Bekins

On December 13, 1941, appellee, Compton-Delevan Irrigation District, filed a petion under chapter 9 1 (§§ 81-84) of the Bankruptcy Act, 11 U.S.C.A. §§ 401-404 . Appellee is a taxing agency, namely, an irrigation district organized and created under the laws of California for the purpose of constructing, improving, maintaining and operating certain improvements and projects devoted chiefly to the improvement of lands within its boundaries. 2 The petition was filed with the District Court of the United States for the Northern District of California, that being the court within whose territorial jurisdiction appellee is located.

Appellee, at the time of filing the petition, had outstanding $384,000 of bonds (384 bonds of the face value of $1,000 each), of which $11,000 (11 bonds of the face value of $1,000 each) were owned and held by appellants, Milo W. Bekins and Reed J. Bekins, as trustees under the last will of Martin Bekins, deceased. The 11 bonds owned and held by appellants were Nos. 409, 410, 411, 413, 414, 415, R115, R136, R137, R138 and R139.

The petition stated that appellee was insolvent and unable to meet its debts as they matured; that it desired to effect a plan…