Court Opinion

ID: 6882761
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:19:55.702829+00
Date Added: 2024-06-11T16:05:37.865617
License: Public Domain

MARIS, Circuit Judge
(dissenting).
I regret that I cannot concur in the conclusion reached by the court in this case. The question before us is whether annual golf fees collected by the Merion Cricket Club from those of its members who desire the privilege of playing golf on the club’s courses are taxable under Section 1710 of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 1710, as amounts paid “as dues or membership fees to any social, athletic, or sporting club.” The Merion Cricket Club is a social and athletic club. It has ten classes of membership and for each class membership dues are fixed by the by-laws. Members of all the classes, except Playing Members (who do not have golf, privileges), are given the privilege of playing golf for an annual fee, payable in semi-annual instalments. The fee varies from $30 for members, under 21. to $110 for male members over 21 and its amount does not depend on the class of membership to which the member belongs. The golf privilege can be terminated by notice before the end of any year. If not so terminated the member becomes liable for another year’s fee. This method of charging members for the privilege of playing golf has been in effect since 1896.
The question turns upon the meaning to be given to the statutory terms “dues or membership fees.” While these are words in common use and are not defined in the statute a number of federal courts have had occasion to consider them and have indicated some limits to their meaning. Thus to be club dues or membership fees it has been held that payments by club members must be based upon membership in the club and must be payable by all the members of a particular class of membership, not merely by those of the class who elect to make use of a special club facilitv. Weld v. Nichols, D.C., 9 F.2d 977; Baltimore Country Club v. United States, D.C., 7 F.Supp. 607; Williamson v. United States, D.C., 12 F.Supp. 26; Philadelphia *581Cricket Club v. United States., D.C., 30 F.Supp. 141. Then also, they must represent a recurring, contractual obligation extending over an indefinite period of time. Foran v. McLaughlin, 9 Cir., 59 F.2d 158, certiorari denied, 287 U.S. 637, 53 S.Ct. 87, 77 L.Ed. 552.
The golf fees involved in this case do not meet these tests. They are not incident to any class of membership. On the contrary they are payable only by those members, of whatever class, who desire to make personal use of the golf facilities of the club. Nor are they indefinitely recurring obligations. While annually renewable in the absence of notice, the accrual of the obligation is entirely within the individual member’s power. If he does not wish to make use of the golf facilities in the new year he may by notice to that effect divest himself of all responsibility for future golf fees. This, it seems to me, is inconsistent with the statutory concept of dues and membership fees.
In White v. Winchester Country Club, 117 F.2d 146, the Circuit Court of Appeals for the First Circuit, upon facts substantially similar to those here involved, reached the conclusion that annual payments to a country club for golf privileges were not taxable as “dues or membership fees.” That conclusion is in accord, as I have indicated, with the views of all the courts which have considered the subject except the court below in the present and a prior related case. Hardt v. McLaughlin, D.C., 25 F.Supp. 684. The case of Foran v. McLaughlin, supra, upon which the government relies, is not to the contrary, for the monthly greens fees held taxable in that case were a recurring contractual obligation of those members of the Olympic Club who joined the class of Contributing Members which obligation extended over an indefinite period of time regardless of the members’ desire to use the greens. They were obligations incidental to the class of membership and were, therefore, properly taxable as membership fees.
The golf fees of the Mcrion Cricket Club which we are considering were provided for in 1896, long before any tax on club dues was proposed. Neither tax evasion nor avoidance is involved. Being convinced that these fees are charges for the personal use of a special facility of the club and that they are not membership fees I cannot agree that the judgment holding them to be taxable as the latter should be affirmed.