Litigation preceded completion of Bowlus Fine Arts Center


September 18, 2014 - 12:00 AM

(Editor’s note: The following, written by Iolan attorney and local historian Clyde Toland, provides details of the successful litigation that resulted in completion of the Bowlus Fine Arts and Cultural Center as directed in the will of Thomas H. Bowlus.)

In April of 1961 the Board of Education of School District No. 10 (now USD 257) made its written acceptance of the funds and property devised in trust by Thomas H. Bowlus to the school district for the construction of the Fine Arts and Cultural Center. Under the terms of his testamentary gift, the beneficiaries were the school district, the school children, and the citizens of the Iola area.
Mr. Bowlus provided in his will that the plans for this project must be approved by both the Board of Education and Allen County State Bank as Trustee of the Bowlus estate. After more than a year of study and planning — in August 1962 — both parties approved the architect’s plans as meeting the requirements of the will and the needs of the school district in educating its youth in the fine arts.
The Trustee had never disclosed the value of the estate to the Board, advising only that it had budgeted $600,000 to $650,000 for this project. Construction bids were taken on Sept. 27, 1962. Low bids totaled $982,981.
Mr. Bowlus had provided that construction must begin no later than two years after his death or else the Board would forfeit this gift. With this deadline of Dec. 17, 1962, looming and with the Trustee taking no action to accept the low bids, the Board of Education filed suit on Oct. 25, 1962, invoking the equity powers and jurisdiction of the local court for the protection of the beneficiaries.
A few days later, on Nov. 5, 1962, the Trustee signed construction contracts totaling $863,031, a reduction of $119,950 from the lowest bids. The next day, pursuant to the Board’s demand made in court, the Trustee filed its accounting showing the current value of the funds and property that it held in trust for the school district to be $1,329,399.81, a figure well in excess of the lowest construction bids of $982,981.
In signing contracts for the lower figure of $863,031, the Trustee claimed a center that “will efficiently and effectively serve its intended purposes can be built for $863,031 without any change in plan.”
On Nov. 19, 1962, the Board sent the Trustee a detailed letter noting that the reduction in bids by $119,950 was not required by a want of funds in view of the approximate $1,329,000 available to pay both the construction and equipping costs. In fact, after payment of these costs, there still would be a balance of more than $200,000.
In its letter the Board said “it is incredible and appalling what you have done to the artistic appeal and functional use of the Fine Arts and Cultural Center in this unnecessary reduction by you of construction costs.” The Board then proceeded to list as illustrations seven major areas of reduction. An example of these seven areas of omissions included the elimination of practically all interior work and finish work in the classrooms, restrooms, halls and closets on both the first and second floors of the education wing. The omitted work consisted of numerous doors, all painting, all resilient flooring and base, all acoustical treatment on walls and ceilings, all metal toilet partitions and mirrors in two restrooms, all wood risers and framing in both the vocal rehearsal room and band room, etc.
The Board further noted that its required approval under the terms of the Will had not been given to these changes made by the Trustee.
On Nov. 3, 1962, after having been sued only a few days before by the Board of Education, the Trustee had published in The Iola Register a lengthy letter addressed “To the Citizens of School District No. 10, Allen County, Kansas.” This letter was signed by the Allen County State Bank Board of Directors: Tom Bowlus’ brother, G. R. Bowlus; his nephew, G. R. Bowlus, Jr.; his sister-in-law, Kathryn S. Bowlus; his nephew, Burton Bowlus; and the bank’s trust officer, George H. Mack. Their attorney was Howard M. “Tony” Immel, the scrivener of Thomas H. Bowlus’ will.
In this letter the Trustee announced the acceptance of the reduced bids of $863,031 with the assurance that the contractors would start work immediately, thus meeting the two-year deadline. This did occur. The Trustee further claimed in its letter that Mr. Bowlus intended that there be sufficient funds left so that there would be a maintenance fund for the center for 15 years, and thus there would be no tax burden on the school district for that time period. The Trustee claimed that “Tom Bowlus” did not want the community “to be burdened in any way by his gift.”
In its letter of Nov. 19, 1962, to the Trustee, the Board pointed out Mr. Bowlus in his Will actually provided as follows: “Upon completion of the Fine Arts and Cultural Center and the equipping thereof, the residue, IF ANY REMAINING,” shall be held in trust for 15 years for maintenance as provided in his will. Thus, should the construction and equipping of the center take all of the estate, the Trustee had no obligation to provide maintenance. The accounting of the estate value showed that the estate had ample value for both the construction of the center based on the jointly approved plans and for its equipping even if the lowest construction bids of $982,981 were accepted. There would actually still be funds left over for a maintenance fund. Thus, the Board reiterated its position taken in its petition filed with the court that the Trustee accept the lowest construction bids.
Two days later on Nov. 21, 1962, the Board of Education published in The Iola Register “A Report to the Citizens of School District No. 10 and Others Concerned.” The bulk of this report consisted of the verbatim text of the Board’s letter of Nov. 19, 1962, to the Trustee discussed above. That letter had been signed by all members of the Board of Education: Klein Boyd, president; Raymond D. Smith, vice president; Henry L. Bumgardner, O. D.; L. D. Robinson, M. D.; Eugene C. Walton; and Richard C. Cook. Their attorney was Stanley E. Toland. The board members personally paid for the publication cost of the report to citizens.
The underlying issue, though not explicitly stated in either letter, was the ownership by the Trustee, Allen County State Bank, of Mr. Bowlus’ 1,519 shares of stock of the Allen County State Bank itself. This was the controlling interest, and the Trustee had refused to sell it to raise the necessary additional cash for the center’s construction according to the jointly approved plans. As a result of the lawsuit filed by the Board of Education against the Trustee, the Trustee was ultimately forced in December 1963 to sell this controlling interest, which was bought by other members of the Bowlus family who owned the minority stock interest. The sale price was $929,628, which was nearly the amount of the lowest construction bids. Thus, there were more than ample funds for the construction of the Fine Arts and Cultural Center according to the architect’s jointly approved plans.
 In the end, the cost of constructing and equipping the Bowlus Fine Arts and Cultural Center totaled about $1.1 million, and there was left over approximately $800,000 for the maintenance fund. Without the successful litigation filed by the Board of Education, the center would not be the completed crown jewel it has been for a half century.

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