Petition for a Writ of Certiorari — Thomas v. El Dorado Irrigation District

In the Supreme C

United States

OctToBER TERM, 1942

No. 305

E. J. THomas, J. R. McDonatp, J. R.

Mason, E. G. Wuutams and A. C.

CARPY,

Petitioners,

Vs.

Et Dorado Irrigation District,

Respondent.

PETITION FOR WRIT OF CERTIORARI

to the United States Circuit Court of Appeals

for the Ninth Circuit

and

BRIEF IN SUPPORT THEREOF.

W. Cosurn Cook,

Berg Building, Turlock, California,

Counsel for Petitioners.

Subject Index

Page

ns Ser Set OE CUPEIONRIN oi ok o's cise vind shdceks exec ens 1

I Pak SP ab cs ins eae way 4A a nsaaerag thay nesvee 2

ENS VON eK Ra ae CE IN SAR ye bn CURE RRR OR Er bes 2

REO LO ee PC re eae Eee ian 2

Summary Statement of the Matter Involved............... 3

UNE RPOIIE: 5 655) ks tn ae casio srbpenentisecégenton 10

Reasons Relied on for Allowance of the Writ.............. 11

Brief in Support of Petition for Certiorari................ 15

Factual Background of the Case................ 0c eee cece 15

lL The plan of composition discriminates unfairly against

the appellants who are creditors of the public debtor

and in favor of the receiver of the California National

Bank. The preference in favor of that creditor consti-

ge ge oS a a ei eo errraage 16

Title 11, Sec. 96, U. S. C. A. applies to private bank-

CUA Ng Bh 6a es Fin Sop cee nhc OO EN 20

Il. The interlocutory decree in this case is not good be-

cause the court did not follow the mandatory provi-

sions of the Bankruptcy Act requiring it to investigate

the circumstances surrounding the deposit of the se-

curities and the question whether fiscal agents were or

were not properly compensated, and failed to make a

finding and adjudication on that question............ 20

Ill. As a matter of law the findings, decree and record fail

to establish that the plan is fair; nor can fairness be

determined from the record, findings or decree....... 23

Conelusion ....... de hehe cd Belated os vidided bo WE CIM G sane 30

Table of Authorities Cited

Cases Pages

American United Mutual Life Ins. Co. v. City of Avon

. © +5 > & FY § Fi a . Serres 5, 11, 19, 22

Anderson Cottonwood I. D. v. Klukkert, 13 Cal. (2d) 191.. 29

Anderson Cottonwood I. D. v. Zinzer, 51 A. C. A. 791 (Apr.

I Ne re Pn ae nee a eb gh oo s SEM OTE 29

Bekins v. Lindsay Strathmore Irrigation District, 114 Fed.

SK hte hina ch iment ss kins pore ds chk oo egnee 16, 23

Bolton v. Terra Bella Irr. Dist., 106 Cal. App. 313......... 29

Calif. Loan & Trust Co. v. Weis, 118 Cal. 489............ 29

Case v. L. A. Lumber Products Co., 308 U. S. 106, 60 S.

SO sik hau Saheedenn Peka ise ur Rees ce ox e eR S TKI 21

Clarke v. White, 12 Pet. 178, 9 U. S. (L. Ed.) 1046....... 5, 19

Consolidated Rock Products Comany v. DuBois, 312 U. S.

a echitiaiins hihi au a eas 6 cg aah GaWate ead We ae 23, 24, 25

Ce Bek ek ee i Be Sooo od oes 0 kn sin 6 en cs ce 1

Covell v. South San Joaquin Irrigation District, No. 9788

ind Wake aan nasi ake ekS Sida ek ee KAAS * KAKA Re 24, 26n

Detective Comics, Inc. v. Bruns Publications, Inc., 28 Fed.

NE, FE se wien Soaks dvccancds svanbevac cabs tare 22

Evergreen Farms Co. v. Willacy Co. Water Control & Impr.

et, TS Pek: FOR) bss eins ios tis nee 20

John Haneock Mutual Life Insurance Co. v. Bartels, 308

ie & © 5 & Yo Bere errr errr TT: 5, 19

Jordan v. Palo Verde Irrigation District, 114 Fed. (2d) 691 23

Lorber v. Vista Irr. Dist., 127 Fed. (2d) 628........ 14, 28, 24, 25

Luehrmann v. Drainage Dist. No. 7, 104 Fed. (2d) 696, 308

Oe ea a a i eee 16, 18

Mason, J. R., Appellant v. Paradise Irrigation District,

DE, TH, TP ins ooi'ee okc bx xsd0des Keven 25, 26

Moody v. James Irrigation District, 114 Fed. (2d) 685..... 23

TABLE oF AuTHUORITiES CITED iii

Pages

Penmack Corp. v. Esterbrook Steel Pen. Mfg. Co., 27 Fed.

SC Skala pO bANS $444 piu ABE eae U be eke K 22

Roberts v. Board of Public Instruction, 117 Fed. (2d) 943.. 5,19

Selby v. Oakdale Irr. Dist., 140 Cal. App. 171............ 29

Texas Hotel Corp. v. Waco Dev. Co., 87 Fed. (2d) 395.... 5,19

U. 8. v. Greer Dr. Dist., 121 Fed. (2d) 675............... 5, 19

West Coast Life v. Merced Irrigation District, 114 Fed.

ED Sawin walt ene y KUCWib Aad GAS OW Line's Pack Ga ees 17, 18, 23

West Palm Beach, City of, 96 Fed. (2d) 85............... 18

maemo: v. Boeves, Bir VU. B, GAG. ck vce cevacccsdcere B19

Codes and Statutes

Act of August 16, 1937, c. 657 (50 Stat. 654).............. 2, ol

Act of June 22, 1938, ¢. 575, See. 3 (b) (52 Stat. 940).... 2

Bankruptcy Act of 1898, Chapter IX.................... 3, 12

California Irrigation District Act (Cal. Stat. 1897, p. 254) 2,3

iG. Sp TA eas UME. Ty BI) oo kino ceva cee ccivaane 29

ee RR ae ae: - | ee en 5

ee. Ae TUM, MOE, BOO, MIO) «vs vc incccccnnccccncs 29n

Sec. 60 (Cal. Stat. 1919, p. 669)...............c00nee, 7,8

California Political Code, Sec. 3785............. 0.00 c00ce 29n

Judicial Code, Sec. 240 (a) (28 U.S. C., para. 347 (a))... 2

Municipal Bankruptcy Act of May 24, 1934, e. 345 (48

A RS RARE ele Sida EI eC a S CREaa 2

TE RR eae ee eA, Te Cy, ee a Ra Ee 10, 13, 21

ne ee eg 10, 12, 17, 19, 20

a ne 2

IE tr A i i ce ie 2,3,5

Sn AR ce 5

a a eign wae 17

Miscellaneous

Federal Rules of Civil Procedure, Rule 52................ 22

eee

Iu the Supreme Court

OF THE

Anited States

OcToBER TERM, 1942

No.

\

E. J. THomas, J. R. McDona.p, J. R.

Mason, E. G. Wiuiams and A. C.

CaRPY,

Petitioners,

—

Vs.

Et Dorapo IRRIGATION District,

Respondent.

ZA

PETITION FOR WRIT OF CERTIORARI

to the United States Circuit Court of Appeals

for the Ninth Circuit.

To the Honorable Harlan Fiske Stone, Chief Justice

of the United States, and to the Associate Justices

of the Supreme Court of the United States:

Petitioners pray that a writ of certiorari issue to

review the decision (R. 306) of the Circuit Court of

Appeals for the Ninth Circuit made in the above en-

titled cause on March 30, 1942, rehearing denied with

2

amendment to opinion May 29, 1942, which affirmed

the interlocutory decree of the District Court of the

Northern District of California, Northern Division,

rendered against petitioners on March 8, 1941, (R,

255, 263.)

OPINION BELOW.

Opinion of the Circuit Court of Appeals, 126 Fed,

(2d) 922, ...... Fed. (2d) ....... (R. 292, 307.)

JURISDICTION.

The decision in the Cireuit Court of Appeals was

rendered March 30, 1942, and rehearing denied with

amendment to the opinion May 29, 1942. (R. 306, 307.)

The mandate was stayed until disposition of the case

by this Court. (R. 308.) The jurisdiction of this

Court is invoked under Section 240 (a) of the Judicial

Code (28 U.S. C., paragraph 347 (a)).

STATUTES INVOLVED.

Municipal Bankruptcy Act of May 24, 1934, ¢. 345,

(48 Stat. 798), 11 U. S. C. 301-303, adding Sections

78-80 to the Bankruptey Act of 1898; Act of August

16, 1937, ¢. 657 (50 Stat. 654), 11 U. S. C. 401-404,

adding Sections 81-84; and Act of June 22, 1938, ¢.

575, Sec. 3 (b) (52 Stat. 940). Principal California

Statute involved is ‘‘the California Irrigation District

Act’’, Cal. Stat. 1897, p. 254, as amended.

—

SUMMARY STATEMENT OF THE MATTER INVOLVED.

This is a proceeding brought by the respondent

El Dorado Irrigation District, a California irriga-

tion district, for confirmation of composition of debts

under Chapter IX of the Bankruptcy Act of 1898

as amended. (11 U. 8. C. Sec, 401-404.)

The matter came on before the District Court for

hearing February 27, 1940 (R. 49), on the petition

fled by the El Dorado Irrigation District, herein-

after called the district, filed October 7, 1938 (R. 2,

23) and the answer and objections to the petition

filed by the petitioners herein who are creditors of the

district. (R. 23.)

The district is an agency of the state organized

under Cal. Stats. 1897, p. 254 as amended (R. 2),

popularly known as ‘‘the California Irrigation Dis-

trict Act’’. The district comprises 30,702 acres of

land situate in El Dorado County, California. (R. 2.)

The office of the district is located in the City of

Placerville, in that county. (R. 2.)

The district had issued $688,000 principal amount

of interest bearing public bonds dated March 1, 1927

(R. 14) in denominations of $1000 bearing 6% inter-

est, payable semi-annually and represented by inter-

est coupons (R. 3) and which mature from January

1, 1948 to January 1, 1967 (R. 12), none of said bonds

maturing until 10 years after the date of the filing

of the petition. The district also had outstanding

$24,437.77 in warrants. (R. 14.)

The district applied to the Reconstruction Finance

Corporation (herein referred to as the R. F. C.), for

4

a loan of $360,500 to refinance this debt (R. 14) on the

basis of 50.5% of the principal and 33-14% of a por-

tion of the interest. (R. 19.) The loan was granted

September 26, 1934 (R. 67) and the district proposed

to issue 4% refunding bonds for the amount of the

loan to be delivered to the R, F. C. (R. 19.)

After obtaining the loan from the R. F. ©, to

enable the district to undertake its refunding opera-

tion, 95% of the bonds were deposited in escrow in

1935 (R. 67) for delivery to the treasurer of the dis-

trict upon payment of $505 per $1000 bonds, plus a

small amount of interest.

This district on February 9, 1935 filed a bankruptey

petition under the first municipal bankruptey act in

which proceeding a judgment of dismissal (R. 130)

was entered after that act was held unconstitutional.

In that proceeding, the Court had made an order (R.

64, 67) authorizing the R. F. C. to purchase 634 bonds

of the 688 bonds of the district and the warrants then

deposited in escrow.

Based on the title thus acquired the R. F. C. filed

a consent to this second bankruptey proceeding (R.

19) reciting that it had purchased $664,000 of bonds

and $24,437.77 of warrants of the district, this being

96% of the bonds and warrants of the district.

These dates and recitals are important because the

first point which the petitioners seek to have reviewed

in this Court is the point that the district subsequent

to 1935 paid off one of the warrant creditors at the

rate of 8214% of its claim, thereby, petitioners con-

tend, creating an unlawful preference and tainting the

_ a

4)

composition with bad faith. (This was 8214% of both

principal and interest, the interest amounted to more

than half as much as principal.)

Both bonds and warrants are of the same character.

Section 39 of the California Irrigation District Act,

Stats. Cal. 1931, page 122, provides for one levy to be

made annually against the value of the land of the

district for both the warrants and bond indebtedness.

Both are payable from the same source and there-

fore are in the same class. ‘Title 11 U. S. C. See.

403 (b).

The loan obtained from the R. F. C. was slated to

pay roughly 50.5% of principal of bonds and of war-

rants. (R. 14, 15.) After obtaining this loan from

the R, F. C. the district filed its first bankruptey peti-

tio February 9, 1935. (R. 129.) A judgment was

entered dismissing the bankruptcy petition. (R. 130.)

Thereafter the district made an offer of compromise

which was accepted by the California National Bank,

receiver holding $16,286.33 including interest of war-

rant indebtedness. (R. 155, 132.) It is contended by

petitioners that the plan of composition was thereby

abandoned and could not thereafter be approved on

the basis of 50.5 cents. Roberts v. Board of Public In-

struction, 117 Fed. (2d) 943; U.S. v. Greer Dr. Dist.,

121 Fed. (2d) 675; Clarke v. White, 12 Pet. 178, 9

U.S. (LL. Ed.) 1046; Zavelo v. Reeves, 227 U. 8. 625;

Texas Hotel Corp. v. Waco Dev. Co., 87 Fed. (2d)

395, 399; John Hancock Mutual Life Insurance Co.

v. Bartels, 308 U. S. 180, 60 S. Ct. 221; American

United Mutual Life Ins. Co. v. City of Avon Park,

dll U, S, 138, 61 S. Ct. 157.

6

It is perfectly obvious that the change in the plan

of composition omitting reference to the warrant in-

debtedness is a bold subterfuge to avoid the charge

of bad faith made by petitioners. This is obvious

from the R. F. C.’s ‘‘acceptance’’ of the plan of

warrant liquidation as well as the bond plan. (R. 19.)

The board of directors of the district in its resolution

adopt a plan for composition of the entire bond and

warrant debt. (R. 14.) The Court had authorized

the purchase of warrants as well as bonds. (R. 65,

67.) The plan of composition therefore still undeni-

ably includes the warrants.

Findings and decree were entered in this case

March 8, 1941. (R. 241, 243.) Prior thereto Congress

passed Section 3, Public 669, 76th Congress, approved

June 28, 1940, as follows:

‘Before concluding the hearing, the judge shall

carefully examine all of the contracts, proposals,

acceptances, deposit agreements, and all other

papers relating to the plan, specifically for the

purpose of ascertaining if the fiscal agent, at-

torney, or other person, firm, or corporation pro-

moting the composition, or doing anything of such

nature, has been or is to be compensated, direetly

or indirectly, by both the petitioner and the

creditors thereof, or any of such creditors—

either by fee, commission, or other similar pay-

ment, or by transfer or exchange of bonds or

other evidence of indebtedness whereby a profit

could acerue—and shall take evidence under

oath to make certain whether or not any such

practice obtains or might obtain.

‘“‘After such examination the judge shall make

an adjudication of this issue, as a separate part

—

7

of his interlocutory decree, and if it be found

that any such practice be possible, he shall forth-

with dismiss the preceeding and tax all of the

costs against such fiscal agent, attorney, or other

person, firm, or corporation promoting the com-

position, or doing anything of such a nature, or

against the petitioner, unless such plan be modi-

fied within the time to be allowed by the judge

so as to eliminate the possibility of any such prac-

tice, in which event the judge may proceed to

further consideration of the confirmation of the

plan.”’

There is no evidence in the record on this matter.

There was no examination on oath or otherwise by

the Court to determine whether or not the practice

frowned upon by Congress had obtained or could ob-

tain. ‘Che burden of proof is on the district. Jn re

Cook, 104 Fed. (2d) 981.

The third point which petitioners make is that the

plan of composition is unfair and that there is no

evidence in the record to sustain the legal conclusion

that the district can pay no more than 50.5 cents.

None of the bonds will mature until 1948. Food prices,

labor, clothing and all materials, have advanced

sharply. Rents and land values have risen. The most

that the taxpayers in this district should have sought

was an adjustment of interest. Most of the material

facts in the record are stipulated. It was stipulated

that the assessed value of the bare lands of the district

approximated $2,000,000. (R. 98.) The average un-

collected taxes for nine years was only 7.4% (R. 98)

whereas tax levies are made for 15% more than the

budget under Section 60 of ‘the California Irrigation

eae

—

8

District Act’’, Cal. Stat. 1919 page 669. The County

of El Dorado assesses the valne of the land in the dis-

trict at $921,000 (R. 134), and the improvements on

these lands at $913,000. Yet a plan paying $360,500

is approved. And all of this is exclusive of the real

property in the City of Placerville, which is algo

within the irrigation district and subject to unlimited

ad valorem taxation by the district. The county in

which this city is situated assesses the land within the

city at $296,350 and the improvements at $787,280, yet

no account is taken of the taxpaying ability of the

property within the city. All land sold at tax:sale to

the district has been resold and placed back on the tax

roll (R. 223) proving that the value of the security

for the whole debt is ample to pay the debt in full.

Testimony from rural inhabitants operating only

about 600 acres out of at least 30,000 acres was relied

upon for proof of the fairness of the drastic scaling

down of tax secured indebtedness herein demanded.

The aggregate city and county assessed value of all

lands, improvements inside of the district is the sum

of $2,917,730 and it was stipulated that this was not

over 50% of the actual value, so that the real value

of this property subject to tax would equal $6,000,000.

(R. 134.) This is almost 1000% of the old indebted-

ness, and almost 2000% of the composition offer, of

$360,500.

The County of El Dorado, Placerville Grammar

School District, the El] Dorado High School district

overlap this area, and none of the bonds of these

districts have been worth on the market less than par

(R. 135) nor have any of these issues been in default

since 1928. (R. 135.)

9

The capital assets of the district including office

buildings, water rights, reservoirs and pipe lines are

the fair value of approximately $600,000. (R. 136.)

The Court failed to take into consideration or even

to require evidence of the duty and ability of the real

property in the City of Placerville to pay irrigation

district taxes. All the land of this substantial city is

forever liable to the last city lot to pay taxes for the

bonds sought to be scaled down. Yet the city is sub-

stantially ignored as a taxpaying factor. The revenue

collecting ability of the district was not gone into ex-

cept as to farmers holding about 600 acres of pear

orchards.

The City of Placerville is included in the boundaries

of the district and comprises 1160 acres. (R. 219.)

It is the famous ‘“‘Hangtown”’ of California gold rush

days only it is not an abandoned city but a thriving

and important mountain city with a population of

2320 as the census will show. It is a county seat and

even in the days of horse drawn vehicles registered

over 3000 tolls per day over its transcontinental car-

riage route.

No testimony whatever was introduced as to the

wealth of this little city nor of its tax paying ability.

The witnesses who testified told mainly of ups and

downs of the Bartlett Pear industry, utilizing but

20% of the acreage of the district and which is the

most important crop in the district. (R. 227, 155, 61,

62.)

But not only the pear growers on 600 acres are obli-

gated to pay taxes. (R. 176.)

10

The studies made related to these 600 acres only

and consequently the ‘‘ability to pay’’ was not the

ability to pay of the taxpayers holding 30,000 acres,

nor land in the City of Placerville, but of 600 acres

only.

SeenEeEEEEnEEeenee

QUESTIONS PRESENTED.

1. Where a municipal bankruptcy plan of compo-

sition was accepted prior to 1936 by over 90% of the

bondholders who surrendered their bonds and accepted

5014 cents on the dollar of principal in full settlement

of their claims and thereafter the public debtor, and

prior to the enactment of the amended municipal

bankruptey law and (after the original municipal

bankruptcy law had been declared unconstitutional)

pays one of its important creditors at 8214% of prin-

cipal and 8214% of interest and after the amended

municipal bankruptcy law was enacted files its peti-

tion again for composition of its debts and seeks a

judgment requiring its remaining original creditors to

accept 50.5% of principal alone, does the payment of

821% to its one creditor constitute an unlawful pref-

erence and bad faith so as to invalidate the plan of

composition, as petitioners contend ?

2. Does Section 96, 11 U. S. C. apply to a munici-

pal bankruptcy case wherein a preference is shown

in favor of one of the creditors?

3. Is an interlocutory decree valid which was

entered after the enactment of c. 438, Secs. 2, 3, 54

Stat. 668, 669, requiring the Court to investigate the

PI EE EES Wie IE SPE ELAN LIN seat inter oor tena ot Se ee ace cee a Re

—

11

circumstances surrounding the deposit of the securities

and whether the fiscal agents of the district were or

were not improperly compensated, where the Court

made no such investigation?

4. Where the bonds of a public debtor are secured

by the unlimited ad valorem power of taxation upon all

the lands within its boundaries whether agricultural,

industrial, mining or urban, and where evidence intro-

duced to show the fairness of the plan of composition

concerned only the ability of a certain small section

of the agricultural area and did not include an exam-

ination of the ability of 5/; of the lands, nor of the

area of an important city within that area to pay

taxes, and the property in that city is equally and

irrevocably subject to taxation to pay the last dollar

of irrigation district indebtedness, is the plan of com-

position not unfair as a matter of law?

5. Where the findings and decree contain only

conclusions of law as to the fairness of the plan of

composition, should the case not have been remanded

for special findings on the facts?

REASONS RELIED ON FOR ALLOWANCE OF THE WRIT.

1. We submit that this Court should decide each

of the ‘‘Questions presented’’ set out above.

In American United Mutual Life Insurance Com-

pany v. City of Avon Park, 311 U. 8. 138, this Court

for the first time considered the procedure under the

municipal bankruptcy act, and declared:

—

PEEL LGR EI I LENCE HE ONIN TES ENTE SAAT ERY EYRE LD AIR YE PME LIN PGES LEN ASD

12

“Beyond that is the question of unfair dis-

crimination to which we have adverted. Compo-

sitions under Ch. IX, like compositions under the

old Sec. 12, 11 U. S. C. A. Sec. 30, envisage

equality of treatment of creditors. Under that see-

tion and its antecedents, a composition would not

be confirmed where one creditor was obtaining

some special favor or inducement not accorded

the others, whether that consideration moved

from the debtor or from another. In re Sawyer,

Fed. Cas. No. 12395; In re Weintrob, D. C. 240

F. 532; In re M. & H. Gordon, D. C. 245 F. 905.”

We submit it is an essential feature of all composi-

tion proceedings that creditors should receive equality

of treatment. Where all other creditors received 50.5

cents of principal and one creditor received 82.5 cents

of principal and interest, there is not equality of treat-

ment and this Court ought to determine, we submit,

whether the principle of equality of treatment applies

to municipal bankruptcy cases.

2. The Court below has decided another important

question of law incorrectly, we submit, which is

whether where one creditor has been preferred by re-

ceiving a bonus payment to induce him to accept the

plan of composition, the statutory rule as to prefer-

ences set forth in Tit. 11 U. 8S. C. Sec. 96 cures the

preference. The lower Court has so held. We submit

the conclusion is erroneous and establishes a principle

which should not be followed or sanctioned in munic-

ipal bankruptcy cases. We submit Sec. 96 does not

apply to a composition case under Chap, IX of the

Bankruptcy Act.

—

13

3. The trial Court has completely ignored the

specific direction of the bankruptcy statute contained

in the amendment of June 28, 1940. (c. 438, Secs. 2,

3, 54, Stats. 668, 669.) By this section the Congress

directed that the judge before concluding the hearing

should make an examination ‘‘specifically tor the pur-

pose of ascertaining if the fiscal agent, attorney or

other person, firm or corporation promoting the com-

position—has been or is to be compensated, directly or

indirectly, by both the petitioner and the creditors

thereof’, and that the judge should make an adjudi-

cation of this issue as a separate part of his decree.

This mandatory instruction was not followed, either

in the examination directed or in the interlocutory

decree. We submit this Court ought to declare that

such direction in the statute is mandatory.

4. We submit that as a matter of law where the

examination in the trial Court pertained only to one-

sixth of the lands within the public debtor, which

lands are the security for the bonds sought to be scaled

down, and there is an important city in the district,

and no consideration is given to the taxpaying ability

of the area within the city or in five-sixths of the land

not intensively cultivated, the plan of composition is

not shown to be fair as a matter of law, and this Court

ought to determine that all important sources of tax-

paying ability should be considered by the Court.

5. Where the findings and decree contain only

conclusions of law as to the fairness of the plan of

composition, the case should have been remanded for

further findings, There is a conflict in the decision of

14

the very lower Court from which this proceeding :

stems, the conflict being between the decision in this ;

ease and in the case of Lorber v. Vista Irr. Dist., 127 B.

Fed. (2d) 628. This Court should, we sulanit: de- 4

termine the question involved.

Wherefore, petitioners pray that a writ of certiorari 2

be issued out of and under the seal of this Honorable q

Court, directed to the United States Circuit Court of q

Appeals for the Ninth Circuit, commanding that Court 4

to certify and send to this Court for its review and _

determination a full and complete transcript of the —

record and of the proceedings of said Court in the 4

case numbered and entitled in its dockets as “No, —

9851, E. J. Thomas, J. R. McDonald, J. R. Mason,

E. G. Williams and A. C. Carpy, Creditors of the El —

Dorado Irrigation District, Appellants, v. El Dorado E

Irrigation District, Appellee”, and that the decree of —

said Court be reversed by this Court with directions —

to dismiss the bill, and for such other relief as to this —

Court may seem proper.

Dated, Turlock, California,

August 12, 1942.

EK. J. THoMas,

J.R. McDonatp,

J. R. Mason,

E. G. WILLIAMS,

A. C. Carpy,

W. Conurn Cook,

Counsel for Petitioners. E

Petitioners. —

‘ 3