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Law School Case Brief

Tenn. Div. of the United Daughters of the Confederacy v. Vanderbilt Univ. - 174 S.W.3d 98 (Tenn. Ct. App. 2005)

Rule:

A conditional gift is enforceable according to the terms of the document or documents that created the gift. Tenn. Code Ann. § 35-13-103 (2001). If the recipient fails or ceases to comply with the conditions, the donor's remedy is limited to recovery of the gift. Because noncompliance results in a forfeiture of the gift, the conditions must be created by express terms or by clear implication and are construed strictly.

Facts:

This appeal involves a dispute stemming from a private university's decision to change the name of one of its dormitories. An organization that donated part of the funds used to construct the dormitory filed suit in the Chancery Court for Davidson County asserting that the university's decision to rename the dormitory breached its 70-year-old agreement with the university and requesting declaratory and injunctive relief and damages. Both the university and the donor filed motions for summary judgment. The trial court, granting the university's motion, determined that the university should be permitted to modify the parties' agreement regarding the dormitory's name because it would be "impractical and unduly burdensome" to require the university to continue to honor the agreement. The donor organization appealed.

Issue:

Did the university breach the conditions placed on the donor's gift and, therefore, should be required to return the present value of the gift to the donor if it insists on renaming the dormitory?

Answer:

Yes

Conclusion:

The court held: (1) because plaintiff did not claim that it intended to create a revocable charitable trust when it entered into the agreements with the college, the contracts reflected a charitable gift subject to conditions; (2) the contracts did not specify the duration of the conditions, but the court concluded that the conditions were limited to the life of the building itself; (3) the original placement of the plaque did not constitute substantial performance; (4) defendant's legal obligation to comply with the conditions of the gift agreement arose defendant's own decision to enter into a merger agreement with the college, so defendant's assertions of academic freedom did not apply; (5) because defendant presented no legal basis for permitting it to keep the gift while refusing to honor the conditions attached to it, defendant had to either return the present value of the gift to plaintiff or abide by the conditions originally placed on the gift.

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