would hold that the social, athletic, and sporting features are a material purpose' of the organization, and that it is therefore subject to the tax.
Whaley, Chief Justice, concurs in this opinion.