Tennessee Division of the United Daughters of the Confederacy (Plaintiff) donated a portion of the funds used to build the “Confederate Memorial Hall” dormitory at Peabody College. Eventually, Peabody College merged with Vanderbilt University (Defendant) and Plaintiff sued when Defendant changed the name of the dormitory.
When a donee does not comply with the conditions of a gift, the donor is entitled to recover that gift
Over the course of several agreements between 1917 and 1933, Plaintiff agreed to raise and donate money for the construction of a women’s dormitory to be used to house descendants of Confederate soldiers at Peabody College. Part of the agreement dictated that the dormitory would be named “Confederate Memorial.” Later, Peabody College merged with Defendant and in 2000, a new chancellor decided to change the name of the dormitory to “Memorial Hall.” Plaintiff sued Defendant for breach of contract and requested declaratory and injunctive relief and damages. The trial court granted Defendant’s motion for summary judgment and Plaintiff appealed.
When a donee fails to comply with the conditions placed upon a gift, is the donor entitled to recover that gift?
(Mansfield, J.) Yes. When a donee does not comply with the conditions of a gift, the donor is entitled to recover that gift. The summary judgment granted for Defendant must be reversed because Defendant has not shown that it is entitled to judgment as a matter of law. Instead, Plaintiff is entitled to partial summary judgment because Defendant has breached the condition that accompanied Plaintiff’s gift. Defendant is required to either comply with the condition or return the present value of Plaintiff’s gift.
Plaintiff and Peabody College entered into three agreements between 1917 and 1933 in regards to the construction of this dormitory. The three contracts do not establish a commercial agreement in which goods or services are exchanged for money. The contracts lay out the terms of a gift from Plaintiff to Peabody College–this gift came with conditions and Plaintiff is entitled to recover the gift if the conditions are not met. When a donation is made to a charitable organization with conditions on the use of the gift, the gift is treated as a revocable charitable trust or a charitable gift subject to conditions. Here, the donor clearly intended to create a charitable gift subject to conditions. Such a gift is enforceable according to the terms of the document that creates it. If the done fails to meet the conditions, the remedy is limited to the recovery of the gift.
The agreements between Plaintiff and Peabody College laid out three conditions on the gift. One, the gift was to be used to construct a dormitory to be approved by Plaintiff. Two, Peabody College had to allow female descendants of Confederate soldiers to live on the first and second floors rent-free. Three, the hall would bear an inscription naming it “Confederate Memorial Hall.” None of these conditions came with an end date, but by the nature of the project, they were meant to last for the life of the building.
Defendant claims that Defendant and Peabody College substantially performed their obligations under the contracts, that Plaintiff has received full consideration for its gift, and that principles of academic freedom allow Defendant to change the name. These arguments are not persuasive. Defendant claims that a plaque on the entrance of the building describing Plaintiff’s contributions to the construction constitutes substantial performance with the third condition on the gift. However, the 1933 contract expressly required an inscription bearing the name “Confederate Memorial Hall.” Defendant’s argument that Plaintiff has already received enough value for its gift also fails because the parties agreed to the value of the donation in the original agreements. Defendant cannot now decide that Plaintiff’s gift was not worth complying with the conditions. Finally, Defendant cannot claim that academic freedom allows it to keep Plaintiff’s gift, while ceasing to comply with one of the conditions for receiving it. Such a finding would allow universities to shirk legal obligations whenever the university unilaterally decided the obligation inhibited academic freedom. It would also negatively affect the ability of such institutions to encourage future gifts.
When a donee fails to comply with a gift’s conditions, the donor may recover the gift. In light of the change in the value of money since 1933, Defendant must pay Plaintiff the present value of the gift, not the 1933 value, if Defendant persists in renaming the Hall. Reversed and remanded.
(Cain, J.) The court’s determination of the parties’ intent comes from more than just the language of the agreements. The course of the dealings shows that the intent was to name the building “Confederate Memorial Hall.” Also, the dormitory was not meant as a memorial to slavery or the Confederate government.
The court started by looking at the nature of the relationship between the donor and the donee university. Once the court determined that Plaintiff intended to create a conditional gift instead of enter into a contract, the court looked to enforce the terms of that agreement. The appropriate remedy for a donor when the donee fails to follow the conditions set on the gift is recovery of the gift.