Opinion
Decided January 14, 1938.
Appeal from Henderson Circuit Court.
CLAY CLAY for appellant.
ODIE DUNCAN and ALFRED HOLMAN for appellee.
Reversing.
This is an appeal from a judgment of the Henderson circuit court approving the validity of an issue of bonds by the Henderson county school district to refund a floating indebtedness of the district in the sum of $25,000, now evidenced by a note in that amount held by the Farmers Bank Trust Company of Henderson, Ky.
It is asserted that the $25,000 note was given on July 3, 1937, to liquidate lawful obligations of the school board incurred during the school years 1930 to 1936, inclusive, which could not be discharged from the budgeted revenues because of delinquencies in the income accruing to the board. It appears that during the period in question there was a net shortage of $46,177.43 between the amount of revenues anticipated in the yearly budgets and the amount of actual collections. During the same period the school board is asserted to have lived within its budgeted revenues but has incurred obligations over and above its actual collections in the amount now represented by its note to the bank.
So far as we can discover from the record, no attempt has been made to show the validity of the items going to make up the $25,000 note at the bank other than to give the gross figures for the entire period which the alleged shortage represents. There has never been an adjudication of the validity of the funded debt. So far as we are advised, the entire debt, or the greater portion of it, may have been created in one year. It is clear, therefore, that the proof does not measure up to the requirements of section 186c-7, and we are unable to say that the items included in the note funding the indebtedness are valid obligations of the district.
Judgment reversed.