Fleming v. Casady

• Decision Date: 16 December 1926
• Docket Number: No. 36664.,36664.
• Citation: 202 Iowa 1094,211 N.W. 488
• Parties: FLEMING v. CASADY ET AL.
• Court: Iowa Supreme Court

202 Iowa 1094

211 N.W. 488

FLEMING

v.CASADY ET AL.

No. 36664.

Supreme Court of Iowa.

Dec. 16, 1926.

Appeal from District Court, Polk County; Lester L. Thompson, Judge.

Suit to adjudge a trust terminated, to establish an undivided interest in improvements, and for reappraisement under long time lease. Decree for defendants. Plaintiff appeals. In part affirmed, in part reversed.

Stevens and Albert, JJ., dissenting in part.William E. Miller and Jesse A. Miller, both of Des Moines, for appellant.

Henry & Henry, of Des Moines, for appellee Casady.

Car, Cox, Evans & Riley and Fred P. Carr, all of Des Moines, for other appellees.

MORLING, J.

The property in controversy is the quarter block at the southwest corner of Seventh and Walnut streets, in the city of Des Moines, known as the Masonic Temple Block, and described as lots 7 and 8 in block 2. The ground was leased by William McClelland to the Masonic Temple Association for 20 years from September 1, 1883. Under this lease, the Masonic Temple Association, in 1883, erected on the leased ground a building which, with additions, is still standing. On October 14, 1902, a new lease for the term of 50 years, commencing on the 1st day of September, 1903, was entered into, by which the association agreed to pay yearly, for the first 10 years, $4,000, besides taxes and special assessments. The lease further provided:

“At the commencement of the second 10 years of this lease, and at the commencement of each 10 years thereafter, the ground, exclusive of the buildings or improvements, is to be appraised by disinterested appraisers, who shall be citizens and owners of real estate in the city of Des Moines. The appraisement to be under oath and signed by the parties. * * * The appraisers shall be selected, one by the said party of the first part, and one by the party of the second part, and if the two thus selected cannot agree, * * * the said two appraisers to select a third appraiser, and as rent for the second term of 10 years * * * (provided, a purchase by either of the parties hereto shall not be made as hereinafter provided) the said party of the second part shall pay annually an amount equal to four (4) per cent. of the value of said ground as fixed by said appraisers, * * * and also shall pay all taxes and special assessments * * * at the expiration of the second 10 years herein provided for, and at the expiration of each 10-year period thereafter during the continuance of this lease, in case said McClelland shall not then be living, the buildings and improvements theretofore or hereafter made or erected by the said party of the second part and then remaining on said ground shall be also appraised by the disinterested appraisers heretofore provided for, and the heirs or assigns of the party of the first part are to have the right to purchase said buildings and improvements at such appraisements, provided they shall so elect within 90 days after the expiration of said term of 20 years, and, in case the said heirs or assigns shall not elect to purchase said buildings and improvements at such appraised price, then the said party of the second part shall have the right to purchase the said ground at and for the price fixed by said appraisers as the value thereof exclusive of the buildings and improvements provided it so elects to do within 90 days after the expiration of the said time when said heirs or assigns of the said first party have the right to purchase the said buildings and improvements, and if the said McClelland shall be then living at the expiration of said 20 years from the commencement of this lease, then the Masonic Temple Association, party of the second part, shall have the right to purchase said ground at the expiration of any of the periods of 10 years when the same shall be appraised, as hereinbefore provided for, after the death of the said McClelland.

The heirs or assigns of said McClelland to have the right first to purchase the buildings and improvements. It being understood that, during the lifetime of said McClelland, the said party of the second part does not have the right to purchase said ground. In case the said heirs or assigns of the said McClelland shall not elect to purchase said buildings and improvements at such appraised price and the said party of the second part does not elect to purchase said ground in accordance with the stipulations hereinbefore made, then the said party of the second part shall pay as rent for the said ground for the period of 10 years thereafter the sum of four (4) per cent. of the appraised value of said ground annually, and all taxes and assessments, the rent to be quarterly in advance, as hereinbefore stated, and at the end of each 10 years the same appraisement is to be made in the same manner, and each party to have the rights and options, as above hereinbefore provided for, until said buildings and improvements are purchased by the heirs or assigns of said McClelland or said ground shall be purchased by said party of the second part.

At the expiration of the term of 50 years first herein mentioned, if the heirs or assigns of said McClelland should not elect to purchase the buildings and improvements as hereinbefore provided, then the said party of the second part shall have the right of purchase of the ground, as hereinbefore provided, and in case the said party of the second part does not elect to purchase said ground in accordance with the stipulations hereinbefore made, then this lease shall be extended for another term of 10 years from that date and the said party of the second part shall pay as rent therefor the sum of four (4) per cent. of the appraised value of said ground annually, and all taxes and assessments, the rent to be paid quarterly in advance, as hereinbefore stated, and at the end of each 10 years, the same appraisement to be made in the same manner and each party to have the right and options, as above and hereinbefore provided for, until said buildings and improvements are purchased by said heirs or assigns of said McClelland, or said ground shall be purchased by said party of the second part. * * *”

The lease provided for re-entry on six months' default, and that it should take the place of the first lease. The lease, together with all of the interest of the Temple Association in the buildings and improvements, was assigned by the association on November 2, 1908, to the defendant Young Realty Company, which assumed the payment of the rent from December 1, 1908.

The trust in question was created by the will of William McClelland. He died December 4, 1907, unmarried, leaving a will dated May 4, 1897. This will appointed the defendant Simon Casady as executor and directed that the lots in question--

“and other real property that I may own at my death then under lease, and the rents arising therefrom after payment of all taxes and assessments thereon and any debts that I may owe at my death, shall, at my death, be held by my executor hereinafter named, in trust for the following persons in common; that is to say,

For my brother, Nathaniel McClelland, one-third (1/3) interest therein.

For my brother, Charles McClelland, one-third (1/3) interest, therein, and

For my brother, Henry McClelland, one-third (1/3) interest, therein, and

Whereas, lots seven (7) and eight (8) in block two (2) aforesaid are now under lease to the Masonic Building Association and said lease may be further extended or modified during my lifetime.

Now, therefore, my executor shall retain title to said lots and any other property owned by me under lease at my death, in trust, as aforesaid, and collect and pay over the net income thereof semiannually to the persons, above named in this clause of this will, one-third part to each until said lease shall be terminated, unless the legatees herein named (or in case of their death or of the death of either of them, then their heirs) shall each and all freely and mutually petition the executor named in this will or his successor to sell said property subject to the lease. In case they shall so petition and desire the sale of said property subject to the lease thereon, then my executor shall sell said premises subject to said lease and distribute the net proceeds thereof as above directed, to wit, one-third (1/3) part to my brother Henry McClelland, and one-third (1/3) part to my brother Nathaniel McClelland, and one-third part (1/3) to my brother Charles McClelland. In case no sale shall be made of said premises as above indicated during the existence of the leases thereon, then at the termination of said lease or leases, said premises shall be sold by my executor for the best price obtainable, and the net proceeds arising therefrom shall be paid over to the above-named parties in the proportions specified. If either of the above-named beneficiaries should not survive me, then I will and direct that his lawful heir or heirs shall take his share, and as the case may be, in the same manner as if named in this will.”

Charles McClelland predeceased the testator, leaving nine children, of whom eight, in the years 1908 to 1910, conveyed their respective undivided one twenty-seventh interests in the lots to defendant, Lafayette Young, Sr. The deeds expressed that they were subject to the lease referred to and conveyed the grantor's interest in the lease and were also in terms subject to the probate proceedings, claims, and costs in the William McClelland estate.

The other two brothers died after the testator, leaving a number of children and grandchildren. In 1917 and 1922 interests derived through these brothers were conveyed to L. Young, Sr., under similar deeds, and one interest was contracted to L. Young, Jr. By means of these, L. Young, Sr., and L. Young, Jr., acquired 482/1080. On July 27, 1923, all of the remaining beneficial interests, including the interest of the vendor in the contract with L. Young, Jr., were conveyed to plaintiff. Plaintiff and the...