207 N.W.2d 574 (Iowa 1973), 55578, Kinney v. Capitol-Strauss, Inc.

Docket Nº:55578.
Citation:207 N.W.2d 574
Party Name:Joe KINNEY and Sylvia Kinney, Appellants, v. CAPITOL-STRAUSS, INC., an Iowa corporation, et al., Appellees.
Case Date:May 23, 1973
Court:Supreme Court of Iowa

Page 574

207 N.W.2d 574 (Iowa 1973)

Joe KINNEY and Sylvia Kinney, Appellants,


CAPITOL-STRAUSS, INC., an Iowa corporation, et al., Appellees.

No. 55578.

Supreme Court of Iowa.

May 23, 1973

Page 575

Cahill, Lovelace, Poula & Wimpey, Iowa City, for appellant.

Shulman, Phelan, Tucker, Boyle & Mullen, Iowa City, for appellees.



This declaratory judgment action was brought by plaintiffs (lessor) to determine whether under a 'Ground Lease' agreement with defendants (lessee) the latter were obligated for additional rent when, during the course of the lease term, lessee claimed the right to use a portion of the leased area for a commercial campground. Trial court held lessee iwas under no obligation to pay additional rent. We affirm.

Lessor owned land in the northwest quadrant of the Oxford, Iowa, interchange on Interstate 80. In 1967 lessee entered into negotiations to lease a tract for certain uses as an interchange outlet. Originally the leased area was to be a unit. However, during preliminary discussions it was ascertained construction of a service station would necessitate subordination of the land ownership to a mortgage and a similar situation would exist as to a restaurant. For this reason the area as shown by a plat attached as an exhibit to the lease was designated parcel A--1 (service station), parcel A--2 (restaurant) and parcel B (balance of tract). The lease on the service station area (parcel A--1) was by separate instrument and does not concern us here.

The above facts were stipulated. These parties further stipulated the parcel A--2 and parcel B ground lease original draft was prepared by lessee's attorneys, submitted to lessor's counsel, and after several drafts ensued the final draft was executed October 31, 1967.

Thereafter the service station was constructed on parcel A--1 and the restaurant on parcel A--2. Parcel B remained undeveloped until the fall of 1971.

The 'Ground lease' was for a 20 year term with options to renew for three successive five year terms. Particularly pertinent here is part 'II, RENTAL.' Paragraph A thereof provides for monthly rental of $150 'commencing with the completion of the construction of a restaurant building on the premises.' Paragraph B states,

Page 576

'B. In addition to the foregoing rental, Lessee will pay...

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