the court was called to the agreement or not; that, on account of the agreement, he did not introduce Daniel McCray's chain of title to said 134-acre tract of land, which he had with him at the trial." An attorney representing John D. Freeman in that cause corroborated that statement, and testified "that before the argument began in said cause the attorneys for both parties agreed in open court that the only question at issue was as to whether the George Allen 198-acre survey was included within the boundaries of the Joseph Washington one-third league survey; that he remembers that there was no land in controversy in said suit, except said 198 acres; and that the whole controversy was in regard to same." To verify his statement he referred to his brief filed in that cause, in which he said the following statement was made: "It was admitted that defendant in error [John D. Freeman] was the owner of the said Washington survey, and that the plaintiffs in error were the owners of the title to the George Allen survey, and the question at issue was whether the said Allen was included in the boundaries of the said Washington survey." McCray was permitted to state that he was present at the trial of the former action, and that "the title to the 134%-acre tract was not involved in said suit, and his title papers to the same were not read in evidence." This cause was tried by a jury, and in reference to the former judgment the court instructed them as follows: "Second question for you to answer is whether or not, in the case decided in 1883, of J. D. Freeman v. McCray & McAninch (No. 1,311), the title to the 134% acres now claimed by McCray out of the Joseph Washington survey was involved as an issue; or was or was not the boundaries between the Washington and Allen surveys the only issue decided in said cause?" The jury found that the only issue in the former action "was the boundary line between the Allen and Washington surveys." The court refused to instruct that "the effect of the petition of the plaintiff, John D. Freeman, in the said original suit, and the said answer of the defendants therein, was to put in issue in said suit the title and right of possession to all the land described in the petition of plaintiffs in said original suit."

Where it appears from the record of a court having jurisdiction over the parties and subject-matter that an issue has been presented and decided, then the decision so made, so long as it is not set aside in some lawful manner, must be held conclusive upon the rights of the parties, when the same issue is again presented; and in such cases extrinsic evidence cannot be received to contradict the record, by showing that an issue necessarily involved in the cause was not presented and decided. If the record leaves that matter uncertain, then extrinsic evidence may be resorted to for the purpose of showing what was actually decided. That

the court in which the former action was tried had jurisdiction over the parties to. and subject-matter involved in, that controversy, cannot be questioned. What was the issue involved in that cause, as shown by the record? An issue is the question in dispute between parties to an action, and, in the courts of this state, that is required to be presented by proper pleadings. The record of the former action-shows that plaintiff, in his pleadings, alleged that he was the owner of a tract of land therein particularly described; that defendants, without right, had taken possession of that; and that he was entitled to have it restored to him. It is conceded that the tract of 134% acres now in controversy is a part of the land so claimed. It shows that the defendants denied plaintiff's ownership, and controverted his right to possession, and, to intensify this denial, asserted right in themselves, and stated the manner in which it was claimed that this accrued. Thus were the issues presented, and the leading issue was one of title; and the fact that the determination of that may have depended on a question of boundary could not change the character of the vital issue in the case, for that was but a question of fact, to be considered like any other fact in determining whether the issue of title to the land should be decided in favor of the one party or the other. What the issues made by the pleadings were is not left uncertain by the record. The record of the former action shows that the court instructed the jury that the controversy between the parties was one of title to the land described in plaintiff's pleadings; that he had shown title to the Washington survey, and defendants had shown title to the Allen survey, after which they were instructed to determine whether the land described in plaintiff's peti tion was a part of the Washington survey, and in the event they so found they were instructed to find for the plaintiff. The court decided the question of title to the respective surveys, and only submitted to the jury the question of boundary, on which title to the land then in controversy depended, but this did not eliminate the question of title to the land sued for. Questions of boundary are never the subjects of litigation within themselves, but become so only when some right or title is thought to depend on their determination; and the fact that the court submitted only that question to the jury does not leave uncertain the issue actually tried and determined in the former action, even if the charge be considered without reference to other parts of the record. The judgment was: "It is therefore considered by the court that the plaintiff, John D. Freeman, recover of the defendants, J. F. McAninch and Daniel McCray, the premises described and bounded as follows." It describes the land as described in the petition, and then declares that for this "he may have his writ of possession, and his costs in this behalf expended, for

which he may have his execution." In petition for writ of error, defendants alleged that plaintiff had "recovered of and from the said defendants the certain tract of land sued for." That judgment, in the light of the entire record, was an unequivocal judicial determination that the title to the land described in it was in the plaintiff, and that he was entitled to its possession, and the evidence offered to prove that such was not the issue presented and determined ought to have been excluded. There is no decision in this state, nor elsewhere, so far as is known, which sanctions the admission of such testimony, in the face of such a record.

The case of Foster v. Wells, 4 Tex. 104, was one in which the judgment of the justice of the peace came in question; and, his record not showing what was adjudicated, it was held that this might be shown by extrinsic evidence. But in that case the general proposition was announced: "That the judgment or decree of a court possessing competent jurisdiction shall be final as to the matters determined, cannot be controverted. The principle, however, extends further. It is not only final as to the matters actually determined, but as to every other matter which the parties might litigate in the cause, and which they might have had decided. Le Guen v. Gouverneur, 1 Johns. Cas. 436; Fischli v. Fischli, 1 Blackf. 360. But it is only when the trial was on the merits, when all the matters between the parties were or could have been adjudicated, that the judgment is a bar to another trial." This, with its well-recognized limitations, has been recognized as the law in this state from the earliest times. After asserting the same rule, in another case, it was said: “Such being the effect of the former judgment,

no evidence could have been received to impeach the judgment when the record of it was offered. It might have been competent to receive evidence to support its identity. But if the record did not show, when compared with the matters put in controversy in the suit in which it was offered, that it embraced the same subject-matter, it could have offered no bar on the plea of nul tiel record." Weatherd v. Mays, 4 Tex. 390. In the same case it is aptly said: "Our system is happily well adapted to show conclusively by the record whether it was sought to litigate a matter that had already been adjudicated. The cause of action is required fully to be set out in the petition, and the defense in the answer, that there would be no uncertainty as to the matter litigated in the adjudged case, or whether it was decided on its merits, and as little as to what was sought to be litigated in the suit pending." "The plaintiff's title was put directly in issue by the defendant's answer in the former suit. It was the material and traversable matter in issue between these parties in that suit, and the judgment upon it is conclusive of that question in this suit. 1 Greenl. Ev. 528 et

seq. It is not the less so because the defendant failed to produce any evidence of title on his part; otherwise, a party might avoid being concluded by the judgment, in any case, by withholding his evidence. The record of the judgment conclusively estab lishes that the title was in issue, and it was not competent for the defendant to impeach and contradict it by the production of parol evidence." Fisk v. Miller, 20 Tex. 582; Roberts v. Johnson, 48 Tex. 137; Graves v. White, 13 Tex. 123; Oldham v. McIver, 49 Tex. 572; Nichols v. Dibrell, 61 Tex. 541; Flippen v. Dixon, 83 Tex. 421, 18 S. W. 803; Lee v. Kingsbury, 13 Tex. 70; Tadlock v. Eccles, 20 Tex 792; McGrady v. Monks, 1 Tex. Civ. App. 613, 20 S. W. 959; Armstrong v. City of St. Louis, 69 Mo. 310; Long v. Webb, 24 Minn. 383; Bailey v. Williams, 6 Or. 71; Sturdevant v. Randall, 53 Me. 153; Butler v. Glass Co., 126 Mass. 516; Campbell v. Butts, 3 N. Y. 174; Jones v. Perkins, 54 Me. 396; Freem. Judgm. 275, 300; Black, Judgm. 625; Van Fleet, Coll. Attack, 526; Whart. Ev. 785; Duchess of Kingston's Case, 2 Smith, Lead. Cas. (8th Am. Ed.) 915 et seq. The cases of Cook v. Burnley, 45 Tex. 115; Horton v. Hamilton, 20 Tex. 611; and Pishaway v. Runnels, 71 Tex. 352, 9 S. W. 260,-do not hold to the contrary. In Russell v. Place, 94 U. S. 608, the same rule is recognized; but in that case it did not appear from the record on what issue the cause was tried, and it was held that "to apply the judgment and to give effect to the adjudication actually made, when the record leaves the matter in doubt, such evidence is admissible." That suit was brought for infringement of a patent in certain respects, and in bar of that action a former judgment on a similar charge was pleaded; but it did not appear from the record in the former case whether the infringement, on account of which a recovery was had, was the same as that on which the pending suit was based. The case of Hickerson v. City of Mexico, 58 Mo. 61, seems to have presented a similar question; but there is no intimation in the opinion that parol evidence could be received to contradict the record, and the same may be said of the opinion in Cunningham v. Foster, 49 Me. 68.

To hold that an issue as to boundary alone was tried, and that no issue of title was presented and determined, would be to deny to the record its only legitimate construction; to attribute to the parties the intention to have an issue of fact decided, from which no benefit whatever could result to either party; and, worse still, to assume that the court did, and intended to, enter a judgment which could have no effect,-for if the issue of title to the property was not determined, or intended to be, it was wholly unimportant where the boundary between the surveys The issue presented by the pleadings, and determined by the judgment, was one of title; and that under the agreement of the parties, or determination by the court, of

was.

the effect of written muniments of title offered by the respective parties, this depended on the fact of true locality of the boundary between the surveys, could not change the character of that issue. The effect of the agreement proved was that the right of the plaintiff to recover should depend on the question whether the land described in his petition was a part of the Washington survey; but this did not change the issue made by the pleadings, nor divest the judgment of its effect as a determination of title, any more than would it had the parties agreed that judgment should be entered for the plaintiff if some muniment of title offered by him was found to be genuine, and that it should be for defendants if that was found to be a forgery. It is not claimed that any agreement was made that judgment should not be entered for plaintiff for the 134% acres now claimed by McCray if the land described in the petition was found to be a part of the Washington survey, but that in that event he should have judgment for all the land but that now claimed by McCray. Under such an agreement, another and very different question might arise. Pending the former action, McCray may have acquired title to so much of the Washington survey as he now claims; but, if so, it was his right to assert that when the cause was tried, and his failure to do so does not now entitle him to the relief he might then, by diligence and care, have secured. "A party cannot relitigate matters which he might have interposed, but failed to do, in a prior action between the same parties, or their privies, in reference to the same subject-matter." And if one of the parties failed to introduce matters for the consideration of the court that he might have done, he will be presumed to have waived his right to do so. Hackworth v. Zollars, 30 Iowa, 433; Hites v. Irvine, 13 Ohio St. 283; Le Guen v. Gouverneur, 1 Johns. Cas. 436; Gray v. Dougherty, 25 Cal. 266. If a party fails to plea-1 a fact he might have pleaded, or makes a mistake in the progress of an action, or fails to prove a fact he might have proved, the law can afford him no relief. When a party passes by his opportunity, the law will not aid him. In Ewing v. McNarry, 20 Ohio St. 322, the judge says:

"By refusing to relieve parties against the consequence of their own neglect, it seeks to make them vigilant and careful. On any other principle, there would be no end to an action, and there would be an end to all vigilance and care in its preparation and trial." The same principle is well settled in numerous authorities. See Embury v. Conner, 3 N. Y. 511; Pierce v. Kneeland, 9 Wis. 23; Birckhead v. Brown, 5 Sanf. 135; Bridge Co. v. Sargent, 27 Ohio St. 237. This is necessarily the law in all cases in which failure to use proper diligence is not caused by accident, excusable mistake, or fraud of the adverse party. Bassett v. Railroad Co., 150 Mass. 180, 22 N. E. 890. The

judgment of the court of civil appeals and the judgment of the district court will be reversed, and the cause remanded for further trial.

LYONS-THOMAS HARDWARE CO. et al. v. PERRY STOVE MANUF'G CO. et al. (Supreme Court of Texas. June 7, 1894.) INSOLVENT CORPORATION-PREFERENCE OF CREDITORS SUIT TO SET ASIDE- ORDER IN VACATION-VALIDITY-RECEIVER'S LIABILITIES.

1. An insolvent corporation, which has ceased to do business, or which, by conveying all its property, has incapacitated itself for continuing its business, cannot prefer its creditors.

2. Though the officers of a corporation testified that it was not insolvent, yet, when it appeared that it was largely indebted, and had conveyed all of its assets to a trustee for the benefit of preferred creditors, a conclusion that it was insolvent is justified.

3. Where an amended complaint, in a suit by simple contract creditors of an insolvent corporation to set aside its deed of trust for the benefit of preferred creditors, states that plaintiffs have recovered judgments against the corporation during the pendency of the suit, they may maintain the suit, if they could not have done so originally.

4. In such an action it is proper to join actions against the preferred creditors to compel them to pay into court money which has been paid to them by the trustee.

5. In an action by the creditors of an insolvent corporation against a trustee under a trust deed for the benefit of preferred creditors, who has power to sue in respect to the assets, to set aside the trust deed, the beneficiaries thereunder are not necessary parties.

6. In an action against a preferred creditor to compel him to pay into court money wrongfully paid him by the trustee for the benefit of creditors, a complaint alleging that plaintiffs are not informed of the facts of the payment, nor of the amount, is sufficient to admit evidence of such payment, as the facts and amount are particularly within the knowledge of the creditor.

7. Where, in an action by creditors of an insolvent corporation to set aside a trust deed for the benefit of creditors, money has been paid by the trustee to a creditor, who has intervened, under a void order of the court, the court may order the creditor to return into court such money, the case not having been fully adjudicated.

8. In an action by creditors of an insolvent corporation for the appointment of a receiver, and also to set aside a trust deed for the bene fit of preferred creditors, the court cannot, during vacation, adjudge the deed valid, and, after appointing a receiver, order him to sell the goods and pay the proceeds to the preferred creditors; and the receiver is liable for the amounts so paid out.

9. Where, in an action by creditors of an insolvent corporation to have a receiver appointed, and also to set aside a trust deed for the benefit of preferred creditors, the judge, in vacation, though refusing to appoint a receiver, orders the trustee to hold the assets, and requires him to file a bond and inventory and report to the court, the trustee will be considered a receiver, as the judge having only the power to appoint a receiver in vacation, the substance of the appointment will be considered.

10. Where a creditor who had begun a suit against the trustee named in a corporate deed for the benefit of creditors, to recover part of the assets of the insolvent corporation, joins in an action to set aside the deed and for the ap

pointment of a receiver, the court may permit him to withdraw and prosecute his original suit, as it can in the distribution of the assets protect the trustee from such suit.

Error from court of civil appeals of fifth supreme judicial district.

Action by the Perry Stove Manufacturing Company and others against the LyonsThomas Hardware Company and others. From a judgment of the court of civil appeals reforming and affirming the judgment of the district court, defendants bring error. Affirmed.

The opinion of the court of civil appeals (RAINEY, J.) was as follows:

"This suit was originally brought November 20, 1889, by appellees, Perry Stove Manufacturing Company and six other simple contract creditors of the Lyons-Thomas Hardware Company, in what they termed a 'creditors' bill,' setting up that the said hardware company was an insolvent private corporation, and had on November 9, 1889, executed to L. P. Harrison, trustee, three mortgages to secure certain debts, covering all of its property and giving preferences; that the Baker Wire Company had sequestered a part of the assets, making the hardware company, the trustee, and the Baker Wire Company parties; and praying for an injunction; that a receiver be appointed; that the mortgages be set aside, and the fund distributed as a trust fund among the creditors without preferences. A temporary injunction was granted by the district judge at chambers November 20, 1889, and notices ordered to be issued for all of said parties to appear before him on November 29, 1889, to answer said petition, and show cause, if any they have, why a receiver should not be appointed as prayed for. Upon the hearing. November 29, 1889, all the defendants answered under oath, and the creditors secured under the first mortgage made themselves parties, and, with the trustee, set up the mortgages, and prayed that he be allowed to administer the trusts and to execute the same under the direction of the court, and the case was fully heard before the court upon questions growing out of the application for injunction and receiver, and the court rendered its judgment, dissolving the injunction, declaring the mortgages to be valid and the security good, refusing the plaintiffs' application for a receiver, and granting the application of the defendants and interveners that the trustee, L. P. Harrison, be allowed to administer the trusts under the order and direction of the court in the nature of a receiver, ordering that he execute bond in the sum of $85,000, conditioned that he would faithfully execute the trusts, and pay over to the secured creditors the money as in the mortgages directed, appointing appraisers to inventory and appraise all of the said property, and directing that the trustee make his report at the next regular term of the district court, and direct

ing the clerk to enroll the decree upon the minutes of the court, which order was duly excepted to at the time. This decree was duly signed by the judge, and enrolled by the clerk, and at the following term the minutes of the court were signed by the judge. The trustee gave bond for $85,000, as required. The inventory was duly filed and approved, and the trustee administered the trusts, under the directions and orders of the court, made in vacation, sold the property, and paid the proceeds upon the mortgage debts as ordered, and at the following term filed his accounts showing how he had executed the same, and asked to be discharged. The plaintiffs took no further action in the case, and made no effort to have the decree of the court set aside, but acquiesced therein, until all of the property had been sold, and the proceeds applied to the payment of the secured debts, under the order of the court, when on August 7, 1890, the plaintiffs and a number of other creditors filed a first amended original petition, setting up that Shoveling, Daily & Gales and eighteen other creditors of the LyonsThomas Hardware Company had obtained judgment against it; that the mortgages were invalid, and the trustee had refused to pay any except the secured debts; that the members of the hardware company owed large amounts of unpaid stock; that the court had rendered its decree, and directed that the trust be executed by the trustee, L. P. Harrison, under the direction of the court, and that he give bond for $85,000, which he did give; that he had wasted the funds; and praying judgment against him on the bond; that the funds be divided, etc. On March 30, 1891, the plaintiffs filed a second amended original petition, in which they seek judgment setting aside the mortgages, and against the trustee for conversion, waste, and devastavit, and also against the stockholders of the corporation for unpaid stock, and ask judgment against the two banks and L. P. Harrison. The answers and pleas of intervention set up the mortgages and their validity, and the execution thereof by the trustee under the orders of the court. The case was tried before the court, and on April 9, 1891, the court overruled the demurrers and exceptions of the defendants and interveners to plaintiffs' petition, and sustained the plaintiffs' demurrer and exceptions to the answers of defendants and pleas of intervention by interveners, to which they excepted, and rendered judgment in favor of the plaintiffs against the proceeds of the sale of the property, less his costs, expenses, and commission for selling; also, a judgment in favor of plaintiffs against the Farmers' & Merchants' Bank for $48,193.70, the amount of said money paid to it by said trustee on its debt; also, a judgment against the Paris Exchange Bank for $7,508.10, the amount of said money paid to it by said trustee on its debt, decreeing that the mortgages were

void; that the fund be paid into court, dismissing the Baker Wire Company from the case, etc. Defendants and interveners, in open court, excepted, and gave notice of appeal, filed their statement of facts, appeal bonds, and assignments of error, and bring the case up by appeal.

"The first and fourteenth assignments of error are treated together by appellants. Under these assignments two propositions are made, as follows: (1) A private business corporation, when not restrained by statute, has the same power to execute a mortgage as an individual, and, if insolvent, may in good faith execute a valid mortgage with preferences. (2) A private corporation in this state is authorized by statute to execute a mortgage, and, there being no exception in the statute, the courts cannot legally ingraft one; but corporations have the same rights as individuals to execute mortgages preferring creditors. When this case was pending in the court of civil appeals of the second supreme judicial district, that court certified to the supreme court for answer the following question: 'Whether or not a preferential deed of trust executed a private trading corporation (chartered in July, 1884, under General Laws), after it has become insolvent, and consequently ceased to carry on its business, without any intention of resuming the enterprise, is void as against the unsecured creditors of such corporation.' This question was based upon the findings of the court below, which are fully sustained by the evidence adduced on the trial. The supreme court, in an elaborate and exhaustive opinion, rendered by Mr. Stayton, C. J. (24 S. W. 16), in answer to said question, after discussing the powers of a corporation under the different provisions of our statutes, and after reviewing at length the numerous decisions on the subject, both of England and America, closes its opinion as follows: "The condition of the corporation set forth in the question propounded, under the long-recognized rules of equity, conferred upon every unsecured creditor of the corporation a right to a ratable share of the proceeds of all the assets of the corporation not subject to priorities lawfully existing when this condition arose, and we therefore answer that neither the stockholders nor directors of the insolvent corporation had lawful power, under the facts stated, to make a preferential deed of trust, whereby any creditor, whether a stockholder, director, or other officer of the corporation or not, could acquire a preference, and that the attempted preference would be invalid as to other creditors of the corporation.' This settles the propositions raised by said assignments against the appellants, and we must hold that said assignments are not well taken. This ruling applies to the fifth assignment of error, which raises practically the same issue.

"2. The second assignment of error raises the proposition that plaintiff's below were

not entitled to maintain this action, because it was not alleged that they had valid liens; nor had their claims been reduced to judgment, and they had failed to collect the same under execution. We will not here discuss what the status of claims of creditors must be before they can ordinarily bring a suit in the nature of a creditors' bill, as it is not necessary under the attitude of this case. This action was brought to have the trust deed declared void, and to subject the property of an insolvent corporation to the payment of the claims of all the creditors of the concern. The corporation being insolvent, the property it owned was held in trust by the directors for the benefit of all creditors who under the law had an equitable lien upon the property of the corporation; and when the directors attempted to appropriate that property to the payment of some creditors, to the exclusion of others, those others had the right to bring an action for their relief in the manner here done. The allegations of the petition show all the plaintiffs to be creditors of appellant company, and it was unnecessary to allege that their claims had been reduced to judgment, or that they were secured by specific liens, as their rights were not affected by the status of their claims.

"3. Appellants complain of the court for overruling their special demurrer, which embodied the following proposition: 'Where numerous creditors join in a bill seeking to litigate in one suit equitable rights to assets, to recover against alleged members of a corporation the value of unpaid stock, for capital stock wrongfully transferred or misapplied, damages against the trustee for alleged waste, devastation, and misapplication of property or money which came into his hands as trustee, such suit is a misjoinder of causes of action, and cannot be maintained.' This was an equitable action brought by the creditors of appellant hardware company, seeking to reach the property of said company in the hands of one to whom it had been transferred by its officers, and to have such transfer declared void and of no force as against all the creditors of said company. In the bill there was an allegation that the members of said company were due something on unpaid stock, and especially alleged that defendant Harrison was so indebted, and judgment was asked against him for same. The amount due by any of them was not alleged. The case was tried by the court, without a jury, and the issue raised by such allegations seems to have been ignored by the counsel and the court. The record does not show that any evidence was introduced on this issue, nor is there any finding of the court thereon. As we gather it from the record, the only issues that were tried by the court were the validity of the deeds of trust made by the officers of said company, and the liability of Harrison for the funds paid the preferred creditors, and their lia