Chakales v. Djiovanides

• Citation: 161 Va. 48
• Case Date: September 21, 1933
• Court: Supreme Court of Virginia

Page 48

161 Va. 48 STAVROLA CHAKALES AND GEORGE CHAKALES
v.
CONSTANTINE J. DJIOVANIDES, SOMETIMES CALLED COSTT JOHN, AND JOHN P. GOODMAN, TRUSTEE. Supreme Court of Virginia, Staunton. September 21, 1933.

Present, Campbell, C.J., and Epes, Hudgins, Gregory and Browning, JJ.

1. USURY — Default in Payment of Usurious Interest Notes Secured by Deed of Trust — Foreclosure of Deed of Trust — Case at Bar. — In the instant case the lower court was of the opinion that there had been a default in the payment of certain interest notes secured by a deed of trust, and ordered and directed that the trustee make sale of the property conveyed in the deed of trust. It was assigned as error that the court adjudged that there had been a default in the payment of interest on the debt secured by the deed of trust, because the evidence established that the transaction was an usurious loan made by complainant to defendants.

Held: That if the loan was usurious, complainant could only recover from the defendants the principal sum loaned when it became due, and their failure to pay the interest notes according to their tenor did not constitute a default for which complainant might foreclose the deed of trust.

2. USURY — Necessity of Agreement by Borrower to Pay More Than the Legal Rate of Interest — Retention by Lender without Assent of Borrower of Part of the Proceeds of the Loan. — Under section 5552 of the Code of 1930, where there has been no agreement by the borrower, expressed or implied, to pay more than the legal rate of interest for a loan of money, the subsequent withholding or attempting to withhold by the lender, without the assent of the borrower, of a part of the proceeds of the loan (whether as a bonus, or as brokerage, or under some other pretext) does not contstitute usury, or the payment by the borrower of an excess beyond the lawful rate of interest for the loan or forbearance of money. It is merely a wrongful detention of money for which the borrower has a right of action.

3. USURY — Necessity of Agreement by Borrower to Pay More Than the Legal Rate of Interest — Retention by Lender without Assent of Borrower of Part of the Proceeds of the Loan. — If, after a loan untainted by usury has been made and while the proceeds are still in the hands of the lender to be expended by him for the account of the borrower, the lender without the assent of the borrower retains a part of it under such circumstances that it amounts to his taking more than the legal rate of interest for the loan, this does not constitute usury, or the payment by the borrower of an excess beyond lawful interest. It is merely the unlawful withholding of money; and the sum so withheld may be recovered from the lender, even though the action to recover it is not brought within one year after such retention has been made.

4. USURY — Retention by Lender with Assent of Borrower of Part of Proceeds of Loan. — If the retention of part of the loan by the lender be with the assent of the borrower given after the loan was made, it is, in effect, a payment by the borrower of an excess beyond the lawful interest for the loan; and the borrower may both at common law and under section 5555, Code of 1930, recover the excess beyond legal interest so paid by him. But to do so in Virginia he must, by reason of the provision of section 5555, bring his action within one year from the time such excess was, in effect, paid by him.

5. USURY — Retention of Part of Loan by Lender — Original Valid Contract Not Affected. — If the retention of part of the loan by the lender be with the assent of the borrower, or if the retention of part of the loan is without the assent of the borrower, in neither case is the original valid contract vitiated either as to the payment of the principal or the legal interest stipulated for.

6. USURY — Verdict of Jury for Defendant Where Judgment Might Have Been Based upon a Finding that Borrower Had Not Agreed to Pay Lender the Sum in Question, or Might Have Been Based upon a Finding that Borrower Had Agreed to Pay the Sum in Question but that It Was an Usurious Contract — Former Adjudication or Res Adjudicata — Case at Bar. — Where the evidence in a common-law action showed that the verdict of the jury for defendant might have been based either (1) upon a finding that defendant had agreed to pay complainant an usurious consideration for a loan of money to her, or (2) upon a finding that the borrower had not agreed to pay complainant the sum in question for which it found a verdict, and that the lender was attempting unlawfully and without her assent to withhold the sum from her.

Held: That this being true, the judgment did not estop complainant from asserting in a later suit that the transaction in question was not an usurious loan.

7. FORMER ADJUDICATION OR RES ADJUDICATE — Action Based on Different Claims — Prior Action Involving Two Issues of Fact. — Where the second action is upon a claim or demand different from that asserted in a prior action between the same parties, the judgment in the prior action operates as an estoppel only as to those points or questions which were actually determined by the verdict of the jury. If the prior action involved two issues of fact, upon either of which standing alone the verdict properly might have been predicated, and it does not appear from the record upon which issue it was found, unless the uncertainty is removed by extrinsic evidence showing upon which issue it was found, neither issue is res adjudicata in a subsequent action between the same parties upon a different claim or demand.

8. WITNESSES — Testimony of Witness in Former Suit — Testimony of Party's Attorney as to Testimony of Party in a Prior Suit — Party Not Estopped from Asserting the Contrary. — The testimony of a party's attorney that the party in a prior action testified that she did not promise to pay defendant a bounty did not estop her from asserting the contrary in a later suit. As her husband was not a party to the prior action, it clearly did not estop him.

9. WITNESSES — Testimony by Party in His Own Behalf — Whether Party Estopped in a Later Suit by His Testimony. — The testimony given by a party as a witness in his own behalf in a prior action may be introduced in evidence by the other party in a subsequent action between the same parties, if it is relevant; but it does not, as a matter of law, work an estoppel against the party who gave such testimony in the prior action.

10. WITNESSES — Testimony by Party in His Own Behalf — Testimony of Plaintiff and Defendant. — A plaintiff in a suit or action has no more right to ask a jury or the court to disbelieve positive and unequivocal statements of fact made by him of his own knowledge as a witness in his own behalf, than a defendant has to ask it to disbelieve similar statements made by him as a witness in his behalf.

11. WITNESSES — Testimony by Party in His Own Behalf — Testimony of Plaintiff and Defendant — Testimony of the Real Party in Interest — Estoppel to Deny Testimony — Case at Bar. — Where in a suit to foreclose a mortgage, complainant, the real party in interest and his other witnesses, testified positively and unequivocally of their own knowledge that the defendants, through their agent, promised to pay complainant $1,000 and all expenses incurred by him, including any "brokerage" he might have to pay, complainant will not be heard to ask that, as a matter of law, the defendants shall be concluded to his advantage by a denial by them that this was true.

12. USURY — Evidence of Borrower's Husband — Evidence Held Not to Estop Borrower from Claiming that Lender's Own Testimony Showed an Usurious Transaction — Case at Bar. — In the instant case, a suit to foreclose a mortgage, the testimony of the borrower's husband was not of that nature which should be held, as a matter of law, to preclude either him or his wife from contending, and asking the court to hold that the testimony introduced by the lender showed that the transaction was an usurious one.

13. WITNESSES — Testimony of Party — Adverse Testimony Concludes Party. — The testimony of a party to a suit or action as to facts that are within his own knowledge, which were adverse to him, are binding upon and conclusive against him as a matter of law.

14. WITNESSES — Testimony of Party — Adverse Testimony Concludes Party. — Where the testimony of a party is of such a nature that it must be either true or false, the law does not allow the party to recover, or defeat a recovery by an affirmative defense upon which he has the burden of proof, when his testimony, if true, utterly destroys his case.

15. WITNESSES — Testimony of Party — Adverse Testimony Concludes Party — Party Not Concluded by Every Statement Made by Him — Case at Bar. — But a party who testifies in his own behalf does not do so at the peril of being concluded by every statement made by him which is a mere slip of his tongue or due to his not having understood the full import of the question asked him, as seems to have been the situation in the instant case.

16. USURY — Evidence Held to Establish that Borrower Promised to Pay Lender a Bonus and Expenses — Case at Bar. — In the instant case, a suit to foreclose a deed of trust, the great preponderance of the evidence, without giving any of it the force of an estoppel, supports, if indeed it does not require, a finding that the agent of the defendants told the complainant that the defendants would pay him $1,000 and all expenses he incurred, including any "brokerage" he might have to pay, and that in so doing he was acting as the agent of the defendants, within the scope of his apparent authority, and in accordance with the general understanding he had with the defendants, and the court so held.

17. USURY — Suit to Foreclose Trust Deed — Evidence Held to Establish that Loan by Lender to Borrower Was at a Greater Rate of Interest Than Allowed by Law — Case at Bar. — In the instant...