bill in said cause, and that he prepared the above motion for leave to amend said amended bill. Affiant further states that from information derived from his client, José Leandro Perea, who is now deceased, and who was a Mexican, and did not speak the English language, affiant was led to believe that the conveyance made from the said José Manuel Gallegos to the said defendant, Candelaria Montoya de Gallegos, was made with a fraudulent intent of hindering and delaying the creditors of the said José Manuel in collecting their debts, and that under said impression he framed the original and amended bill, and that he did not receive any information of the actual circumstances of the making of the said conveyance by the said José Manuel Gallegos to the said respondent until, upon the taking of the testimony, he was informed of the real facts; and that the said original deed, in place of having been intended as a gift to the said respondent, and made with a view of covering up and defrauding his creditors, was intended as a mortgage to secure respondent from loss occasioned by said respondent joining the said José Manuel in the execution of a mortgage which should cover the separate property of the said respondent; that, since the information came to his knowledge, he prepared the within amended bill, so that the same might conform to the actual facts as proven by the witnesses. Affiant states that said motion is not made for vexation or delay, but that the proposed amendment is material, and could not with reasonable diligence have been sooner introduced into the bill; that the principal witness from whom said afliant obtained said information was one of the solicitors for respondent; and that affiant had no knowledge of what he would swear to, or of the kind of testimony he would give, until the day he was examined, nor did he believe in fact that he would be a witness in the case.

"W. T. THORNTON.

[Signed] "Subscribed and sworn to before me this 13th day of February, 1885. [Signed] "S. B. AXTELL, Judge of First District."

The motion was overruled by the court, at the costs of the complainants. The proposed amended bill is set out in the transcript. It alleges that the conveyance from José M. Gallegos to the respondent, though absolute on its face, was in fact intended as a mortgage for the purpose of securing her and her property from any liability which might accrue to her by reason of the execution of the mortgage to Probst and Kirchner, and praying that the conveyance to the respondent be declared to have been a mortgage made to her in trust to secure her from liability, and further praying substantially as in the former amended bill. The motion to amend was denied, and overruled, at the costs of the complainant.

Afterwards, on the hearing of the cause, the exceptions to the master's report were overruled, and his findings and report confirmed, and the conveyance by José Manuel Gallegos to the respondent was adjudged and decreed by the court not fraudulent or in fraud of creditors, but made in good faith, upon a good and sufficient consideration. It was further decreed by the court that the complainants have nothing by their bill, and that it be dismissed, at their costs.

It appears that the note for $4,000, signed by Probst and Kirchner as sureties, is dated March 16, 1874. The mortgage given them by Gallegos and wife, and the deed by Gallegos to his wife, bear the same date,-all of which indicates with clearness that the giving of the note and mortgage and deed was one transaction, done at the same time. Waldow and Staab both agree that the deed was to be made to enable a mortgage on the whole property to be given, and neither of them say a word about any other consideration or indebtedness being mentioned.

In the case of Connalley v. Peck the court said: "Where the proof does not sustain the allegations of the bill, and where, by the proof, the complain

ant would be entitled to relief in a court of equity, if his pleadings bad been properly framed, an amendment should be allowed or directed to conform the pleadings to the facts which ought to be in issue, in order to enable the court to decree fully on the merits, and, whenever this is not done, it is error." 3 Cal. 75. "Where a matter has not been put in issue with sufficient precision, the court has, upon hearing the cause, given the plaintiff liberty to amend the bill, for the purpose of making the necessary alteration." 1 Daniell, Ch. Pr. 418; Lewis v. Darling, 16 How. 1.

"Each party, by leave of the court, shall have leave to amend,

upon such

terms as the court may think proper, at any time before verdict, judgment, or decree. Comp. Laws N. M. § 1911; Beall v. Territory, 1 N. M. 507; rule 40, p. 40, Dist. Courts, Equity.

The proposed amendment comes within the principle laid down in the cases cited above, and comes within the statute and rules of practice in equity. The decree is reversed, and the cause remanded, with instructions to the district court to reopen the case, and allow the complainants' amendment on such terms, as to the payment of the costs, as the court may impose, and for further proceedings in the cause.

LONG, C. J., and BRINKER and HENDERSON, JJ., concur.

(5 N. M. 123)

SOUTHERN PAC. RY. Co. v. ESQUIBEL.

(Supreme Court of New Mexico. January, 1889.)

1. RAILROAD COMPANIES-CONSOLIDATION-TRANSFER OF LAND GRANT AND FRANCHISE. Act Cong. March 3, 1871, incorporating the T. & P. R. Co., and granting lands in aid of the construction of its road, authorized it, by section 4, to purchase the land grant and franchise of, and to consolidate with, any railroad company along its route. Section 5 authorized it to make traffic arrangements with other companies. Section 6 provided that the rights, franchises, and property of every description, belonging to the consolidated or purchased companies, should vest in and become the property of the T. & P. Co. Held, that said company had no authority to transfer its own land grant and franchises to another company, and retain merely an easement over the right of way.

2. SAME-POWER TO SELL ROAD.

The power given by the act to mortgage the lands, etc., for means to construct and operate the road, does not include the power to sell and assign them.

3. SAME-FORFEITURE OF LAND GRANT-POWER OF CONGRESS.

The fact that congress had reserved a right to adopt such measures as it might deem necessary to secure the completion of the road upon failure of the company to complete it, does not prevent congress from declaring a forfeiture of the land grant for such failure.

Appeal from district court; HENDERSON, Judge.

Catron, Thornton & Clancy, for appellant. Rynerson & Waldow, for appellee.

REEVES, J. Upon the trial of the above-entitled cause it was stipulated by the parties that the facts relating thereto were as follows:

First. The Southern Pacific Railway Company of New Mexico is a corporation organized under the laws of the territory of New Mexico in the year 1880.

Second. The Texas & Pacific Railroad Company is a corporation organized under an act of congress entitled "An act to incorporate the Texas & Pacific Railroad Company, and to aid in the construction of its road, and for other purposes," approved March 3, 1871, and an act of congress entitled "An act supplementary to an act entitled An act to incorporate the Texas & Pacific Railroad Company, and to aid in the construction of its road, and for other

purposes.'" approved March 3, 1871,-this last-mentioned act having been approved May 2, 1872,-which said two acts are hereby made a part of the stipulation, copies thereof being attached hereto, marked "Exhibits."

Third. The Texas & Pacific Railroad Company accepted said charter of incorporation, and within the time therein provided was organized thereunder. Fourth. Within two years after the passage of said act of March 3, 1871, and in accordance with said two acts, the said Texas & Pacific Railroad Company did designate the general route of the said road as near as might be, and did file a map of the same in the department of the interior at Washington, which said general route so designated corresponded with the line of road constructed as hereinafter stated by the Southern Pacific Railway Company of New Mexico.

Fifth. Immediately after the filing of said map the secretary of the interior caused the lands within 40 miles on each side of said designated route within the territories of New Mexico and Arizona, and 20 miles within the state of California, to be withdrawn from pre-emption, private entry, and sale. Sixth. That thereafter the said Texas & Pacific Railroad Company did commence the construction of its road at the eastern terminus thereof, at or near Marshall, in the state of Texas, as described in said act, and did prosecute the same, and have the same completed at or near El Paso, designated as a point on said road by said acts of congress, on or before the 2d day of May, 1882.

Seventh. That the Southern Pacific Railway Company of New Mexico, in the years 1880 and 1881, after the organization, constructed a railroad of the character, kind, and description required by said two acts of congress, from the western boundary line of the territory of New Mexico, through the territory of New Mexico, on the said line of the general route of said Texas & Pacific Railroad Company, as designated in and by the said map filed in the department of the interior as aforesaid, to the state line of Texas, on the Rio Grande river, near El Paso, Tex., and connected the same with the said Texas & Pacific Railroad, constructed as aforesaid, at or near El Paso, as aforesaid.

Eighth. After the completion of the Southern Pacific Railway to El Paso, the Texas & Pacific Railroad Company claimed and insisted that the same was built upon its right of way under said acts of incorporation, and that the said road thereby became the property of said Texas & Pacific Railroad Company, and thereupon in May, 1881, commenced a suit in the Third judicial district court of the territory of New Mexico against the Southern Pacific Railway Company of New Mexico, to have said road so constructed by the said Southern Pacific Railway Company of New Mexico decreed to be the property of said Texas & Pacific Railroad Company; a copy of the bill of complaint in said cause being hereto attached and made a part of this agreement, as also is a copy of the order made by Hon. WARREN BRISTOL, as judge of said district court, on the filing of said bill of complaint.

Ninth. That during the pendency of said suit the said Texas & Pacific Railroad Company definitely fixed the line of its proposed road, under said acts of congress, across the territory of New Mexico, at the center of the road-bed of the said road constructed as aforesaid by the Southern Pacific Railway Company of New Mexico, in the manner so required by law.

Tenth. Owing to doubts and uncertainties as to the result of said legislation, and for reasons therein stated, an agreement to compromise the same was entered into by and between the said Texas & Pacific Railroad Company and the Southern Pacific Railway Company of New Mexico, a copy of which said agreement is filed herewith, and made a part of this stipulation, as evidence in this cause, and that in accordance with said agreement a decree was entered in said cause, a copy of which is filed herewith, and made a part of this stipulation, as evidence in this cause, and also two deeds of conveyance were made

and executed by the said Texas & Pacific Railroad Company to the said Southern Pacific Railway Company of New Mexico, by one of which was conveyed all the right, title, interest, claim, and demand of said Texas & Pacific Railroad Company in and to the right of way, 200 feet wide, from the Arizona line across New Mexico, at or near El Paso, on the line of the road of the Southern Pacific Railway Company of New Mexico, a copy of which said deed is hereto attached, and made a part of the stipulation, as evidence in said cause, the other deed of conveyance being an assignment and conveyance to the Southern Pacific Railway Company of New Mexico by the Texas & Pacific Railroad Company of the right of way to take materials from the public lands; also grounds for station buildings, workshops, wharves, switches, side tracks, and depot grounds; also the right of franchise of the Texas & Pacific Railroad Company to lay out, locate, construct, finish, maintain, and enjoy a continuous railroad and telegraph line, with appurtenances, from a point on the Rio Grande near El Paso, westward, on the most direct and eligible route near the thirty-second parallel of north latitude, granted to said Texas & Pacific Railroad Company by said acts of congress; and also all the lands granted to said Texas & Pacific Railroad Company by the ninth section of said act of congress approved March 3, 1871, to aid in the construction of the railroad and telegraph line described in the first section of said act; a copy of which said conveyance is attached hereto, and made a part of this stipulation, as evidence in this cause.

Eleventh. That the said railroad to be constructed under and in accordance with the said two acts of March 3, 1871, and May 2, 1872, has not been completed in that portion of the state of California between the Colorado river and San Diego.

Twelfth. That the said defendant, since the said Texas & Pacific Railroad Company designated its general route and filed a map thereof as aforesaid, and after it had definitely fixed the line of said road across the territory of New Mexico, and after the making of said agreement with the Southern Pacific Railway Company of New Mexico, and entering the said decree, and making, executing, and delivering the said two deeds of conveyance, the said defendant entered upon the land in question, which is a part of one of the odd sections within 40 miles of the line of said road as fixed and designated by the Texas & Pacific Railroad Company as aforesaid, said land in question being situated in the county of Dona Ana, and said defendant occupied and, held possession of same, at the time of the commencement of this suit, adverse to plaintiff.

Thirteenth. That on February 28, 1885, an act of congress in the following words was passed and approved:

"That all lands granted to the Texas Pacific Railroad Company under the act of congress entitled 'An act to incorporate the Texas Pacific Railroad Company, and to aid in the construction of its road, and for other purposes,' approved March 3, 1871, and acts amendatory thereof or supplemental thereto, be, and they are hereby, declared forfeited, and the whole of 'said lands restored to the public domain, and made subject to the disposal under the general laws of the United States as though said grant had never been made: provided, that the price of the lands so forfeited and restored shall be the same as heretofore fixed for the even sections within said grant.

"Sec. 2. That the act of March 3d, 1875, entitled 'An act for the relief of settlers within railroad limits,' is hereby repealed." Approved February 28, 1885.

Fourteenth. That said defendant, on the 27th day of March, A. D. 1885, filed his homestead entry on the land in question with the register of the United States land-office at Las Cruces, N. M., paid the lawful fees for the same, and received the usual certificate therefor.

After the evidence was closed the plaintiff moved the court to instruct the

jury that under the evidence they should find the defendant guilty, but the court refused the instruction, and to this decision and ruling of the court the plaintiff excepted. Whereupon the court, upon the motion of the defendant, instructed the jury as follows, to-wit: "The court instructs the jury, under the facts stipulated and read in evidence in the case, the plaintiff has not made out such a case as entitles it to recover a verdict against the defendant. The jury will therefore find the defendant not guilty;" to which the plaintiff excepted. Whereupon the jury returned a verdict as follows, to-wit: "We, the jury in the above-entitled cause, do find the defendant not guilty." And thereupon the plaintiff, by its counsel, moved the court for a new trial, for the reason that the verdict was against the law and the evidence in the cause, which the court overruled, and dismissed the suit at the plaintiff's costs; and thereupon the plaintiff excepted, and moves the court to grant it an appeal from the judgment to the supreme court of the territory, which motion was granted, and the plaintiff brings the case into the supreme court by appeal, and assigns for error: (1) The court erred in directing the jury to find the defendant not guilty; (2) the court erred in refusing to give the instructions prayed for by plaintiff to find the defendant guilty; (3) said judgment was rendered in favor of defendant, when it should have been rendered in favor of the plaintiff.

It is contended for the appellant that the grant of the land in question to the Texas & Pacific Railroad Company was a grant in præsenti, and had the effect to convey the land to said railroad company; referring to the ninth section of the act of March 3, 1871. This section provides "that, for the purpose of aiding in the construction of the railroad and telegraph line herein provided for, there is hereby granted to the said Texas Pacific Railroad Company, its successors and assigns, every alternate section of public land, not mineral, designated by odd numbers, to the amount of twenty alternate sections per mile, on each side of said railroad line, as such line inay be adopted by said company, through the territories of the United States, and ten alternate sections of land per mile on each side of said railroad in California, where the same shall not have been sold, reserved, or otherwise disposed of by the United States, and to which a pre-emption or homestead claim may not have attached at the time the line of said road is definitely fixed. ***" The sections designated as granted were incapable of identification until the line of the road should be "definitely fixed.” When the route is established the grant takes effect upon the sections by relation as of the date of the act of congress. In that sense the grant is one in prasenti. * * *" Van Wyck v. Knevals, 106 U. S. 365, 366, 1 Sup. Ct. Rep. 336.

66

The act intended that the location of the road should be as followed by its construction. Railroad Co. v. Railway Co., 97 U. S. 498, and section 13 of the act of congress. This section provided that the president of the company should annually make a report, and file it with the secretary of the interior, which report should be under oath, exhibiting, among other things, the number of miles of road constructed each year, and a description of the lines of road surveyed and fixed upon for construction. Section 12 provided that whenever the company should complete the first and each succeeding section of 20 consecutive miles of railroad, and put it in running order as a firstclass road in all its appointments, it should be the duty of the secretary of the interior to cause patents to be issued conveying to the company the number of sections of land opposite to and coterminous with the completed road to which the company should be entitled for each section so completed. Section 18: That the president of the United States, upon the completion of the first section of 20 miles, should appoint one commissioner, whose duty it should be to examine the various sections of 20 miles as they should be completed, and report thereon to him in writing; and if, from said report, he was satisfied that the company had fully completed each section of its road, as in the