Chakales v. Djiovanides

• Decision Date: 21 September 1933
• Citation: 170 S.E. 848
• Parties: CHAKALES et al. v. DJIOVANIDES et al.
• Court: Virginia Supreme Court

170 S.E. 848

CHAKALES et al.

v.DJIOVANIDES et al.

Supreme Court of Appeals of Virginia.

Sept. 21, 1933.

[COPYRIGHT MATERIAL OMITTED]

Appeal from Circuit Court of City of Hopewell.

Suit by Constantine J. Djiovanides and another against Stavrola Chakales and husband. Decree for complainants, and defendants appeal.

Modified, and affirmed as modified.

Argued before CAMPBELL, C. J., and EPES, HUDGINS, GREGORY, and BROWNING, JJ.

John J. Wicker, Jr., of Richmond, and Kirk L. Woody, of Hopewell, for appellants.

Plummer & Bohannan, of Petersburg, and Heflin & Adams, of Hopewell, for appellees.

EPES, Justice.

This is a suit in chancery brought by Constantine J. Djiovanides (commonly called Costt John) and John P. Goodman, trustee, against Stavrola Chakales and her husband, George Chakales. A decree was rendered in favor of the complainants, from which decree the defendants are appealing. The parties will be herein referred to as complainants and defendants as they appeared in the circuit court.

The subpoena summoning the defendants to answer the bill was issued on March 27, 1931, and the original bill was filed that day. The amended bill, which was filed April 16, 1931, alleges the following facts as the basis of the relief prayed for:

Stavrola Chakales owns a lot on Main street in the city of Hopewell, Va., which has on it a brick building which is divided into two storerooms, which are referred to as the large store and the small store.

By a duly recorded deed of trust, dated May 26, 1930, Stavrola Chakales and her husband, George Chakales, conveyed this property to John P. Goodman, trustee, in trust to secure the payment of a principal note of even date for $15,000 payable five years after date, and ten notes for $450 each, representing the semiannual installments of interest on the principal note at 6 per cent per annum. All eleven notes are drawn by Stavrola Chakales and George Chakales payable to their own order at the Hopewell Bank & Trust Company, are by them indorsed, and are now and always have boen held by Costt John.

This deed of trust contained the following provisions:

"It is understood and agreed between the parties that the noteholder, Constantine J. Djiovanides, is to collect all rents accruing in a certain store-room upon said property on which this deed of trust is given, it being the larger store-room of two (2) certain storerooms; by the signing of this instrument the said parties of the first part are assigning all rents to the said Constantine J. Djiovanides, for the duration of the period for which this loan is granted, the said Constantine J. Djiovanides is to apply the said rent first to the payment of the interest on this trust, second to the payment of taxes and insurance and third to the upkeep of said building and that at the end of each year the said Constantine J. Djiovanides isto furnish a report of the amount of money collected and disbursed to the said parties of the first part and if there be any difference after paying all expenses, including interest, then the said Constantine J. Djio-vanides is to apply same on the principal note:

"It is also understood that should this store-room become vacant at any time during the period of this trust then the said Constantine J. Djiovanides shall have the right to collect the rents from the adjoining storeroom which is the smaller of the two, the assignment of this rent is given for the express purpose of taking care of the expenses created by this trust, and that this assignment shall take priority over any other assignment or over any order of the court; in the event that this assignment of rent is terminated without any cause of the said Constantine J. Djiovanides, then it shall become the duty of the trustee at the request of the note-holder to advertise and sell the above described property according to the terms of this trust, the failure to collect the rents shall he deemed a breach of the covenants which shall make all notes due and payable at once.

"In the event that default shall be made in the payment of the said principal or any of the interest notes or any renewal thereof at maturity or of the taxes or insurance premiums as hereinafter provided or in the event of the breach of any of the covenants herein contained, then it shall" be the duty of the trustee, on being requested so to do by the holder of said notes or renewal to take possession of and sell the property hereby conveyed, after first advertising the time, place and terms of sale * * * and out of the proceeds of such sale the said trustee shall pay first the costs and expenses of this trust and next the said note or notes or renewal thereof and the surplus, if any, he shall pay over to the said Stavrola Chakales, her personal representatives or assigns.

"The said Stavrola Chakales and George Chakales, during the continuance of this trust, shall pay all taxes upon the property hereby conveyed as the same shall become due and payable, and shall keep the buildings thereon insured in some reliable insurance company against loss by fire for the benent of this trust, in such sum as shall prove satisfactory to the said trustee; and pay the insurance thereon; and in default of the payment of such taxes or insurance premiums when due, the said trustee or the holder of the said note or notes or renewal may pay the same, and all sums so paid shall be deemed a part of the expenses of this trust." (Italics ours.)

On May 26, 1930, as a part of the same transaction, a written agreement relating to the assignment of rent mentioned in the deed of trust was made and signed by Stav rola Chakales and Constantine J. Djiovanides, the material parts of which are quoted in the footnote.¹

The covenants in the deed of trust have been broken in four particulars, and by reason of these breaches Costt John has become entitled to have the trustee take possession of the property and make sale thereof in accordance with the terms of the deed of trust.

The four particulars in which the covenants of the deed of trust have been broken are: (1) The makers have failed and refused to pay the interest note due November 20, 1930. (2) They have failed to pay the premiums on the insurance on the property, and Costt John has paid one of them. (3) The buildings on the property have not been kept in repair and are depreciating in value. ² (4) The covenants with reference to the rent have been broken.

Costt John has required the trustee to proceed to make sale under the deed of trust; but there is a dispute and a conflict between Costt John and the defendants as to their respective rights, and the trustee believes that if he should endeavor to take posses-sion of the property and try to make sale thereof he would be interfered with by the defendants.

In connection with the fourth breach of the covenant assigned, the bill makes these allegations:

"Tour complainant, Costt John, for a short period after the execution of the said deed of trust and the said agreement collected the rents from the said property, which has been assigned to him, but the rents so collected were not sufficient to pay the taxes and insurance and to provide for the upkeep of the building upon the said property.

"For some months past the larger of the two store-rooms mentioned in the said deed of trust and agreement has been in the possession of the son of Stavrola Chakales, 3 and the smaller of the said store-rooms was until recently in the possession of George Chakales, the husband of the said Stavrola Chakales, but is now vacant and unoccupied and the said Stavrola Chakales is contemplating the removal of the partition between the two store-rooms and converting the same into one room, all of which is in violation of the agreement between your complainant Costt John and the said Stavrola Chakales and is against the interest of your said complainant. Your said complainant further alleges that within the past few days he has received an offer of Fifty Dollars ($50) a month for the smaller of the said store-rooms. * * *

"Your complainant has made demand upon the tenants of the said property for the rent due thereon, as he had the right to do, * * * (but) they have refused to pay the same and have told your said complainant that he would have to go to court to collect the same, and * * * no rent has been paid your complainant by either of the tenants now in possession of the said property. Your complainant further alleges that the said property was placed in the possession of the members of the family of the said Stavrola Chakales in order to defeat your said complainant in the collection of the said rents and in order to make non-effective the provisions of the said deed of trust and agreement with respect to the collection of the said rents. That the assignment of the rent has been terminated without any default or cause on the part of your said complainant, and that the failure to collect the said rent or to pay the same is a breach of the covenants referred to in the said deed of trust and that all the notes secured thereby are, under the express provisions of the said deed of trust now due and payable and are unpaid."

The material prayers of the bill, which also contains a prayer for general relief, are as follows:

(1) "That this court will direct the said trustee in the performance of his duties."

(2) "That the court will instruct the said trustee to make sale of the said property and that the court will enjoin and restrain the said Stavrola Chakales and George Chakales, their agents, servants and employees from interfering with the said trustee in the performance of any duties imposed or in the exercise of any powers granted by the said deed of trust or conferred upon him by this court."

Stavrola Chakales filed her separate answer in which she admitted the allegations of the bill as to the text, execution and delivery of the notes, deed of trust, and contract mentioned in the bill, but denies every other allegation made in it. Her...