or

the court may direct that a supplemental summons issue, and that supplemental pleadings be made." Id. § 760. "The court may, upon the trial, or at any other stage of the action, before or after judgment, in furtherance of justice, and on such terms as it deems just, amend any process, pleading, or other proceeding, by adding or striking out the name of a person as a party, or by correcting a mistake in the name of a party, or a mistake in any other respect or by inserting an allegation material to the case; where the amendment does not change substantially the claim or defense, by conforming the pleading or other proceeding to the facts proved. And, in every stage of the action, the court must disregard an error or defect, in the pleadings or other proceedings, which does not affect the substantial rights of the adverse party." Id. § 723. In view of these broad provisions of the statute, it cannot be said that the trial court was without power to bring in, as parties plaintiff, those persons who had become interested in the realty during the pendency of the suit. The manner in which the power was exercised is a question of discretion and not of law. The court had the power to order and direct that the grantees of the premises, pending the action, should be made parties by amendment of the pleading or otherwise as the case requires. The two parties that were brought in by the amendment did not ask to state their case by a pleading, and did not need any pleading whatever for the protection of their rignts and interests. The defendants were permitted to meet the new situation in any way that it could be met, after the service of a supplemental complaint. The judgment in the case is a perfect protection to the defendants' rights, since they cannot be interfered with in the operation of their railroad until everybody interested in the property has joined in a conveyance of the easements. Koehler's Case, 159 N. Y. 218, 53 N. E. 1114; Pegram's Case, 147 N. Y. 135, 41 N. E. 424; Domschke's Case, 148 N. Y. 343, 42 N. E. 804. It is apparent, therefore, that the learned counsel for the defendants complains of proceedings had at the trial, all of which were matters of discretion. We are not able to see that the discretion was improperly exercised, but the learned appellate division doubtless had the power to revise the decision of the trial court in that respect, and if it had, and had expressed its decision in the manner required by the Code, this court would have no power to interfere with it; but the time and the manner of the amendment made at the trial is all that the defendants complain of, and no question of law is involved.

We said in the Koehler Case, supra, that, where a plaintiff in one of these equity suits conveys the property pending the litigation, he may make a timely motion, on notice to the defendant, for an order bringing in his grantee, and that when the record is so

amended the trial may proceed as if the conveyance had not been made. We adhere to that view now, but it was not intended in that case to prescribe any rule of practice for the courts of original jurisdiction, nor was it intended to question the power of the court at the trial to order the amendment when the new parties were present, asking for it, and the only question to be considered was the right of the defendant to a reasonable opportunity to meet the new issues, if any, arising from the introduction of new parties. If the amendment created any new issues in this case, the defendants' rights were protected by the ruling of the court allowing an adjournment, and permitting any proof to be made that was in any way pertinent to such issue. The only question is whether a court of equity may, upon the trial, admit new parties to the record when they ask to be heard, and when their presence is necessary for a complete determination of the controversy. When all the parties are before the court, as in this case, we entertain no doubt with respect to the power to order the amendment in the manner and upon the conditions that it did. It was an exercise of discretion by the trial judge in furtherance of justice, and no rule of practice or principle of law was violated. We think there was power in the court to order the amendment as it did, and hence the order appealed from should be reversed, and the judgment of the special term affirmed, with costs.

PARKER, C. J., and BARTLETT, HAIGHT, MARTIN, VANN, and LANDON, JJ., concur.

REPEAL OF STATUTE-EFFECT-PENDING CASES-APPEAL STREET RAILROADS-CONSENT OF ABUTTING OWNERS - CROSSING RAILROAD.

1. Under Laws 1892, c. 677, § 31 ("Statutory Construction Act"), providing that the repeal of a statute shall not affect or impair rights accrued or acts done before it takes effect, a pending appeal, in proceedings by a street-railroad company to acquire the right to cross the tracks of a railroad company at a point where they intersect a highway on which the streetrailroad tracks are laid, was not affected by the enactment of Laws 1897, c. 754, which made changes in the procedure to acquire such right.

2. On appeal from the decision of a referee, the appeal will not be disposed of on a theory not presented to the referee.

3. Under Laws 1890, c. 565, § 91, providing that street railroads shall not be built in the highways of a town without the consent of the town boards; and section 12, providing for the procurement of the right of one road to cross the tracks of another, and for determining the manner thereof and the compensation to be

paid therefor,-a street railroad company owning a road which is to be built from one town into another, which has obtained the consent of the authorities of a town within which a crossing is to be made to the use of the highway of such town by the street-railroad company, may maintain an action to acquire the right to cross the tracks of a railroad company which intersects the highway on which the street-railroad company's tracks are laid, though it had not the consent of the other town into which it proposed to build its road.

4. Under Laws 1890, c. 565, § 91, providing that a surface street railroad shall not be built on any street or highway without the consent of the owners of one-half in value of all the property abutting on the street, a consent by the requisite number of the abutting property owners given to certain promoters of a proposed corporation, their assigns and legal representatives, to the construction of a surface road, which is subsequently assigned to a corporation, is sufficient to authorize the construction of a surface street railroad in the highway by the assignee, and a railroad over whose tracks the street-railroad company has instituted proceeding to procure a right to cross at a point where they intersect the highway cannot question the sufficiency of such consent.

firmed. We think that the petitioner was entitled to maintain the proceeding, and that the judgment of dismissal proceeded upon an erroneous construction of the statute applicable to such cases. It will be quite sufficient to indicate briefly the reasons and grounds upon which such conclusion is based:

1. The new statute, passed in May, 1897, to go into effect on the 1st of July following, has no application to this case. Whether the judgment entered on the report of the referee is right or wrong must depend upon the law applicable to the case when the decision was made, and not upon some law passed subsequently. It is a general rule in the construction of statutes that they are not to be given any retroactive effect when the language employed is fairly capable of any other construction. The new statute of 1897 was not intended to affect pending cases, but was prospective in its operation. In re Van Kleeck, 121 N. Y. 701, 25 N. E. 50; Railroad Co. v. Van Horn, 57 N. Y. 473; In re Miller's

Proceedings by the Geneva & Waterloo Railway Company against the New York Central & Hudson River Railroad Company and the Fall Brook Railway Company to determine the manner in which plaintiff's street-car tracks should cross the defendants' railroads, and the compensation to be paid therefor. From a judgment of the appellate division affirming a judgment entered on a report of a referee dismissing the action, plaintiff appeals. Reversed.

Charles A. Hawley, for appellant. Albert H. Harris, for respondents.

O'BRIEN, J. The plaintiff is a street-railroad company duly incorporated in the year 1893. In January, 1895, it instituted this proceeding under section 12 of the railroad law to acquire the right to cross the defendants' tracks at a point where they intersect the highway upon which the petitioner's road is constructed. The matter was tried before a referee, who, in February, 1897, dismissed the proceeding, holding that the petitioner had not shown any right to maintain it. A judgment of dismissal, with costs, was entered, and subsequently affirmed at the appellate division. 53 N. Y. Supp. 1104. On May 22, 1897, chapter 754 of the Laws of 1897 was enacted, to go into effect on the 1st of July thereafter. This statute made some important changes in the procedure in order to acquire the right in question. The learned counsel for the defendant contends, in the first place, that the proceedings were properly dismissed by the referee under the law existing when the decision was made; but, if not, then the new law of July 1, 1897, has placed such insurmountable obstacles in the petitioner's way that it is impossible now for it to maintain this proceeding, and hence that the action of the courts below should be af

v. O'Brien, 111 N. Y. 1, 18 N. E. 692, 2 L. R. A. 255. Moreover, it has been held that proceedings of this character pending at the time of the passage of the new law were not affected thereby, but were saved from its operation by section 31 of the statutory construction law. People v. New York Cent. & H. R. R. Co., 156 N. Y. 570, 51 N. E. 312; Id., 158 N. Y. 410, 53 N. E. 166. The proceedings in this case were pending in the courts when the new act was passed, and hence the judgment must be reviewed here upon the law existing at the time the decision complained of was made.

2. The statute then in force provided, in substance, that unless the two railroads could agree with respect to the terms and conditions upon which the crossing should be made, those matters should be determined by commissioners appointed by the court, "as is provided in the condemnation law." It was assumed by the parties in this application for the appointment of commissioners that, since they were to be appointed in the same manner as in proceedings for condemnation, the petitioner is bound to prove all the facts necessary to maintain the latter proceeding. The learned counsel for the street-railroad company contends upon this appeal that proof of the consents of the local authorities and of the abutting owners was not a condition precedent to the right to maintain the proceedings, as the referee held, and in support of this contention he has cited authorities which are said to apply. In re Lockport & B. R. Co., 77 N. Y. 561; Geneva & W. Ry. Co. v. New York Cent. & H. R. R. Co., 90 Hun, 9, 35 N. Y. Supp. 339, affirmed 152 N. Y. 632, 46 N. E. 1147. Without passing upon that question now, we think that the appeal should stand or fall upon the theory that the case was tried and submitted to the referee, and not upon a new theory, not presented at the trial, or distinctly passed upon by the ref

eree. It seems to have been assumed by both parties at the hearing that proof of such consents was necessary in order to maintain the proceeding; and, if the petitioner failed to make this proof, we ought not to disturb the decision below upon some other ground, or upon some new theory of the case.

The street railroad is about seven miles in length, and the line runs through a rural town and two villages. each having a distinct municipal government, and different authorities in charge of the highways. The crossing in question is wholly in the town, and the petitioner produced the consent of the highway commissioners of that town to the construction of the railroad. It is admitted in the opinion of the learned court below that this paper is sufficient in form and substance to meet all the requirements of law providing for the consent of the local authorities in control of the highway. Whether a steam railroad crossing a highway in the town should be intersected by a street railroad at the same point was a question to be determined by the authorities of the town in which the crossing was located. The authorities of some other town or village had no power to consent, and were not concerned with the question. The paper produced proved that, so far as the local authorities of that town were concerned, the petitioner was in the lawful use of the highway for the purpose of operating a railroad. In re People's R. Co., 112 N. Y. 578, 20 N. E. 367. We therefore concur with the learned court below with respect to the consent of the local authorities, and hold that the statute was complied with in that respect.

3. The petitioner's application has been defeated in the courts below on the ground that it failed to comply with the statute with respect to the consents of the requisite property owners on the line of the road in this same town. If, upon that point, the petitioner made the necessary proof before the referee, the proceedings should not have been dismissed. The petitioner produced at the hearing two separate instruments, which it is admitted were executed in proper form to express the consent of the abutting property owners in such cases, and these instruments were duly executed by the requisite number of persons in the town owning property of the required value on the line of the road. One of these papers is signed by 13 abutters, whereby they consented to the construction of a railroad on the highway by the petitioner, which had previously been incorporated. This paper is not challenged in any respect, but it is conceded that the parties who executed it did not represent the requisite amount of property on the line of the railroad in the town. Another instrument, signed by 30 abutters prior to the incorporation of the petitioner, was also produced. In this paper the property owners consented that two individuals named therein, their legal representatives and assigns,

might construct a street railroad in the highway. After the petitioner became incorporated the two individuals named in the consents assigned them, through other parties, to the railroad. These consents are, in form and substance, sufficient, unless they are inoperative by reason of the fact that they were procured by, and given to, the two individuals who were promoters of, and interested in, the construction of the road, instead of the railroad itself. It is admitted that these two instruments contain the consents of the owners of the requisite amount of property on the line of the road in the town, and the only question to be considered is whether the consents in the paper last described were invalid for the reason that they did not run directly to the railroad, but to individuals, through whom they were transferred directly to the railroad. The learned referee held that they were invalid, and in this ruling he has been sustained by the learned court below upon appeal. The reason for condemning these consents was that it would be contrary to public policy and to the spirit of the law to allow individuals to procure the consents to themselves, and then, as they might, sell them to the highest bidder. We think that this is a remote danger, at best; but, in any event, it should not be invoked to destroy consents given and acted upon, without some proof that the parties who procured them contemplated their use for purely commercial purposes. When it appears that consents were neither given nor received in good faith for the purpose of facilitating the construction of a railroad, but for some other purpose, not contemplated by the statute, the discussion of such a question might be timely. But no inference of that character can be drawn from the face of the papers in this case. It is common practice, and perhaps common prudence, for the projectors of a railroad to employ parties in advance to procure rights of way, consents, or like privileges to be used after the incorporation. The fact that the railroad acquires such rights through an intermediary by assignment, instead of directly from the property owners themselves, does not affect their va lidity. What the constitution and the statute requires in such cases is simply the consent of the property owner that the highway through his property may be burdened with another easement in the form of a railroad, and when such consent is fairly and in good faith given to one interested in the railroad, and by him transferred to the corporation, we are unable to see why it should not be treated and considered as valid as if it ran in terms to the railroad itself. The instrument in question contains a recital of the motives of the parties, if that is at all important. They all state that the projected railroad would be a benefit to them and to their property, and that for value received they are willing that it should use the high

way for its operations. We think that every purpose of the statute was complied with when the property owners gave the consents, and they were transferred by assignment to the corporation, and the railroad was constructed upon the faith of this action of the property owners. It is not open now to another railroad, for the purpose of defeating an application to cross its tracks, to impeach such consents as invalid. If there is any reason whatever to question the validity of such consents, that right should be limited to the state itself or to the property owners affected. Jones v. Town of Tonawanda, 158 N. Y. 438, 53 N. E. 280. The decision of the referee disposed of two applications by this petitioner to procure a crossing at two points in the town, one over the tracks of the New York Central, and the other over the tracks of the Fall Brook Railroad, of which the Central is the lessee. Both applications involved the same questions, and the proceedings in both were dismissed on the same ground. The order and judgment in both cases should be reversed, with costs, and the proceedings remitted to the special term for another hearing.

PARKER, C. J., and BARTLETT, HAIGHT, MARTIN, VANN, and LANDON, JJ., concur.

Order and judgment reversed, etc.

(163 N. Y. 340)

LOPEZ et al. v. ROWE et al. (Court of Appeals of New York. June 5, 1900.)

FRAUDULENT CONVEYANCES-DEFAULT JUDG

MENT-INSOLVENT CORPORATIONS-CREDITORS' SUIT-APPELLATE COURT-PRIORITY OF LIENS-EXECUTIONS-MISTAKE OF DEPUTYNUNC PRO TUNC ENTRY-APPEAL-REVERSAL WITHOUT NEW TRIAL.

1. Where plaintiff, who was an attaching creditor, filed a complaint to have judgments against his debtor in favor of defendants set aside, on the ground that such judgments were suffered to give the defendants a preference over other creditors of the corporation, which complaint was dismissed, the appellate court had no authority, on reversing the decision of trial court, to hold defendants' judgments invalid without awarding a new trial, since no opportunity was given to litigate the question of their validity.

2. Under Stock Corporation Law, § 48, providing that when a corporation is insolvent, or its insolvency is imminent, no judgment shall be valid which is suffered by its officers with the intent to give a preference to any particular creditors over others, where defendants obtained judgments against an insolvent corporation in November, 1894, and on December 3, 1894, plaintiff levied on the property under an attachment, and there was no evidence that the officers of the corporation were guilty of any act other than mere nonresistance to the securing of the judgments to which it had no valid defense, such judgments did not come within the condemnation of the statute, and hence were not invalid.

3. Under Code Civ. Proc. §§ 1406, 1407, giving preference to the execution first delivered, and making the same rule applicable where executions and warrants of attachments are lev

ied on the same property, where plaintiff filed a creditors' suit to set aside judginents obtained against an insolvent corporation, a part of which were set aside as suffered with the intent to prefer such creditors, and others were sustained, the setting aside of the invalid judgments in no way gave the plaintiff any right to a preference over those sustained as valid, but the liens of such creditors attached and existed according to their legal priority, since the invalid judgments were set aside, not only as to the plaintiff, but as to all creditors of the corporation.

4. Where appellants obtained liens on the personal property of an insolvent corporation by virtue of executions to satisfy judgments, the fact that such executions were returned "nulla bona" through the mistake of a deputy, and the returns so made were set aside "nunc pro tunc" as of the date when made, did not postpone appellants' liens in favor of a subsequent attaching creditor.

Appeal from supreme court, appellate division, Fourth department.

Action by Calixto Lopez and others against Charles H. Rowe and Frank Campbell, impleaded with the Merchants' & Farmers' National Bank of Dansville and others. A judgment of the special term dismissed the complaint as to Charles H. Rowe and Frank Campbell, and set aside judgments previously rendered in favor of the Merchants' & Farmers' Bank and the Manufacturers' & Traders' Bank against the Cohocton Valley Cigar Company as in preference of creditors, and awarded judgment to the plaintiffs in preference thereto; which judgment was reversed in the appellate division as to the dismissal in favor of Charles H. Rowe and Frank Campbell, and prior judgments in their favor against the Cohocton Valley Cigar Company held invalid as in preference of creditors, without awarding them a new trial; otherwise the judgment was affirmed. 46 N. Y. Supp. 91. From the judgment of the appellate division defendants Charles H. Rowe and Frank Campbell appeal. Judgment of appellate term reversed, and that of special term modified.

John F. Parkhurst, for appellants. David Hays, for respondents.

MARTIN, J. This action was brought by the plaintiffs, as attaching creditors of the Cohocton Valley Cigar Company, to set aside certain judgments obtained by the defendants against the corporation, upon the ground that they were suffered in violation of the provisions of section 48 of the stock corporation law. The Cohocton Valley Cigar Company was a corporation engaged in manufacturing cigars in the village of Cohocton, N. Y. The defendant banks and the defendants Campbell and Rowe were judgment creditors of that company. It had been doing a prosperous business until August, 1893, but, owing to losses amounting to $30,000 or more, it, as early as January, 1894, became insolvent. On November 28, 1894, three judgments were recovered against it,-one by Rowe for $416.92, another by the Merchants' & Farmers' Bank for $5,139.47, and still an

other by the Manufacturers' & Traders' Bank for $7,850.85. Two days later the Merchants' & Farmers' Bank recovered another judgment for $321.57, and Campbell recovered two judgments amounting to about the sum of $8,000. All these judgments were regularly taken by default. Upon their entry executions were immediately issued and delivered to the proper sheriff, who levied upon all the tangible personal property of the company, and advertised it to be sold on December 6, 1894. On the 3d of that month the plaintiffs commenced an action against the Cohocton corporation, in which an attachment was issued and delivered to the same officer on the next day. The property thus levied upon was sold for about $5,000, $3,500 of which remains in the hands of the sheriff to abide the result of this action.

The special term dismissed the complaint as to Campbell and Rowe, in effect holding that their judgments were not suffered with an intent to give them preference over the other creditors of the corporation. It, however, set aside the judgments obtained by the banks, upon the ground that they were thus suffered, and consequently invalid. It also directed that out of the fund in the hands of the sheriff the plaintiffs should be paid the amount of their judgment. The plaintiffs appealed to the appellate division from that part of the judgment which dismissed the complaint as to Campbell and Rowe, and the latter appealed from so much of the judgment as directed payment of the plaintiffs' judgment out of the moneys in the sheriff's hands. The banks appealed from the entire judgment, but before argument abandoned their appeal. The appellate division dismissed the appeal of the banks, reversed the judgment of the trial court in favor of Campbell and Rowe without awarding a new trial, and affirmed the remainder of the judgment. From the judgment entered upon that decision Campbell and Rowe have appealed to this court. Thus the question presented here is the correctness of the decision in reversing the judgment of the special term in favor of the appellants, and in affirming the direction of the trial court to pay the plaintiffs' judgment out of the fund in the sheriff's hands.

The appellants now contend (1) that the appellate division erred in affirming that portion of the decision which directed the sheriff to pay the plaintiffs' judgment; (2) that the evidence was insufficient to justify the reversal as to them; and (3) that, even if sufficient, the court had no right to reverse their judgments without awarding a new trial.

It is obvious that the last contention must be sustained, as the appellate division had no authority to hold the appellants' judgments invalid without their having an opportunity to litigate the question of their validity. We have had occasion recently to examine the power of that court to determine facts which are not conclusively established

or found by the trial court, and to direct a judgment thereon. In re Chapman, 162 N. Y. 456, 56 N. E. 994; Benedict v. Arnoux, 154 N. Y. 715, 724, 49 N. E. 326. In those cases we held that upon reversal the court must grant a new trial, and cannot properly render a final judgment unless the facts are conceded or undisputed, or established by official record, or found by the trial court, or it appears that no possible state of proof applicable to the issue could entitle a party to a judgment, and that this rule applies to suits in equity as well as to actions at law. In the Benedict Case it was said: "It is one of the fundamental principles of our law that questions of fact are to be tried and determined in a court of original jurisdiction, and it is not the appropriate function of an appellate court to determine controverted questions of fact, and render final judgment upon such determination." The principle of those cases is decisive of this question, and requires us to hold that the appellate division had no power to reverse the judgment as to the appellants without awarding a new trial.

But the broader and more important inquiry is whether that court was justified in reversing the judgment as to the appellants. If the evidence is insufficient to show that their judgments were suffered by the corporation with intent of giving them a preference over other creditors, then it had no authority to reverse that portion of the judgment which was in the appellants' favor. The statute, so far as it is applicable to this case, may be thus paraphrased: When a corporation is insolvent or its insolvency is imminent, no judgment shall be valid which is suffered by any of its officers, directors, or stockholders with the intent of giving a preference to any particular creditor over other creditors. It is manifest that the purpose of this section was not to prevent the honest creditors of a corporation from enforcing their debts by action. Varnum v. Hart, 119 N. Y. 101, 23 N. E. 183; Throop v. Lithographic Co., 125 N. Y. 530, 534, 26 N. E. 743. In the case last cited Judge Andrews said: "We have recently held in Varnum v. Hart, 119 N. Y. 101, 23 N. E. 183, that the statute does not restrain one whose relation to the corporation is that of a creditor merely from availing himself of legal proceedings for the collection of his debt, and that he is entitled to a preference acquired in ordinary course of legal procedure, notwithstanding the insolvency of the corporation." See French v. Andrews, 145 N. Y. 441, 40 N. E. 214, and Bank v. Townley, 159 N. Y. 490, 54 N. E. 74. Although the statute has been recently amended, yet the rights of creditors in that respect remain the same. Obviously, the sole purpose of this statute was to prevent any improper act or omission on the part of a corporation or its officers which would result in securing to a particular creditor a preference over its other creditors. If