Plaintiff sues to recover taxes paid by it which were levied by the defendant upon it pursuant to Section 501 of the Revenue Act of 1926 as amended by Section 413(a) of the Revenue Act of 1928.
The section is as follows:
Ҥ 413. Club Dues Tax
“(a) Section 501 of the Revenue Act of 1926 is amended to read as follows:
“ ‘Sec. 501. (a) There shall be levied, assessed, collected, and paid a tax equivalent to 10 per centum of any amount paid—
“‘(1) As dues or membership fees to any social, athletic, or sporting club or organization, if the dues or fees of an active resident annual member are in excess of $25 per year; or
“ ‘(2) As initiation fees to such a club or organization, if such fees amount to more than $10, or if the dues or membership fees, not including initiation fees, of an active resident annual member are in excess of $25 per year.
“ ‘(b) Such taxes shall be paid by the person paying such dues or fees. * * * 26 U.S.C.A. Int.Rev.Code, §§ 1710, 1711, 1712.
Article 36 of Regulations 43, first promulgated in 1917, and in effect since that time, is as follows:
“Art. 36. Social Clubs. — Any organization which maintains quarters or arranges periodical dinners or meetings, for the purpose of affording its members an opportunity of congregating for social intercourse, is a ‘social * * * club or organization’ within the meaning of the Act, unless its social features are not a material purpose of the organization but are subordinate and merely incidental to the active furtherance of a different and predominant purpose, such as, for examT pie, religion, the arts, or business. The tax does not attach to dues or fees of a religious organization, chamber of commerce, commercial club, trade organization, or the like, merely because it has incidental social features, but, if the social features are a material purpose of the organization, then it is a ‘social * * ' * club or organization,’ within the meaning of the Act. An organization that has for its exclusive or predominant purpose religion or philanthropic social service (or the advancement of the business or commercial interests of a city or community) is clearly not a ‘social * * * club or organization.’ Most fraternal organizations are in effect social clubs, but if they are operating under the lodge system, or are local fraternal organizations among the students of a college or university, payments to them are expressly exempt.
* * * * *"
The period for which the taxes in question were paid was July 1935 to January 1938. Plaintiff filed a timely claim for refund of the taxes, asserting as the basis for its claim an opinion of the United States District Court for the Eastern District of Pennsylvania. That opinion was' rendered in connection with two decisions of the District Court in favor of plaintiff, one against the defendant, covering the period January 1932 to February 1935, the •other against one Rothensies, Collector of *187Internal Revenue, covering the period March to June 1935. In each case the Court held that the taxes paid by plaintiff under the section of the statute here involved could be recovered by plaintiff because it was not, during those periods, a social club for tax purposes. Plaintiff’s claim for refund of the taxes here involved was denied by the Commissioner and plaintiff brought this suit.
Our first question is whether we are free to determine whether or not plaintiff was a social club during the period 1935 to 1938 here in question. Plaintiff says we are not; that the question of social club vel non is res judicata by reason of the District Court decisions.
In our opinion plaintiff’s operations for the period July 1935 to January 1938, were, for tax purposes, those of a social club. Laying aside the question of res judicata, it would follow from that opinion that the taxes were properly collected, and may not be recovered. That opinion is in accord with many decisions of this court.1 *It is urged upon us, however, that regardless of that opinion we are bound to conclude, what we do not believe to be true, that plaintiff’s activities were not those of a social club because the District Court decided in other cases, one of which was between the same parties and the other between plaintiff and a collector of Internal Revenue, that plaintiff’s activities from January 1932 to February 1935 were not those of a social club.
Plaintiff’s activities in the latter period, here in question, were not those of the earlier period, previously litigated. They were comparable and similar. We have found that they were substantially the same in nature and extent. But they were a completely different set of events, and they were not the set of events litigated in the earlier cases. We are asked, then, to close our eyes and minds to the facts actually before us, and to give to plaintiff a judgment which we would not give to any other plaintiff whose cause of action had equal merit. We are asked thus to discriminate with regard to a public and recurring duty, the duty to pay taxes, thus setting plaintiff apart from all other taxpayers who resort to this court with similar cases.
The doctrine of res judicata should not be so extended. Any application of the doctrine in tax cases to relieve a taxpayer of, or to subject him to the payment of, a tax in a later year because of litigation with reference to an earlier year, has been criticized.2 A learned commentator has pointed out that the invocation of the doctrine in tax cases has promoted litigation instead of producing peace, as the doctrine is supposed to do.3 The instant case is an example. In addition to trying the facts of plaintiff’s operations for the three years here in question, it has been necessary to try again the facts which were tried before the District Court covering another period of years, in order to determine whether they were so substantially similar that the doctrine of res judicata would have to be considered. The learned authority cited above suggests the following approach to the question: “Where different taxable years are involved in the two cases, res judicata should be applied much more narrowly than has been true in some cases in the past. Not only should it be confined to issues which are identical in the two cases, but the word ‘identical’ should be rigidly construed to apply only to situations where the applicable statute is unchanged and all of the controlling events occurred before the earlier of the tax years.”4
This suggestion seems to us to be wise.
As to the suit in the District Court against the Collector, for the period March to June 1935, immediately preceding the period covered by the present suit, the conclusion of the Supreme Court in Bankers’ Pocahontas Coal Co. v. Burnet, Commissioner, 287 U.S. 308, 53 S.Ct. 150, 77 L.Ed. 325, is that a judgment in a suit against a collector is not res judicata in a later suit against the Commissioner or the United States, because of a lack of identity of parties.
In the other case in the District Court, the parties were identical with the present parties. But the facts were, as we have said, not identical. They were a differ*188ent, though similar, set of events. They consisted of a whole course of conduct from day to day in all its details of an enterprise of considerable scope. They were the kind of events which, though similar, might easily vary from period to period enough to change the judgment of the same tribunal though it held the same view of the meaning of the applicable statute.
The decided cases do not apply the res judicata principle to such situations. In the case of Tait v. Western Maryland Ry. Co., 289 U.S. 620, 53 S.Ct. 706, 77 L.Ed. 1405, the events were as follows: Two predecessors of the railway company had, before 1908 and in 1911, issued and sold at a discount their mortgage bonds. In 1917 the newly formed railway company recognized these outstanding bonds as its obligation. It claimed the right to a deduction from its gross income for income tax purposes for 1918 and 1919 of an amortized proportion of the discount. The Commissioner of Internal Revenue disapproved the deduction, but on litigation through the Board of Tax Appeals and the Circuit Court of Appeals, the Company’s position was sustained. The Company later claimed and sued for refunds for the tax years 1920-1925, the statute, regulations and question at issue being the same. The Supreme Court held that the principle of res judicata was applicable. In that case the events sought to be tried in the second suit were the identical historical events which had been tried in the first. The application of the doctrine of res judicata in such a case is not a precedent for its application here. Other Supreme Court cases have not shown any tendency to extend the scope of the principle in tax cases. 5 Nor have the other Federal Courts applied the principle in cases fairly comparable to this case.6
We conclude, therefore, that we are free to determine whether plaintiff’s activities for the year in question were those of a social club. As already indicated in this opinion, we think they were. The findings of fact show that the social features of the club were not merely incidental, but were a material purpose of the club and an important and substantial part of its activities. This court has frequently held that such clubs are taxable. 7
In view of our conclusions as to the non-applicability of res judicata, and as to plaintiff being a social club, it is not necessary for us to re-examine the question of whether the regulation requiring plaintiff to file powers of attorney from its members in connection with the claim for refund was valid. We therefore state no conclusion upon that question.
Plaintiff’s petition will be dismissed. It is so ordered.
WHALEY, C. J., and JONES and LITTLETON, JJ., concur.See cases cited infra, note 7.
Report of Committee on Federal Taxation of the American Bar Association, 61 A.B.A.Rep. 821 (1936).
Griswold, Res Judicata in Tax Cases, 46 Yale L.J. 1320 (1937).
Griswold, op. cifc at p. 1357.
United States v. Stone & Downer Co., 274 U.S. 225, 47 S.Ct. 616, 71 L.Ed. 1013; Bankers’ Pocahontas Coal Co. v. Burnet, Commissioner, 287 U.S. 308, 53 S.Ct. 150, 77 L.Ed. 325.
See 130 A.L.R. 374 for a collection of the authorities. The District Court for the Western District of Pennsylvania has recently declined to apply the doctrine to a case like the present one. Duquesne Club v. Bell, 42 F.Supp. 123, 1941, C.C.H., par. 9368.
Fisler v. United States, 66 Ct.Cl. 220; Army & Navy Club v. United Stares, 53 F.2d 277, 72 Ct.Cl. 684; Wichita Commercial & Social Club Ass’n v. United States, 2 F.Supp. 476, 77 Ct.Cl. 80; Union League Club v. United States, 4 F.Supp. 929, 78 Ct.Cl. 351; Chicago Engineers’ Club v. United States, 9 F.Supp, 680, 80 Ct.Cl. 615, 621; The Lambs v. United States, 8 F.Supp. 737, 81 Ct.Cl. 216; Century Club v. United States, 12 F.Supp. 617, 81 Ct.Cl. 878; Duquesne Club v. United States, 23 F.Supp. 781, 87 Ct.Cl. 483.