Tennessee Division of United Daughters of Confederacy v. Vanderbilt University

Court of Appeals of Tennessee
2005 Tenn. App. LEXIS 272, 2005 WL 1033520, 174 S.W.3d 98 (2005)

ELI5:

Rule of Law:

When a charitable organization accepts a gift subject to specific, agreed-upon conditions, it cannot later unilaterally disregard those conditions. If the organization chooses to no longer comply with the conditions, the donor's remedy is the recovery of the present value of the gift.

Facts:

Starting in 1913, the Tennessee Division of the United Daughters of the Confederacy (Tennessee U.D.C.) entered into a series of agreements with the George Peabody College for Teachers (Peabody College) to raise funds for a new women's dormitory.
The Tennessee U.D.C. successfully raised over $50,000, which constituted more than one-third of the dormitory's total construction cost.
A 1933 contract between the parties specified that the donation was conditioned on Peabody College placing an inscription on the building naming it 'Confederate Memorial.'
The agreements also stipulated that women descendants of Confederate soldiers nominated by the Tennessee U.D.C. would be allowed to live in the dormitory rent-free.
The dormitory, named 'Confederate Memorial Hall' with the name inscribed in stone on its pediment, was completed and dedicated in 1935.
In 1979, Peabody College merged with Vanderbilt University, and as part of the merger, Vanderbilt agreed to assume all of Peabody's legal obligations.
Following the merger, Vanderbilt eventually ceased providing the rent-free housing benefit to descendants of Confederate soldiers.
In 2002, Vanderbilt's Chancellor, Gordon Gee, decided to change the name of the building to 'Memorial Hall,' citing the negative association of the word 'Confederate' and its barrier to creating an inclusive campus environment.

Procedural Posture:

The Tennessee Division of the United Daughters of the Confederacy (Tennessee U.D.C.) filed suit against Vanderbilt University in the Chancery Court for Davidson County (trial court) for breach of contract, seeking an injunction, a declaratory judgment, and damages.
Both Vanderbilt and the Tennessee U.D.C. filed motions for summary judgment in the trial court.
The trial court granted Vanderbilt's motion for summary judgment and denied the Tennessee U.D.C.'s motion, ruling that it was 'impractical and unduly burdensome' for Vanderbilt to maintain the name.
The Tennessee U.D.C., as appellant, appealed the trial court's decision to the Court of Appeals of Tennessee, with Vanderbilt University as the appellee.

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Issue:

Does a university that accepted a conditional charitable gift for the construction of a dormitory breach the gift agreement by renaming the dormitory, thereby requiring the university to either honor the condition or return the gift's present value to the donor?

Opinions:

Majority - Koch, Jr., P.J., M.S.

Yes. A university that accepted a conditional charitable gift breaches the agreement by renaming the dormitory, and must either honor the naming condition or return the gift's present value. The transaction between the Tennessee U.D.C. and Peabody College was a charitable gift subject to conditions, not a trust or a standard commercial contract. The 1933 agreement, which required the name 'Confederate Memorial,' is valid because Peabody waived the condition precedent of government funding by its subsequent performance in constructing the building according to the agreement's terms. Vanderbilt's defenses—including substantial performance, having given full consideration, and academic freedom—are without merit. Replacing a stone inscription with a small plaque is not substantial performance, and academic freedom does not permit a university to unilaterally disregard its voluntarily assumed contractual obligations. The proper remedy for breaching the conditions of a gift is the recovery of the gift; to be equitable, this requires returning the present value of the 1933 donation, calculated using the consumer price index to account for inflation, not the nominal amount.

Concurring - Cain, J.

I concur fully with the majority's reasoning and conclusion. The parties' intent that the building be named 'Confederate Memorial Hall' is indisputable, established not only by the written contracts but also by nearly seventy years of consistent conduct. Vanderbilt's position that the name is a memorial to slavery is contradicted by historical evidence, including a statement from a former Vanderbilt Chancellor and a 1989 plaque indicating the building was named in memory of the 'fathers and brothers' of the U.D.C. members who fought in the Civil War. The name was intended to honor the soldiers themselves, not the institution of slavery. While the remedy of returning the gift's present value is appropriate, it is a reluctant concurrence, as it is the only viable alternative to a mandatory injunction that might impede the university's core mission.

Analysis:

This decision establishes a significant precedent for the law of conditional charitable gifts, reinforcing that donor intent, when memorialized in a gift agreement, is legally enforceable for the intended duration of the condition. It clarifies that a donee's change in philosophy or mission does not excuse it from its voluntarily accepted obligations. The ruling's most impactful element is the remedy: requiring the return of the donation's present value rather than its historical nominal value. This prevents institutions from being unjustly enriched by decades of inflation and effectively provides strong protection for donors against future breaches by making such breaches financially consequential.

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