Messrs. E. L. McHaney, Jr., S. Lasker Ehrman, and Grover T. Owens, all of Little Rock, Ark., for petitioner. [308 U.S. 371, 372] Mr. G. W. Hendricks, of Little Rock, Ark., for respondents.

Mr. Chief Justice HUGHES delivered the opinion of the Court.

Respondents brought this suit in the United States District Court for the Western Division of the Eastern District of Arkansas to recover on fourteen bonds of $1,000 each, which had been issued in 1924 by the petitioner, Chicot County Drainage District, organized under statutes of Arkansas,1 and had been in default since 1932

In its answer, petitioner pleaded a decree of the same District Court in a proceeding instituted by petitioner to effect a plan of readjustment of its indebtedness under the Act of May 24, 1934,2 providing for Municipal-Debt Readjustments. The decree recited that a plan of readjustment had been accepted by the holders of more than two-thirds of the outstanding indebtedness [308 U.S. 371, 373] and was fair and equitable; that to consummate the plan and wit