Lupton v. Leander Clark College
| Decision Date | 04 April 1922 |
| Docket Number | 33666 |
| Citation | 187 N.W. 496,194 Iowa 1008 |
| Parties | LOUISE C. LUPTON et al., Trustees, Appellants, v. LEANDER CLARK COLLEGE et al., Appellees; LOUIS LUPTON et al., Interveners, Appellants |
| Court | Iowa Supreme Court |
REHEARING DENIED DECEMBER 15, 1922.
Appeal from Tama District Court.--JAMES W. WILLETT, Judge.
BOTH plaintiffs and interveners appeal from the finding and judgment of the court below, sustaining general equitable demurrers to their respective petitions.
Affirmed.
C. H Walters, Grimm, Wheeler & Elliott, and F. C. Duncan, for appellants.
Struble & Stiger and Deacon, Good, Sargent & Spangler, for appellees.
This is an action to recover of the defendant Leander Clark College the sum of $ 50,000, with accumulations, representing a donation of the principal sum by Leander Clark, a resident of Toledo, Iowa, to said defendant, to aid in the establishment of a permanent endowment fund of defendant college. Leander Clark died testate in 1910. After disposing of certain specific bequests to various persons in his will, he devised and bequeathed the residue and remainder of his estate to Louise C. Lupton, J. L. Lupton, and John Meisner, as trustees of the "Leander Clark estate, " providing that said trustees should have and hold the trust estate for a designated period, and pay one half of the net income therefrom to Louise C. Lupton, one of the trustees above named, and should use and expend the remainder of the net income for "the benefit, comfort, maintenance, and education of the heirs of the body of said Louise C. Lupton," and that the remainder should go to the surviving heirs of her body. The plaintiffs are the trustees named in said will, and intervener Louise C. Lupton is the daughter and sole heir at law of deceased, and the guardian of her minor children, beneficiaries of the residuary estate.
The petition of plaintiffs, which was apparently so drawn as to invite a demurrer, is adopted by the intervener, and made a part of the petition of intervention. It appears from the allegations there that, some time prior to 1881, a corporation was organized under the laws of Iowa, by and under the auspices of a religious denomination known as the United Brethren in Christ, for the establishment at Western, Iowa, of an educational institution to be known as Western College; that, in 1881, Western College was moved to Toledo, Iowa, where it was maintained and conducted as an institution of general education, under the above name, until in 1903, when it trustees, as a part of a plan to raise a permanent endowment, proposed to the public that the college would be given the name of anyone who would donate $ 50,000 to said fund. Leander Clark, long a wealthy resident of Toledo, who had previously made contributions to the support of the college, made a proposition in writing to its board of trustees, accepting the proposal of the college and offering to donate the sum of $ 50,000 for the purpose of laying the foundation of an endowment of $ 150,000, upon terms and conditions fully set forth in his written proposal, which, in substance, was as follows:
He further stated that, to encourage the raising of an endowment fund, he had concluded to accept the proposition made, and to donate the sum of $ 50,000. Among the terms and conditions included was that the sum should be payable in cash or notes bearing interest at not less than 5 per cent per annum, payable annually, and secured by first mortgage on clear and unincumbered farm lands, worth twice the value of the sum secured: this, however, upon the further condition that the college or its friends secure an additional donation to said endowment fund, of $ 100,000 in cash or notes bearing interest at not less than 5 per cent and secured as above stated,--the whole of said additional sum to be raised and paid or secured to the college on or before January 1, 1906. Upon payment of the said $ 50,000 to the college, he required the board of trustees to make provision, by proper amendment to its articles of incorporation, for changing the name of the college from Western to Leander Clark College. The said instrument further recited:
"The whole of said sum of $ 150,000 shall constitute a permanent endowment fund, the principal of which shall be protected and forever held sacred as such, and no part of it shall ever on any pretense, or in any emergency, be pledged or hypothecated for any purpose, or temporarily or permanently loaned to any other fund of the college, but it shall be kept at interest at the best rate obtainable, and secured only by first mortgages on clear and unincumbered farms or lands worth twice the amount secured thereby, and the board of trustees shall establish and continue in perpetual operation the proper agency for keeping said fund fully and securely loaned as herein contemplated."
The concluding paragraphs of the written proposal are as follows:
Time was made of the essence of the offer, which was to become void if the college or its friends failed to raise the additional sum of $ 100,000 on or before January 1, 1906. It further appears from the allegations of plaintiffs' petition that, some time prior to April 23, 1919, Leander Clark College, becoming unable to support and maintain itself as an independent educational institution, entered into negotiations with Coe College, an educational institution duly incorporated under the laws of Iowa, and located in the city of Cedar Rapids, for the association or merger of the two institutions and the transfer by Leander Clark College to Coe College of the $ 150,000 endowment fund. After all arrangements for the association or merger of the two institutions and the transfer of the funds had been fully completed, but before said sum had been actually transferred or delivered to Coe College, plaintiffs commenced this action in equity, which was followed by the filing of a petition in intervention, as already stated, to recover the $ 50,000, with accumulations, if any, alleging a breach of the contract under which the donation was made, and that, by the failure of the trustees and officers of Leander Clark College to maintain and continue to operate the college at Toledo under the above name, the said donation became forfeited and reverted to the estate of Leander Clark, and should be paid either to the trustees named in his will or to his heir at law or to the legatees named in said will.
A temporary injunction was granted by the court below, and continued pending this appeal, restraining the defendants from transferring the fund to Coe College. The sole grounds upon which plaintiffs and interveners seek to prevent the transfer of the $ 50,000, with accumulations, to Coe College are that defendant Leander Clark College breached its contract with the donor when it ceased to exist and function as an educational institution under the name of Leander Clark College; and that, when it terminated its existence, the said sum became forfeited, and reverted to the estate of the donor. Coe College was joined as a defendant some time after the original action was begun; but, in view of the conclusion reached, we need give no particular consideration to the claims of this institution. The demurrers filed to plaintiffs' petition and the petition of intervener were filed on behalf of both the defendant Leander Clark College and Coe College.
Manifestly plaintiffs have no such interest in the subject-matter of this controversy as that they may maintain an action to enjoin the proposed association or merger of the two institutions or the transfer of the endowment fund by the one to the other, unless there has been a forfeiture or breach of the alleged contract which resulted in the reversion of the fund to the estate of...
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