Naylor

Plaintiffs doing business in the County of Los Angeles under the firm name of “The Beverly Hills Club”, seek to recover taxes paid during the period of June 1, 1947 to January 31, 1950, under Section 1700(e) of the. Internal Revenue Code, 26 U.S.C.A. § 1700 (e).

Prior to December 31, 1947, Mr. A. E. Sutherland was associated with plaintiffs in this venture. On that date he sold his interest in the partnership to W. A. Naylor. Thereafter, the .plaintiffs continued doing business under the said fictitious name.

The evidence disclosed that the club is operated for the sole financial benefit of the plaintiffs. The plaintiffs and Sutherland organized the club. All applications for membership are passed on by either one of the plaintiffs. Guest cards are issued at the request of a member, only after Connors or the manager of the club have approved them. The initiation fee is $120.00 and monthly dues are $7.20. Plaintiffs paid the tax imposed by Section 1700(e) together with the tax applicable to dues of social clubs. Section 1710 Internal Revenue Code, 26 U.S.C.A. § 1710 . Among the facilities *310 offered to the members are a gymnasium, a steam room, handball courts, dining rooms, a…