Westcott v. Sioux City
| Decision Date | 20 February 1909 |
| Citation | 119 N.W. 749,141 Iowa 453 |
| Parties | GEORGE E. WESCOTT, Appellee, v. THE CITY OF SIOUX CITY, Appellant, and THE LIBRARY & BUILDING ASSOCIATION OF SIOUX CITY, IOWA, Defendant |
| Court | Iowa Supreme Court |
Appeal from Woodbury District Court.--HON. JOHN H. OLIVER, Judge.
CREDITORS' bill to subject certain property, now in the name of the defendant city, to the payment of a judgment held by plaintiff against the Library & Building Association. The trial court granted the relief asked, and the defendant the city of Sioux City appeals.--Affirmed.
Decree affirmed.
Fred W Sargent and J. N. Weaver, for appellant.
T. F Bevington, for appellee.
Originally the property in controversy was owned by the city of Sioux City, but title was held by certain trustees. On account of its indebtedness the city was not able to construct a library building thereon, and the defendant the Library & Building Association was organized and created under the laws of the State for the purpose of forming and maintaining a library, reading room, and museum for the city, and the erection of a building for the use of such library and for the support and maintenance of the same. This latter corporation was not one for pecuniary profit, and was created on or about October 16, 1890. In February of the year 1891 the city passed a long ordinance in which it was recited that it (the city) could not erect a library building, but that it would be erected by a private corporation upon its own credit, and then purchased by the city and paid for in installments out of the library tax, and that offices could thereby be procured for the city and the use thereof paid for out of the general funds of the city, and a grant was made by said ordinance to the library association of authority to erect and maintain a library for the use of the inhabitants, the city to cause the land in question to be conveyed to the library association upon the agreed consideration of $ 30,000, to be accounted for as payment of that amount of the purchase price upon repurchase by the city. Conveyance was accordingly made of the property to the Library & Building Association. It was also provided in the ordinance that the library association should within eighteen months construct a suitable library building upon the property described, the cost of which should not exceed the sum of $ 150,000. It was also provided that the library association might issue mortgage bonds upon the property to an amount not exceeding $ 80,000, payable at the option of the association, or the owners of the ground, within ten years from date, the bonds to be a lien upon the building and grounds prior and superior to any claim of the city or its library fund for the repurchase of the property. It was also provided that the interest and a part of the principal of the bonds should be paid out of the library tax as a preferred claim. The city also obligated itself to levy a library tax for a sum sufficient to pay the interest on the bonds or notes, to pay $ 5,000 annually of the principal of said bonds and the necessary expenses of operating the library. It was also provided that when the building should have been completed, the association should lease certain rooms therein to the city, the rentals thereof being fixed by the ordinance. This lease was to run for ten years, and the rentals were to be paid quarterly. Provision was made as to how these rentals should be used by the association; but, as this is not regarded as material, we shall not set it forth. Provision was also made for the purchase of the ground and building by the city upon giving thirty day's written notice, the exact language of the ordinance reading as follows:
Whenever the said city of Sioux City shall desire to purchase the said ground and building for said library funds upon one month's previous notice in writing to said company, it shall have the right to take possession of, own and control the same upon payment to said company in full for the same the actual cost of the same, after deducting the outstanding mortgage bonds, the payments thereon theretofore made, and shall also pay eight percent interest on such net unpaid balance, and all unpaid and legitimate operating expenses connected with the management of said building by said company, and the floating or unbonded debt of said company, lawfully incurred in and about said business, and no more, and for the purpose of verifying such cost or expenses the city shall have access to all the books, contracts, vouchers, records and papers belonging to said company, and upon such payment said company shall surrender, convey and transfer to said city for said library fund, said grounds and buildings, furniture and fixtures therein, subject to any outstanding mortgage or other liens thereon.
The ordinance concludes as follows:
Sec. 12. It is the intention of this ordinance that a building shall be provided that shall furnish a suitable place for keeping the public city library, which may ultimately be purchased by said city at its actual cost, and that the said company building it shall not make a net income on the same exceeding 8 percent upon the advances from its own funds made therefor, and that the income from the parts of said building not used at the beginning for library purposes shall be applied to the benefit of said library.
Pursuant to this ordinance and the conveyance made thereunder, the city and the library association entered into a formal written contract, the material parts of which read as follows:
Now, therefore, in consideration of the premises and of one dollar by each of said parties to the other paid, and for the object and intent of said ordinance into effect, and in pursuance of the statutes in such cases made and provided, it is hereby agreed by and between said parties as follows:
First. Said party of the second part shall within the time in said ordinance specified, erect said library building and equip the same for the use of said library, and lease such portion of the same to the city as required and in the manner and on the terms and in all respects as provided and contemplated in said ordinance, and use and apply the funds received from the city...
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