183 Ky. 77 | Ky. Ct. App. | 1919
Opinion of the Court by
Reversing.
In 1916 Boone county voted a bond issue of $200,000 for the construction and reconstruction of its roads and bridges. The bonds were directed to be issued in denominations of $500.00 each, and to draw 4% interest from their date, payable semi-annually on the first day of July and January of each year. The fiscal court-authorized a sale of the bonds serially, and bonds number 1 to and including bond number 187, were sold for par, accrued interest and a small premium. Thereafter, and on April 2, 1918, the fiscal court having discovered that the whole bond issue of $200,000.00 could not be sold upon
“Since the $200,000.00 of the county road bonds were to draw 4% interest, the court found immediately thereafter that the bonds could not be sold at par for the time same were to become due and the court authorized the sale of said bonds with the understanding that if the rate of interest should be increased at any time the owners of the bonds that had been issued heretofore, could by the holders thereof be exchanged for the bonds drawing the greater rate of interest and the court hereby authorized and directs that the said bonds be reissued drawing 5% interest from July 1st, 1918, and that the holders of the present issue be permitted to exchange the 4% bonds owned by them for the 5% bonds of the new issue and that the remainder of the said bonds be sold as the court may direct and the committee heretofore appointed will not sell any of said bonds of the first issue, except enough to pay the claims against the bond fund and these bonds to be sold at par and accrued’interest and the purchasers to have the right to exchange those bonds for those of the new issue. The new issue to be in denominations of $500.00, numbered and due as follows, with interest payable semi-annually:”
(Bond numbers, when due and the amount.)
At the time this order was entered $93,500.00 worth of bonds had been sold and delivered and were then held by the purchasers. To enjoin the county and fiscal court from exchanging the 5% bonds for the old 4% bonds held by the purchasers, the county attorney, Riddell, as a taxpayer and in his official capacity,'instituted this action in the Boone circuit court, setting forth all the facts, including a history of the proceedings in the fiscal court, and copies of the orders made by that court, and prayed an injunction restraining the county and the court from making the exchange of the bonds. A general demurrer was filed to the petition and sustained by the court, and the petition was dismissed. The county attorney prosecutes this appeal. .
The only question presented is: Did the county, through its fiscal court, have authority and legal power to order an exchange of the 5% bonds for the outstanding 4% bonds? Could the fiscal court, without consideration, change the contract between the county and the
The petition stated a cause of action, and .the general demurrer should have been overruled and the relief prayed, in the absence of a showing by defendants, granted.
Judgment reversed for proceedings in conformity to this opinion.