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<br />As conditions did not improve at all the following year <br />action at law ,",vas begun by John Hess and other water <br />right owners against the La Junta and Lamar Canal <br />Company asking for a receiver to manage the canal <br />and distribute the water pro rata, and also applYing for <br />an injunction against the sale of any more water rights <br />from the Canal. <br /> <br />Every material allegation of the complaints in the John <br />Hess suit was sustained and subsequently affirmed by <br />the Supreme Court of the State. The restraining order <br />was granted, and about thirty days after Mr. \N. C. Burke <br />was appointed receiver. In the interim. before the re- <br />ceiver was appointed, the canal company executed a <br />mortgage to the Colorado Securities Company upon the <br />canal property to the amount of S28.000.00, which mort- <br />gage, with other collateral, was disposed of to the First <br />National Bank of Denver, and never redeemed. This <br />was an express violation of the water right contracts <br />and deeds, which provided that the canal was able to <br />be turned over free of all encumbrance. <br /> <br />Shortly after the receiver took charge of the canal a <br />cloudburst occurred between the headgate and Horse <br />Creek which damaged several miles of the canal to such <br />an extent that the farmers were without ",vater for thirty <br />days in the midst of the irrigating season. The cost of <br />repairs amounted to about S1 0,000.00. and as no funds <br />were available the court authorized the receiver to is- <br />sue his certificates in payment thereof. <br /> <br />Again during the following year of 1894 extreme floods <br />in the Arkansas River washed around the headworks of <br />the Canal, leaving the headgate on the opposite side of <br /> <br />15 <br />