On Appellants’ Motion for Rehearing.
That there may be no room for uncertainty as to our views of appellants’ appeal as a whole, or grounds for equivocation as to the effect and scope of our holding, as announced in the original opinion, we deem it advisable to discuss the major grounds of appellants’ motion for rehearing. It is contended that the court erred in holding that the statement in appellants’ brief, viz. “The only question in this appeal is: Does the receiver show any equity or equities which are of such nature as to overcome this equity of offset in behalf of plaintiffs?” amounted to a waiver of all other assignments of error and propositions therein urged, because the pretermitted proposition presented “other related questions whose determination was and is necessary to a proper decision of the case.” That the holding complained of was justified, it is only *454necessary' to state that the relief sought by appellants was purely equitable; namely, the right to apply to the cancellation of the judgment for $2,813.69 such an amount of the judgment rendered in favor of appellant A. A. Cocke, adjudicating the value of the 43 contracts pledged by said' appellant to the United Home Builders of America, to secure the payment of an indebtedness evidenced by a note for the sum of $16;982.50, and upon which there remained due and unpaid the principal sum of $5,686.07, as should be necessary to affect the judgment for $2,813.69. No other relief was sought; therefore the only question necessary to be determined was whether there existed facts external to the judgments themselves that created rights which made it inequitable for the court to offset judgment against judgment. Therefore all collateral issues or propositions being inherently insufficient to determine the disposition that should be made of this one issue, it certainly was not necessary for this 'court to specifically discuss, even if same had not been waived by the above statement contained in appellants’ brief. However, we will here present our views upon. the only assignments that could in any respect bear upon the merits of appellants’ appeal, viewed from their standpoint. ' :
As' to appellants’ plea of payment, 'appellant A. A." Cocke testified as follows concerning the contracts that had been acquired by him from the United Home Builders of America: •
'' “It is a fact that the 3 per cent, loan home-purchasing contracts, about which I hqve just testified that were adjudicated ⅛ my favor, are the contracts that I have been testifying about; that is, the 43 contracts. Those are the contracts upon which my adjudicated claim rests. It is also a fact that I have had in my possession the receiver’s answer in this case, and I have checked up that answer and I find that it properly contains the number of contracts that I have just examined. I have examined the contract that you have just handed to me, and particularly the reverse side of the contract, and I will say for the purpose of this record that that is my signature upon the reverse side of each one of those contracts. I do not know when I lost possession of those contracts, but I suppose I lost possession of those contracts when I got a temporary loan from the United Home Builders of America. I put them up with the company, to secure the payment of a temporary loan secured from the United Home Builders of America. I have examined the instrument which you hand to me, and I see that the 43 contracts are- listed here, and also quite a large number of other contracts besides. However, the 43 contracts that I have just testified about are listed in this instrument. That (indicating) is my signature, and there is no controversy about that note. I executed that note. It is a fact that sometime during the month, of December, 1922, I presented to! the United Home Builders of America some 3 per cent, loan home-purchasing contracts under section • No. 13; in fact, I instructed the United Home Builders of America in St. Louis to give me the cash surrender value on all the contracts that they held against that note, except the 43 contracts involved in this suit. I cannot say from memory whether the contracts shown in Exhibit A are the contracts that I submitted for adjustment under section 13 of the contract or not, but I would just say to the best of my knowledge and belief that that is correct. I received credit from the United Home Builders of America on • the cash surrender value of those contracts ; that seems to check out all right. The contracts which I have checked under Exhibit A, as I stated awhile ago, were originally put up with the United Home Builders of America for a temporary loan. This note seems to be credited with the sum of $10,-317."
By this testimony, certainly appellants’ claim for credit on the note for $16,982.50, on account of the 43 Home Builders contracts involved in this suit, and pledged to secure the payment of " said note, was destroyed. This conclusion appellants controvert on the ground, that appellant A. A. Cocke' testified as follows: “I want'to further puf in evidence, that the United Home Builders of America failed to allow me- credit in the sum of $7,134.05, to which I was entitled and which had been submitted to a board of arbitration, and that the board of arbitrators found'a balance in my favor. This settlement as you mentioned it was made before a receiver was appointed in this case, and- the amount should have been endorsed as a credit on the temporary loan note mentioned in this case.”
This testimony became ineffectual and was excluded by the court as shown! by the following proceedings. Attorney for ap-pellee moved the court “to strike from the record any testimony with reference to any arbitration agreement, on the ground that, this purported claim was before alleged by the plaintiff Cocke in the consolidated causes and withdrawn and abandoned and in consideration of the abandonment of that claim by the defendant Cocke in the suit where a judgment was obtained seeking foreclosure on the real estate, this court instructed counsel for the receiver to dismiss a certain cross-action, which the record will show here, and • which dismissal was taken.” By the court: “The court will take judicial cognizance of its judgment, and the court has made that entry; that seems to me to have been removed from this case. In other words, when you; (referring to appellant A. A. Cocke) stated that the trustees of the company failed to allow it, you might have introduced that in evidence at that time, but not now; it cannot be intro-*455dueed in evidence at this time; it- is not pleaded.”
The disposition made of the issue in reference to the finding of the board of arbitrators having been made in a prior cause between the same parties to the instant case, and both cases being tried by the same judge, the trial judge properly took judicial.cognizance of the proceedings had and disposition made of this particular issue in said previous cause, and in the absence of any showing of a conflict between the proceedings had and judgment rendered therein, and the statement made by the trial judge as to his judicial knowledge of such proceedings so declared in the course of the trial of this cause is accepted as purporting absolute verity.
We are now brought to consider the proposition, that the debt for which said 43 contracts were pledged to secure payment, being barred by the four-year statute of limitation, the court erred “in accrediting the alleged debt of A. A. Cocke to Home Builders on the so-called ‘temporary loan’ with any standing in the case, and in holding that, because of it the right in equity of appellee to offset against appellee’s judgment against them the aforesaid judgment in favor of A. A. Cocke against Home Builders in the amount of $9,539.55 is defeated.” The 43 Home Builders contracts involved were pledged as security for the payment of a note executed by appellant A. A. Cocke to said Home Builders in the sum of $16,982.50, on which there was a balance due at the time the judgment appealed from was rendered in the sum of $6,596.57, and prior to that date said note had become barred by the four year statute of limitation. Said note and the 43 Home Builders contracts pledged to secure same passed into the hands of appellee on his appointment as receiver of the properties of the United Home Builders of America.
We think the holding in the case of Hudson v. Wilkinson, 61 Tex. 606, sufficient authority to offset this contention, namely:
“The fact that a debt which á pledge is made to secure is barred by the statute of limitations constitutes no defense to an action by the pledgee against another for the wrongful conversion of the property, the pledgee having a special property in the thing pledged, and being entitled to its possession until the debt is paid. The debtor who has pledged property to secure a debt cannot recover its possession, though limitation has run against the debt, until he tenders the amount unpaid on the debt; and if the debtor obtains the possession and sells to one who has notice of the pledgee’s rights, the purchaser takes the property subject to the creditor’s right to its possession until the debt is paid. In such case the purchaser is liable to the creditor for a wrongful conversion of the property to the extent of the amount unpaid on the debt, if that amount be less than the value of the property. If the property be worth less than the debt, then the creditor may recover the value of the property at the time of the conversion, with interest, thereon until the date of judgment.”
Appellants’ motion for rehearing is therefore overruled.