
    BUNKER HILL COUNTRY CLUB v. THE UNITED STATES
    [No. 42005.
    Decided December 3, 1934]
    
      
      Messrs. Amolé R. Bdar and Herman, T. ReiUng for tbe plaintiff. KixMiller, Baar <& Hoffman were on the brief.
    
      Mr. Fred K. Dyar, with whom was Mr. Assistant Attorney General Frcrnh J. Wideman, for the defendant.
   Green, Judge,

delivered the opinion of the court:

This is an action to recover the sum of $22,944 with interest, the principal sum being the amount paid by plaintiff from May 31, 1921, to December 31, 1930, as a tax on initiation fees and dues, and for which a claim of refund was filed and rejected.

The facts established by the evidence are different from those in any other case that we have had before us, and so-far as we know, from those considered by any other court. The issue to be determined is new, although it is quite likely that similar facts exist in many instances where no legal controversy has arisen.

The plaintiff is a corporation organized Under the statute of Illinois in relation to corporations for pecuniary profit. The declared purpose of this organization was to construct,, own, and operate a golf club for the use and benefit of the public generally, also to operate a clubhouse restaurant,, locker rooms, and garage in connection therewith, and to conduct amusement enterprises in all of the branches pertaining thereto. The provisions of its numerous bylaws so far as material to a decision of the case are set out in finding II and will be summarized further on in this opinion.

It is contended on behalf of plaintiff that although it bore the name of a club, the corporation was not in fact a club but merely a profit-seeking concern. This is true if we-consider the corporation in the abstract and the corporate-entity by itself and alone, but this fact does not settle the case. The tax is not upon the corporation but, as we said in effect in Congressional Country Club v. United States, 71 C. Cls. 161, 44 Fed. (2d) 266, upon a privilege, and it applies to dues or membership fees required of the members of a club or organization. We need not determine whether there was a club in the strict sense of the term as it is sufficient if there was an organization, and upon that point we think the evidence leaves no doubt. It is not easy to make a comprehensive and exact definition of the words “organize” and “organization.” Even the dictionary gives us definitions only in very general terms, and we shall not attempt to define the words. Yet we have no doubt that there was an organization as the term is generally understood and as Congress intended to use it. The playing members formed a distinct class by themselves separate from the general public who had no right to use the golf course or any of its facilities or any other right pertaining thereto. They also stood in a distinct relation to each other and made themselves subject to rules and regulations affecting the use of the golf course. They had the special privilege of using the golf course, which was made the more valuable by limiting the membership to three hundred members with the obvious purpose that the golf course should not be overcrowded. The president, Andresen, appointed a membership committee from the playing members which under the bylaws as amended was charged with the duty of passing on the applications for membership, but Andresen seems to have largely controlled the matter. It was in fact an exclusive club or organization, although not so exclusive as some. The fact that the playing members seldom or never exercised all of their rights and privileges is immaterial. They were associated together for the common purpose of engaging in a sport with special privileges and facilities which made its exercise more agreeable. The fact that they had no property rights in connection with the corporation does not affect the question now before us.

It must also be said that the sporting features connected with the “ club ” were not merely incidental but were absolutely essential to the existence of the club, and the bylaws, or regulations, to which the playing members submitted themselves were necessary to make it attractive.

Under all of the circumstances recited above, we are clear that the dues and initiation fees in question were taxable and that as plaintiff collected them it was liable for the tax.

It might also be said that while there is no evidence of any purpose to evade taxation in the plan and scheme under which the club was operated, if plaintiff’s contention should be sustained it would seem that the plan adopted afforded an easy method of escaping the tax.

It follows that plaintiff’s petition must be dismissed, and it is so ordered.

Whaley, Judge; Williams, Judge; LittletoN, Judge; and Booth, Chief Justice, concur.

ON MOTION FOR NEW TRIAL

Green, Judge,

delivered the opinion of the court.

The motion for new trial is based upon the provision of the statute which imposes a tax of 10 per centum of any amount paid: (1) As dues or membership fees to any social, athletic, or sporting club or organization, * * * ” and it is said that the dues taxed in this case were not paid to any club or organization but to the plaintiff corporation, which was not connected with any organization of the members except in a purely commercial way. This is contrary to the facts as to the matter of payment. The members in one sense paid the tax to the corporation, but not in such a sense as to give the corporation any ownership thereof. On the contrary, the tax on the dues was paid to the corporation merely as an agent to remit the amount so paid to the Government. The findings show that the plaintiff “collected” the tax, entered it on its books under a separate account as payable to the United States, and remitted the same to the collector. Whatever view we may take of the relation of the club members to the corporation, no tax on the dues was paid by the corporation out of its own funds, and no cause of action accrued to it against the Government.

What we have said above is sufficient to dispose of the case, but it should not be inferred therefrom that we consider that the statute imposing the tax has no application thereto. On the contrary, we think the provisions of the' statute were intended to apply to such cases as we are now considering.

In Congressional Country Club v. United States, 71 C. Cls 161, we held that the tax was imposed on the enjoyment of a. privilege, and to the same effect is the decision in Wild Wing Lodge v. Blacklidge, Collector, 59 Fed. (2d) 421. It is payable by the members of the organization without assessment. If we were to consider the provisions with reference to the-levy of the tax alone the language would seem to lend some-force to the contention of plaintiff, but in another part of' the act it is provided that “every person [corporation] receiving any payments for such admission, dues, or fees shall collect the amount of the tax imposed * * * from the person making such payments * * * and pay the taxes so collected to the collector of the district.” The two-provisions must be taken together in ascertaining the intent of Congress, and when this is done we are clear that the intention was to impose the tax under the circumstances shown to exist in the case at bar.

It follows that the motion for new trial must be overruled, and it is so ordered.

Whaley, Judge; Williams, Judge; Littletoh, Judge; and Booth, Chief Justice, concur.  