Case Name: George Lockwood, survivor, etc., v. Minott Mitchell et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1857-12
Citations: 7 Ohio St. 387
Docket Number: 
Parties: George Lockwood, survivor, etc., v. Minott Mitchell et al.
Judges: Bartley, C. J., and Brinkerhoee, Scott, and Sutliee, JJ., concurred.
Reporter: Ohio State Reports, New Service
Volume: 7
Pages: 349–370

Head Matter:
George Lockwood, survivor, etc., v. Minott Mitchell et al.
1. "Where a loan was negotiated in the State of New York, the money advanced, note taken, and mortgage made with a stipulation to be repaid there, the laws of'the State of New York relating to usury, are applicable to the contract, although the loan was secured by mortgage .upon lands in Ohio.
2. Where a written contract on its face purports to be usurious, allegations and proof that the contract was not usurious must be explicit and clear of all doubt.
3. Where a loan is usurious, the borrower may waive the forfeiture and insist . upon the excess of interest being applied to the payment of the lawful interest.
4. If a contract be entered into between mortgagor and mortgagee, previous to-a decree of foreclosure and sale thereunder, whereby it is stipulated, in effect, that the decree and sale are not to operate as a satisfaction of, nor the sale to divest the lien for, the mortgage debt, nor the purchase money to be applied to pay the mortgage debt., but that the purchaser, as trustee of the '^'mortgagee, shall hold the land in trust as a fund, and to sell and pay off the mortgage debt. Meld, that the legal and equitable effect of such a decree and sale must be regarded as forming a part of the executory contract of the parties, and subordinate to the contract.
Where such contract is entered into and executed by persons in behalf of the mortgagor, without authority, the mortgagor being insane, the contract is not obligatory upon the mortgagor, and the decree of foreclosure and. sale, which formed a part of the executory contract, can not be treated in its operation and effect as if no such contract had been entered into. The-decree, being regular on its face, may be operative as to third persons, but title thereunder, held by the p urchaser, or by the mortgagee, derived' from such purchaser, is in trust for such insane mortgagor.
5. The above-mentioned contract having been entered into while the insane ■ mortgagor had a suit pending against the mortgagee, impeaching the mortgage debt for usury, and the contract having been entered into without authority, and in prejudice of the rights of the insane mortgagor, in respect of such pending suit, the trustees of the lunatic may require an account of the excess of interest beyond the lawful rate, as against the mortgagor, upon bill filed to make the mortgagee account for the lands and purchase-money received by him in discharge of the mortgage debt.
6. If the representatives of a deceased partner undertake, by contract with a creditor of the firm, and without authority, to affect the rights and estate of the firm, in a matter not severable, and over which the surviving partner had entire control, a court of chancery, when it affords the surviving part- ■ ner, as such, relief from the obligations of such unauthorized contract,, must necessarily treat the contract as wholly inoperative upon the firm.
In chancery. From Erie county. Retained, after reversal on •error, for further hearing and decree.
There is a very large mass of papers filed in this case which have no relation to the merits of the controversy. Such of the facts as it is deemed necessary, in order to understand the rules of law which the court apply to the case, will be stated.
In 1836, and for some years previous, George Lockwood, the ■complainant, and his brother, Ralph Lockwood, were engaged in business at Milan, in Erie county, as- partners. They owned, as •copartners, a large quantity of real estate at and near Milan, and were largely interested in the completion of the Milan canal, which was intended to connect the town of Milan with the navigable waters of the Huron river, and thus greatly increase the value of their town property. The firm becoming embarrassed, *George Lockwood, in March, 1836, went to the east, to raise funds for the ■firm. He met the defendant, Minott Mitchell, at his residence in White Plains, Westchester county, New York, where they entered into a contract as follows:
“It is agreed by and between Minott Mitchell, of the town of White Plains, in the county of Westchester, and State of New York, of the first part, and Ralph Lockwood and George Lockwood, of the town of Milan, county of Huron, and State of Ohio, of the sec•ond part, as follows, to wit: That in consideration of the sum of four hundred dollars, this day paid by the said Lockwoods to the said Mitchell, he, the said Mitchell, shall, on the 6th day of April next, pay over to said Lockwoods, at the office of Messrs. McCurdy & Aldrich, in the city of New York, the sum of eight thousand dollars, provided that at the time of payment of said eight thousand dollars, the said Lockwoods, or said McCurdy & Aldrich acting for and ■on behalf of said Lockwoods, shall deliver to said Mitchell the note •of said Lockwoods, for said eight thousand dollars, which note shall be made payable to said Mitchell and Elisha Crawford, and shall be payable five years after date, bearing interest at the rate of seven por cent, per annum, payable semi-annually; also, to deliver with .said note, a mortgage deed, duly executed by said Lockwoods, and by the wife of said Ralph, as to dower, and recorded in the records ■of said county of Huron, which mortgage deed shall be in favor of .said Mitchell and Crawford, to secure the payment of said eight thousand dollars, and shall include the following lands and lots, viz: certain lands and lots described in a certain mortgage deed, made out this day, and signed by said George Lockwood, in favor of said Mitchell and Crawford. In case the said mortgage deed shall not be received by said McCurdy & Aldrich, by the said 6th day of April next, then the said payment of the said eight thousand dol lars to the said Lockwoods, and the delivery of their note and mortgage deed, shall take place three days after said Lockwoods, or McCurdy & Aldrich, shall notify said Mitchell that said note and mortgage deed are ready for delivery. .
“ At any time after the payment of said eight thousand dollars, in case said Mitchell shall present the written opinion of John W. Allen, Esquire, of Cleveland, Ohio, that the property included in said mortgage deed is not worth double the sum then due on said mortgage — that, within ninety days thereafter, the said Lockwoods will make out a mortgage deed, or deeds, and execute it, or cause it to be done, on other property, so as at all times the said Mitchell and Crawford shall have the amount of the money so due, secured on property worth double the sum then due; and it is also agreed between the parties, that said Lockwoods may at any time pay any part or the whole of said note, but not in less sums than one thousand dollars at a time ; also, that in case that any part of the property mortgaged, the said Lockwoods shall wish to dispose of, that on their giving mortgage security on other property of equal value, or by procuring the written certificate of said Allen, that in his opinion, that the property then held by the mortgage, besides that which said Lockwoods may wish to dispose of, is then worth a sum of money, which -*sum shall not be less than double the amount then duo on said note; that in either of said conditions, the said Mitchell and Crawford shall release from the mortgage, the piece or tract the said Lockwoods may wish to dispose of.
“The payments of interest and of principal abovementioned to be made at the Leather Manufacturers’ Bank in New York, in bank bills, current in the county of Westchester, or in bankable money, at the option of the said Lockwoods.
“ Dated, White Plains, March 17, 1836..
“Minott Mitchell, [l. s.]
“ Geo. Lockwood, [l. s.] “E. Lockwood,
“By his attorney, Geo. Lockwood. [l. s.]
“ Sealed and delivered in the presence of “James Merkel.”
Ealph and George Lockwood, at or about the time the above agreement was entered into, paid Minott Mitchell the bonus of four hundred dollars mentioned therein. They received the eight thousand dollars, and executed their note and mortgage. The mortgage, which describes the note and premises, was as follows:
“ To all to whom these presents shall come, greeting: Know ye, that we, George Lockwood and Ealph Lockwood, of the town of Milan, county of Huron, State of Ohio, and Esther A., wife of said Ealph, for the consideration of $8,000, received to our full satisfac tion of Mitchell and Elisha Crawford, of White Plains, county of Westchester, and State of New York, do give, grant, bargain, and confirm unto the said Mitchell and Elisha Crawford, the following pieces of land, situated in Milan, aforesaid :
“ The first piece, consisting of lots numbers 5, 6, and 7, of Merry’s and Eldridge’s survey, in the southeast part of the fourth section of said towhship of Milan, containing about two hundred acres of land, bounded on the northwest by the town plot of Milan, and lot number 2 of said survey; on the northeast by the Main street, running from between lots numbers 3 and 4 of said plot, extending south thirty-five degrees east to the south line of said township of Milan; on the south, by said south line, and on the west by lot number 4 of said survey, excepting one acre out of lot number 5, conveyed to William S. Hyde, by deed now on the records of said county of Huron. The second piece, or farm, situate in the third section of said township-of Milan, containing one hundred and five acres, being the land heretofore conveyed by Josiah Smith and Tinker R. Smith, to Moses Gregory, by deed dated 23d April, 1823, and recorded in volume 3, page 652 of the records of said Huron county, in which said deed a particular description of the farm is given. The third piece is composed of the northwest and southeast three-fourths of lor, number 29 in said town plot, with the buildings thereon. The fourth piece, or tract of land lying in the third section of the township of Norwalk, in said county of Huron, containing about one hundred and thirty acres, being the *tract conveyed to said George and Ralph, by Stephen Saunders, by deed dated the 10th day of January, 1835, and recorded in volume 9, page '242, of said records of Huron. The fifth piece, containing about nineteen and three-fourth acres, lying in the fourth section of said township of Milan, bounded on the northwest by said town plot; on the northeast by land of William Clary and Lemuel Sales; on the southeast by a tract of land conveyed to Daniel Hamilton, and on the southwest by the before-described street, and by one-fourth of an acre owned by one Gregory.
“ To have and to hold the above-granted and bargained premises, with the appurtenances thereof, unto the said Minott Mitchell and Elisha Crawford, their heirs and assigns, to their proper use and behoof forever. And we do, for ourselves, our heirs, excutors, and administrators, covenant with the said Mitchell and Elisha Crawford, their heirs and assigns, that at and until the ensealing of these presents, we are well seized of these premises, as of a good and indefeasible estate in simple fee, and have good right to bargain and sell the same in .manner and form aforesaid, and that the same is free from all encumbranoes whatsoever. •
“And further, we do by these presents bind ourselves and our heirs, to warrant, and forever defend the above granted -and bargained premises, unto the said Mitchell and Elisha Crawford, their heirs and assigns, against all claims and demands whatsoever’.
“ In witness whereof, we have hereunto set our hands and seals,., the 17th day of March, in the year of our Lord 1836.
“Whereas, the said George Lockwood and Ralph Lockwood have this day executed their promissory note to the said Mitchell and Elisha Crawford, for the sum of $8,000, payable in five years-from the first day of April next, with interest at seven per cent., payable half yearly, from and after the said first day of April next. All payments to be made at the Leather Manufacturers’ Bank, in the city of New York, in moneys current at the time of payment in Westchester county, or in money bankable in said city, at the option of payers. Now, therefore, the condition of this deed is. such, that if the said George Lockwood and Ralph Lockwood shall pay the said principal sum and interest moneys, at the time and in the manner specified in said note, then this deed to be void, otherwise to remain in full force and virtue.
“ George Lockwood, [l. s.
“ Ralph Lockwood, 'l. s.
“ Esther A. Lockwood, [l. s.
“ Sealed and delivered in presence of Jacob Forshay, for G. Lockwood.
“Levi Wilcoxen, 1 Witnesses for Ralph Lockwood and Esther “T. J. Butman, j A. Lockwood.”
The mortgage was duly acknowledged and recorded.
The interest was paid to April 1,1842.
Ralph Lockwood died in October, 1838, leaving a widow and children. He made a will, declaring therein, that all lands standing in his and in his brother George Lockwood’s individual names, respectively, belonged to them in equal proportions ; made his wife, Esther A., and Henry Lockwood, and George L. Marvin, his executors, and empowered them, or any two of them, to lease, sell, convey, or partition his lands.
George Lockwood, shortly after the decease of his brother, became insane. His son, James C. Lockwood, took upon himself without any judicial authority, in December, 1843, to send his father to the lunatic asylum, at Columbus. In the meantime, Mitchell had brought seven actions of ejectment to recover possession Of the premises mortgaged to him ; and while these were pending, George Lockwood, then under treament in the lunatic asylum, employed LeGrand Marvin, a relative, and solicitor in chancery, residing in Buffalo, to file a bill in chancery against Mitchell and Crawford, in one of the vice-chancellor’s courts of the State of New York, alleging that the loan secured by the not© and mortgage was usurious aud void. Accordingly, in March, 1844, the bill was filed by Marvin, setting up usury, and praying an injunction to restrain Mitchell and Crawford from prosecuting their ejectment suits, then pending in the courts of Huron county, ■Ohio, or any suits on the note and mortgage, and to declare, by decree, the note and mortgage usurious and void. The vice-chancellor allowed the injunction. An answer was filed by Mitchell, alleging, among other things,'that the loan was not usurious, because secured on property in Ohio. A motion was made to dissolve the injunction, but was not pressed to a hearing. A few days after the motion was passed, and in July, 1844, Mitchell suggested to G-eorge L. Marvin, the law partner of LeGrand Marvin, at Buffalo, that one of them had better accompany him (Mitchell) to Milan, and endeavor to adjust the loan and its incidents. Accordingly, Mitchell and LeGrand Marvin went together to Milan. •G-eorge Lockwood was still in the lunatic asylum. James C. Lockwood, his son, was attending to his father’s affairs, but with•out any legal authority. The ejectment suits and the chancery ¡suit were still pending.
After various consultations between Mitchell, the executors of Ralph Lockwood, James O. Lockwood, and LeGrand Marvin, the ^following agreement was entered into, which may, for the purpose of reference, be denominated the family contract:
“Agreement made August 5, 1844, at Milan, in the county of Erie, and State of Ohio, between Minott Mitchell and Elisha Crawford, •the first party, and James C. Lockwood, the second party, wit■nesseth:
“ Whereas, said first party are owners of, and mortgagees in, a mortgage executed by Ralph Lockwood and wife, and G-eorge Lockwood, and- recorded in the Huron count}' (Ohio) records, vol. 11, pages 91 and 92; also, are owners of two judgments and bonds -of the town of Milan aforesaid, on which the interest is unpaid from and after April 1,1844.
“Now, the said first party, in consideration of the sum of one ■dollar, to them in hand paid, the receipt whereof is hereby confessed, and the said parties, in further consideration, each of the other’s agi’eement, as herein contained, do agree to, and abide by, and perform, as in the articles following, is provided for said parties respectively, to abide by and perform:
“Article 1. Said first party do hereby place under the control -of said second party, the said mortgage and the note therein mentioned, and permit hereby the foreclosuure of said mortgage, in ' ¡the name of said party, with full power on the part of said second party to cancel, or otherwise use for his own benefit, so much of said mortgaged indebtedness or premises, as shall not be expended in purchasing the four parcels of land hereinafter mentioned, after lie shall have so purchased the same.
“Art. 2. Said first party are, on the execution of this agreement, to transfer said two judgments and b4onds, with their interest, from. April 1, 1844, and out of which two bonds, said second party is to pay the assessments upon said mortgaged premises, for the bond
indebtedness of said town of Milan.
“Art. 3. The amount of said mortgage unpaid on
August 1,1844, is................................................... $9,394 05
“ The amount paid by said first party toward taxes on said mortgaged premises.................................... 80 93
“The amount of said two judgments and bonds on August 1, 1844...................................................... 2,010 00
“Amounting in the aggregate to........................$11,514 98
“Art. 4 The said second party is to cause to be foreclosed, with diligence, the said mortgaged premises, and thereunder to purchase in, four parcels of the mortgaged promises, to wit: ■
“ 1. What is described in said mortgage as the fifth piece, excepting the one-fourth acre in a burying-ground.
“2. What is described in said mortgage as the second piece, or farm, containing 105 acres.
“3. What is described in said mortgage as the first piece, consisting of lots Nos. 5, 6, and 7, excepting'therefrom said lot No. 5 “4. What is described in said mortgage as the third piece, composed of the southwest and southeast three-fourths of lot No. 29, and take the title thereof in his own name, and hold the same as trustee for said first party, and to account for the same-and proceeds thereof, as herein provided.
“Art. 5. Said second party is to sell, within one year after the title shall be purchased and perfected in him, so much of the said four parcels as that the amount of the such sales shall equal the .sum of $1,500; and within two years from the date hereof, so much of said four parcels as to equal the sum of $4,000; and within three years from the date hereof, so much of said four parcels as to *cqual the sum of $8,000; and within four years from the date hereof, so much of said four parcels as to equal the amount of said sum of $11,514.98, and interest from August 1, 1844, and to sell for such sums as shall be for the interest of the owners thereof.
“Art. 6. Out of the proceeds of said sales as provided in the last aforesaid article, and of the rents and profits of said four parcels of land, said second party is to retain his disbursements for the foreclosure aforesaid; also for all taxes and for all expenses incurred by said second party in taxes, or otherwise of said for uparcels; and after retaining such disbursements, the said second party is to account, annually, from dato hereof, to said first party for all his doings as such trustee, in the sales of said four parcels of land and otherwise; and thereupon annually pay over to said first party all moneys that he may have received as such trustee, and not so retained.
“Art. 7. At or before five years from the date hereof, the said second party is to render to the said first party a final account of his doings as such trustee, together with a full statement of all moneys received and disbursed, of and by reason of such trusts, and .not before accounted for as aforesaid; and is to thereupon pay over to said first party, all moneys not so retained, and transfer to ■said first party all contracts given for said lands, and which shall no.t have been paid up ; also, convey to said first party all the residue of said four parcels of land not prior thereto sold or conveyed.
“Art. 8. The said second party is to enter into no contract for said four parcels or any part thereof, to defer payment therefor for a period beyond said five years, except such only as said second party shall assume and at the end of said five years pay.
“Art. 9. At the final account so to be rendered, or prior thereto, in case the said second party shall pay, or cause to be paid said first party, the residue of the j>rincipal and interest to be computed semi-annually, and upaid of said $11,514.98; that henceforth, the said second party may no more account to said first party, for his doings, as aforesaid; but shall hereafter have, free and clear from said first party, the residue of said four parcels then unsold, and the contracts and moneys, being proceeds thereof, that is, the said first party to have no claim upon said second party, or his trust as aforesaid, after he shall have paid them the said sum of $11,514.98, and to be computed thereon interest semi-annually from August 1, 1844.
“Art. 10. Said second party, in and by the conditions of this agreement, is to incur no pecuniary liability, except for the due accounting and paying over, as aforesaid, ail moneys which he may, as such trustee, receive, and in good faith and management of said trust, and in the prosecution of this agreement; but is to give his requisite personal attention and services, as provided in this agreement, without any remuneration, till after the said first party shall have received said final account and been settled with as above provided.
“Art. 11. The sum of $50 is also to be added to the said sum of $11,514.98, and to be paid and carry interests accordingly.
“Witness our hands, as of the day and year first above written, to duplicates of this agreement.
(Signed,) “ Minott Mitchell,
“ Elisha Crawford, by Minott Mitchell, his att’y, “ James C. Lockwood.”
At the same time, Henry and Esther A. Lockwood, executors
*of Ralph Lockwood, and LeGrand Marvin in behalf of George Lockwood, but without any authority from George Lockwood, other than his relation to him as solicitor in the suit in chancery pending in New York, signed the following instrument:
“ We, George Lockwood, one of the mortgagors in the mortgage above mentioned, and Esther A. Lockwood, Henry Lockwood, and Goo. L. Marvin, executors of Ralph Lockwood, deceased, the other mortgagor in said mortgage named, for value received, hereby ratify and confirm the above-mentioned agreement, and admit the payment of the 2,000 dollars, mentioned in said agreement, to be applied in full payment of the taxes for principal and interest on the Milan town bonds, to the amount of said taxes as levied on said four parcels of land mentioned in said agreement; and we further •agree to aid and assist the said James C. Lockwood in carrying into effect his part of said agreement, and expedite the proceedings therein.”
To carry out this executory agreement, the seven actions of ejectment were dismissed; George Lockwood’s suit in chancery, in New York, was also dismissed, by his counsel LeGrand Marvin, but without the knowledge or consent of George Lockwood.
The note and mortgage were delivered over to James C. Lockwood, who employed an attorney at Milan, and placed them in his hands for collection. In September, 1844, a bill was filed in the court of common pleas of Erie county, in the name of Mitchell and Crawford, against George Lockwood, the executors and children of Ralph Lockwood, deceased, and others by name. The bill was in the usual form of a bill in chancery for foreclosure and sale of mortgaged premises. Neither the insanity of George Lockwood, nor his then temporary residence at Columbus in the lunatic asylum, nor the family contract entered into by James C. Lockwood, is mentioned. Subpenas were issued, in October, 1844, against all the defendants except George Lockwood, to the sheriffs of Erie and Huron counties, and most of them served, and the cause continued. Afterward, in February, 1845, a subpena was issued against George Lockwood, the lunatic, addressed to the sheriff of Franklin county j in which county the lunatic asylum is situated. Jamos C. Lockwood took this subpena to Columbus, and placed it in the hands of Graham, deputy sheriff of Franklin county; accompanied the iatter to the lunatic asylum, when it was served on George Lock-
wood ; and ajames C. Lockwood paid the fees of the deputy sheriff, and conveyed the writ to Erie county. At the June term, 1845, of the court, the attorney who appeared for the complainants, moved the court to appoint a guardian ad litem, as well for George Lockwood, a lunatic defendant, as also for Ralph Lockwood, an infant defendant. The record says, that “the court having seen the proofs and exhibits, do find that said George Lockwood is a lunatic, and order that George Reber, one of the attorneys of this court, be appointed guardian ad litem for the said George Lockwood.” The answer of Reber, as guardian ad litem of the lunatic, and of the infant Ralph, admits, in detail, the execution of the note and mortgage; that interest remains unpaid to April 1, 1842, and that the defeasance of the mortgage has become absolute, etc. Reber states in his deposition, that his answers were drawn by the attorney of the complainants, and that he was informed that the foreclosure was a family arrangement', and satisfactory to the parties.
At the June term, 1845, a decree was entered, in which the court 'find due to the complainants $9,920.05, with interest from the first day of the term; and on default of payment thereof and costs, direct a sale of the premises.
No traces of the family contract, under which these proceedings were had, appear in the record.
An order of sale was issued under the decree; the mortgaged premises appraised ; the whole bid off by James C. Lockwood, in October, 1845, for $7,192; and the sale confirmed, and a deed made to him, in November, 1845.
George Lockwood, who had been placed in the asylum on the 29th of December, 1843, was discharged therefrom August 1, 1845, his faculties in the same unsound condition as before.
Thus, in November, 1845, the title to the mortgaged premises was purchased and perfected in James O. Lockwood; who, under the stipulations of the family contract, was required, within one year from November, 1845, to sell so much of the four parcels, held by him in trust, as that the amount of such sales should equal the sum of $1,500. Mitchell, however, seems to have been unwilling that James O. Lockwood should dispose of the premises *under the trust created by the family contract; at all events, early in July, 1846, Mitchell, for himself and for Crawford, in writing, demanded of James C. Lockwood a conveyance to himself and Crawford of the fourth parcel of land described in the family contract, at the price of $1,500; and at the same time threatened that if he (James C. Lockwood) did not comply with this demand, they (Mitchell and Crawford) would institute a suit against him to compel him to do it, and to also pay the damages and costs, as well of such suit as those arising from his not complying with his duties as trustee. Mitchell also gave James C. Lockwood notice, in writing, that he should hold him personally responsible for the rents of the premises.
James C.. Lockwood then entered into a new contract with Mitchell, whereby he agreed to release and quitclaim to Mitchell the four parcels of land described in the family contract of August 5, 1844, in consideration of, and in full of Mitchell and Crawford’s claim under the mortgage and decree, and in discharge of the trust under said agreement. Accordingly, on the 3d of July, 1846, and before the time had arrived when Mitchell was entitled to any payment under the family contract, James C. Lockwood executed to Mitchell a quitclaim deed for the four parcels of land, with special covenants against his own acts, done while he held the title.
Mitchell then proceeded to sell and convey portions of the four-parcels ; and the property having risen in value, he received, and is entitled to receive, about fourteen thousand dollars from purchasers, and still holds a portion of the premises.
George Lockwood, soon after he returned from the lunatic asylum, complained of these transactions; and, January 1, 1849, filed a bill on the chancery side of the court of common pleas of Erie county, against Mitchell, Crawford, and others, setting forth by that bill, and by amendments afterward filed, in October, 1849, and January, 1853, in substance, the facts above stated, with allegations of fraud and collusion on the part of Mitchell, Crawford, James C. Lockwood, and LeGrand Marvin, in entering into the various contracts above set forth, and in procuring the foreclosure of the mortgage and sale under it, and the ^conveyance to Mitchell of the four parcels of land. It is alleged in the bills that the $400 which George Lockwood paid Mitchell when the original contract for the loan was negotiated, was an usurious advancement, which, by the laws of New York, rendered the note and mortgage void; and that the $400 should, in equity, “ be applied as so much payment of the interest thereafter accruing.” That LeGrand Marvin had no power to dismiss the chancery suit in New York; that Mitchell hold the lands conveyed by James C. Lockwood to him, under said mortgage, in trust for the complainant. The complainant further al leges, that “ he has been willing, at all times, to pay said Mitchell and Crawford all just debts, and especially all moneys justly and equitably due upon the said note and mortgage; ” but that said decree and sale on the mortgage was procured and obtained under said family contract, unauthorizedly, fraudulently, and was informal, erroneous, and void.
Mitchell and Crawford, in their answers, admit substantially the facts above stated, but deny all collusion and fraud, and all usury. They allege that the contracts made by James C. Lockwood for George Lockwood, while the latter was insane, were honest, and with the design to subserve, and did subserve, the interests of George and his family.
As to the $400 alleged to be usurious, Mitchell gives, in his answer, many reasons for his being paid that amount, over and above interest. It was to compensate him for permitting the Lockwoods to sell portions of the mortgaged premises, in case the part remaining was at least double the value of the amount due on the mortgage, thus subjecting him to the trouble of looking to and receiving further securities; it was to pay him for procuring the loan ; it was for the labor, trouble, and expense of converting bank paper, circulating in Westchester county, or in the possession of Mitchell, into funds par in the city of New York, where the loan was to be consummated. He further alleges that the discount and labor of converting bills current in Westchester county into city funds were at least one per cent.; and that George Lockwood assured him that, by the laws of Ohio, any |>erson could agree to receive any sum for the loan of money *which the borrower agreed to pay, and it could be recovered by him; and, finally, Mitchell says in his answer, that the four hundred dollars “was not paid by the said George, or received by this defendant, as a bonus or usurious consideration, but exclusively to induce this defendant to furnish the loan in New York city funds, to enable the Lockwoods to realize a profit of from ten to fifteen per cent, on the difference of exchange, which he in fact did realize, as he afterward informed this defendant, and also to induce this defendant to make such loan, subject to the privileges secured to the said Lockwoods, in the said agreement.”
Such proceedings were had in this suit of George Lockwood, that his bill was dismissed by the district court of Erie county, at April term, 1855. A petition in error, in the nature of a bill of review, was filed in this court, in April, 1856, and trustees were appointed, under the statute, to represent the interests of the insane complainant. The executors and heirs of Ralph Lockwood, deceased, have also been made parties, and have answered.
This court, at its February term, 1857, reversed the decree of the -district court, and retained the cause for further hearing and decree.
Homer Goodwin and G. P. Wolcott, trustees, for complainant.
S. F. Taylor, for James C. Lockwood.
W. F. Stone and N. H. Swayne, for Mitchell and Crawford.
S. T. Worcester and Fe Grand Marvin, for the executors and heirs of Ralph Lockwood.
Fbenezer Andrews, for other defendants.
Homer Goodwin made the following points for complainant:
I. George Lockwood as the surviving partner of Ralph Lockwood, had the exclusive right to control the mortgaged lands for the purpose of paying the partnership debts and closing up the affairs of -the firm. Coll, on Part., sec. 129; Greene v. Greene, 1 Ohio, 535; Sumner v. Hampson et al., 8 Ib. 365; Heirs of Ludlow v. Cooper’s Devisees, 4 Ohio St. 1; 1 Story’s Eq., sec. 674; Dyat v. Clark, 5 Met. 576; Burnoido v. Merrick, 4 Ib. 540; 3 Kent Com. 63, 64.
*11. The decree in the foreclosure suit in Erie county, was void as against George Lockwood, because he was not made a party thereto by service of process in the mode the law required, and was prevented by circumvention, and without his fault, from making .a successful defense. The decree did not divest him of title to the lands.
III. The laws of New York must determine the character of the loan. 11 Ohio, 341; Coote, Mortg. 301, 385; Goodsall v. Brig St. Louis, 16 Ohio, 180; Savings Fund v. Philadelphia, 4 Law Reg. 1, 75; McCormick v. Alexander, 2 Ohio, 76; 2 Kent Com. 454, 458, 461; DeWolf v. Johnson, 10 Wheat. 367; 3 McLean, 339; Stepleton v. Conway, 1 Ves. Sr. 428; 3 Atk. 727; Conner v. Belmont, 2 Id. 382; Dewer v. Spon, 3 Term, 425.
1Y. The contract was usurious and void by the laws of New York. 1 Rev. Stat. 760, sec. 5. And being void there, is void everywhere.
Y. George Lockwood, having had no opportunity to make the defense of usury in the suit in Erie county, may now avail himself of that defense under this bill, filed directly to impeach the decree there rendered. Bank of Wooster v. Stevens, 1 Ohio St. 233.
VI. The court will not require a tender of the amount due. Livingston v. Harris, 11 Wend. 529; 3 Paige, 528; Cole v. Savage, 10 Ib. 590; Post v. Bank of Utica, 7 Hill, 399; Jackson v. Nichols, 1 Seld. 182.
VII. In case the court refuse to disturb that decree, they will’ hold that James C. Lockwood acquired the legal title in trust, and that Mitchell got from him a like trust estate, and must account to George Lockwood.
VIII. The purchasers from Mitchell are not entitled to the privileges of bona fide purchasers without notice, because every one of them are here in default, and most of them purchased pendente lite„
N. S. Swayne, for Mitchell and Crawford:
1. The lunacy of George Lockwood, at the time of the service *of the process, and the rendition of the decree of foreclosure and of the sale in 1845, does not render the decree either void or voidable, unless it were procured by fraud. Tomlinson v. Devore, 1 Gill, 345; Alison v. Taylor and others, 6 Dana, 88; Crippen v. Culver, 13 Barb. 424; Person v. Hamlin and others, 14 Barb. 488; Bush v. Pettibone, 2 Comst. 300; Sternberg v. Schoolcraft, 2 Barb. 154; Hopson v. Boyd, 5 B. Monroe, 296; Breckenridge v. Ormsby, 1 J. J. Marsh. 237; Richardson v. Strong, 13 Ired. 107; Beals v. Lee, 10 Barr, 56; Nut v. Verney et al., 4 D. & E. 121; Kernot v. Norman, 2 Ib. 390; Pillop v. Sexton, 3 B. & P. 550 ; Sergeson v. Seeley, 2 Atk. 411; Neal et al. v. Morley, 9 Ves. 478; Baxter v. Earl of Portsmouth, 2 Carr. & P. 178; Dane v. Kirkwall, 8 Id. 679; Molton v. Camronx, 2 Exch. (W. H. & G.) 486; 4 Id. 17 S. C.; Brevan v. McDowell, 26 L. & Eq. 540. There was no fraud.
II. 1. The facts make such a case of acquiescence and ratification as is binding upon George Lockwood and the heirs of Ralph. Breden v. Dubarry, 14 Serg. & R. 30; Ruggles v. Washington Co., 3 Mo. 500; Rall v. Watts, 5 Richardson’s Eq. 143; Comoe v. Port Henry Co., 12 Barb. 53; Perry v. Hudson, 10 Ga. 362; Lawrence v. Taylor, 5 Hill, 113; Crawford v. Buckley, 18 Ala. 270; Palmerton v. Huseford, 4 Denio, 166.
2. In cases of fraud, a remedy must be sought promptly on its discovery, or it will be held to have been waived or acquiesced in. Chit. Contr. 680; Id., note 409; Campbell v. Hurt, 28 Eng. C. L. 29; 3 Nev. & M. 834, S. C.; Selway v. Fogg, 5 Mees. & W. 81; Hough v. Richardson, 3 Story, 651; Gould v. Gould, Id. 516; Vesey v. Williams, Id. 6 12 Where there has been delay, sufficient reasons must be stated in the bill. The omission to state them will be1 fatal. Sterns v. Rages, 1 Story, 204.
3. The legal representatives of Ralph have acted honestly for the benefit of his estate; his heirs are bound by their action. Howard v. Babcock, 7 Ohio (pt. 2), 73.
III. It is by no means admitted that George Lockwood, as' surviving ^partner had the exclusive right to control the mortgaged lands. For the full exposition of the rules and learning upon this subject, vide Coll. on Park., sec. 133, and post; Buchan v. Sumner, 2 Barb. Ch. 167; Smith v. Jackson, 2 Ed. Ch. 28; McDermot v. Lawrence, 7 Serg. & R. 438; Hale v. Henry, 2 Watts, 144; Dyot v. Clark, 5 Met. 576.
IY. As to the effect of the proceedings in the foreclosure suit in Erie county.
George Lockwood was properly served with a subpena in Franklin county. Swan’s Stat. (old ed.) 701, see. 7; Sturges & Anderson v. Longworth, 1 Ohio St. 551, 554; Phelps v. Phelps, 7 Paige, 150.
The court had jurisdiction of the subject-matter; any irregularity will not render its action void. This is not a bill of review to reverse the decree for error, but a bill to set it aside as a nullity. In such a case, any irregularity however great will not be-regarded. Adams v. Jeffries, 12 Ohio, 257; Mitchell v. Eysler, 7 Id. 257; Bank U. S. v. Vorhees, 10 Pot. 449; U. S. v. Aredondo, 6 Ib. 729; Dunn v. Dunn, 4 Paige, 425, 431.
One-half of the. mortgaged premises belonged to the heirs of Ralph Lockwood. Their title passed even if there were a fatal defect as to-George. Downing v. Collins, 2 B. Mon. 95.
Y. Usury. The contract is governed by the laws of Ohio. Chapman v. Robertson, 6 Paige, 627:
There was no usury. The $400 were no more than a fair compensation to Mitchell for the terms and provisions of the contract,, beyond'the more loan of the money. Such compensation he might properly take. 2 Pars. Contr. 410. See also Palmer v. Baker, 1 Maule. & Selw. 56; Carstairs v. Sleen, 4 Ib. 192; Hall v. Daggot, 6 Cow. 657; Nourse v. Prime, 7 Johns. Ch. 69; Suydan v. Westfall, 4 Hill, 211; Suydan v. Barth, 10 Paige, 94.
There being no fraud proved, this case.is not affected by Lockwood v. Mitchell et al., 19 Ohio, 448. It is controlled by Bank of Wooster v. Stevens, 6 Ohio St. 262.
No relief can be had in equity without an averment of a willingness *to pay and a tender of the amount equitably due. Bank of Wooster v. Stevens, 6 Ohio St. 262, and authorities there cited.
This averment is jurisdictional, and the want of it is fatal to the case. Stanley v. Gladsby et al, 10 Pet. 521.
YI. Trusteeship of James C. Lockwood.
George Lockwood was not a party to the agreement between Mitchell and Crawford and James C. Lockwood; and it was such .an arrangement as Mitchell and Crawford had a right to make with .any third person, and such an one as any third person had a right to make with them.
The sale and conveyance by James C. Lockwood to Mitchell and •Crawford, was a fair execution of the agreement of August, 1844, between the parties.
Instead of running the sale through five years, and giving Mitch•ell and Crawford the proceeds, he made a single sale to them, and thus paid the debt. This he had a right to do.
The case must be tried as it is made by George Lockwood, and with reference exclusively to his rights.
G. P. Wolcott made the following points for complainant:
I. The decree rendered against the complainant in the court of ■common pleas of Erie county was, as between him and James C. Lockwood, a nullity, and did not, therefore, divest him as against .James C. Lockwood, of any rights or advantages which before that time pertained to him.
1. The complainant, at the time of the commencement of these proceedings, was confined in close custody at the lunatic asylum in Columbus. He had been sent there by his son, James C. Lockwood, without process or inquest of any kind, and was kept there solely .at the will of the latter, who was in fact the complainant in the •original proceedings.
2. Now, whether George Lockwood had or had not a good defense to the proceedings instituted by his son James C., it is too clear for argument that that son can not lock up his father — institute proceedings against him while thus locked up, for the purpose of •obtaining title to his property — procure a guardian to admit that the father has forfeited his rights — obtain a decree on that admission — and then set up a decree so obtained as an estoppel against the father. The law tolerates no such monstrous injustice. But,
3. George Lockwood had a full and complete defense to that proceeding, which his son James C., by confining him, prevented him< from making. The note and mortgage were governed by the law of New York, and by that law were usurious and void.
(a.) The general rule is, that where a contract is made in one state, which by its terms is to be performed in another, it shall be governed as to its construction and validity by the law of the place-of performance, because the parties are naturally supposed to have had reference to that law when making the contract. 2 Kent’s Com. 459, 460; Story’s Conflict, secs. 291-406; De Wolf v. Johnson, 10 Wheat. 367; Andrews v. Pond, 13 Pet. 65. The case of Chapman v. Robertson, 6 Paige, 627, cited by defendant’s counsel, does not, in the decision, controvert this rule. The reasoning, however, of the court has been frequently questioned (see Kent and Story where, quoted above), and in the very recent case of Curtis v. Leavitt, 15 N. Y. (1 Smith), the court of appeals has directly overruled that reasoning.
(b.) The fact that a note payable in one state is secured by a mortgage of real property in another state, does not (the mortgage-being a mere incident to the note) withdraw the note from the operation of the law of the place of payment. The mortgage may be looked at as an item of evidence, in connection with the other circumstances of the case, to ascertain whether the parties had reference in their contract to the law of the place of the mortgage, or the law of the place of payment, but it avails nothing more. All the circumstances in this case establish beyond doubt that the parties here contracted with reference to the laws of the State of New York. See Curtis v. Leavitt, supra.
By the laws of New York the note and mortgage are void for usury. The lender stipulated for a greater rate of interest than *seven per cent, per annum. The bonus of $400 was nothing , but a cover for usury.
4. This defense to the bond and mortgage was not only a complete one, but up to the time of the agreement made between. Mitchell, Crawford, and James C. Lockwood, on the 5th of August, 1844, it had been entirely successful.
5. This defense is still available to George Lockwood — at least as against his son James — for he has never had his day in court.
II. Under the facts of the case, it is too clear for question, that. George Lockwood, as against his son James C. Lockwood, is enti ■tied to an immediate, unconditional restoration of the mortgaged premises, and to every legal and equitable right which pertained to him before the decree was rendered. But—
III. Mitchell and Crawford stand in no better or different situation than James C. Lockwood.
IT. With three exceptions, all the purchasers from Mitchell and •Crawford stand in the shoes of the latter, and of James C. Lockwood.
Y. The objection that no tender was made (even if true in point •of fact) has no application to this case. Its circumstances obviate ■the necessity, and indeed preclude the possibility of a tender, in the •ordinary sense of that phrase.
YI. Lockwood is not estopped by any acts of acquiescence.

Opinion:
J. R. Swan, J.
I. Was the loan of $8,000, in respect to the question of usury, to be governed by the laws of New York or .of Ohio ?
The contract for the loan was made in the State of New York; the money was advanced there; the note and mortgage delivered there; and the loan was to be repaid there. The fact that one of the incidents of the debt consisted of a lien, by way of mortgage, upon lands in Ohio, to secure payment, does not change the law in this respect. It was a contract not only made, but to be performed in the State of New York, and must be governed by the laws of that state.
II. Was the loan usurious?
Four hundred dollars, being five per cent, on the loan, was paid *to Mitchell. What was the consideration of this? The written contract of March -17, 1836, given above, states substantially that it was in consideration that Mitchell would advance and loan to the Lockwoods eight thousand dollars at a future day. On the face of the contract, and by its terms, the four hundred dollars was an open and undisguised gratuity for the loan of money over .and above the seven per cent, interest on the loan. Mitchell in his .answer denies this, and assigns the usual reasons which lenders give for withholding a loan from an unfortunate borrower; bank bills in Westchester county were not worth as much as money in the city of New York ; the difference, together with the trouble of converting bank bills current in Westchester into funds current in .New York, was at least one per cent.; that the Lockwoods would make a considerable profit on the loan when they received it, by the difference in exchange between New York and Ohio; that George Lockwood assured Mitchell that, by the laws of Ohio, he might take what he pleased for the loan and recover. Such reasons as these, especially the last, for taking the bonus of four hundred dollars, only confirm in our minds the belief that the terms of the contract truly state the consideration of the four hundred dollars, and throw so much suspicion over the only plausible reason given in the answer, to wit, a compensation for looking to and changing securities, that we have had no hesitation in coming to the conclusion that the transaction is tainted with usury. It would require a clear, distinct and sufficient consideration for the payment of the four hundred dollars to be alleged and proved, to overcome the usurious consideration stated in the written contract. Instead of this, parts of the consideration alleged are no consideration at all. No means of determining the value of the others are alleged. The trouble and vexation of taking the note and mortgage, or drawing his check for the eight thousand dollars, might as well have formed a part of the consideration as some of those stated by Mitchell.
III. As to the effect of the loan being usurious.
The complainant has so shaped his bill and prayer for relief that, while he claims that the contract was tainted with usury, he does *not set up the statute of New York for the purpose of avoiding the payment of the loan, but simply claims that the excess of interest was paid without consideration, and prays that such excess may be applied as payment on the interest.
We perceive no objection to a party thus consenting to the equity and at the same time requiring a credit for the excessive interest. No objection to this is made or can be made by the defendants.
IY. The real difficulty in. this case is to determine the effect upon the rights of George Lockwood, of the family contract, decree and sale to James C. Lockwood, under the mortgage, and the conveyance by him to Mitchell.
At the time that contract was entered into, Mitchell was enjoined from further prosecuting his claim on the ground that it was usurious. Sis hands seemed to be tied and with a fair prospect of losing both principal and interest. In this condition of things, he procured a meeting of the friends of George Lockwood, who was then in the asylum, and they entered into the family contract.
Two objects seem to have been in view. Mitchell desired to avoid the question of usury and to get rid of the pending injunction. James C. Lockwood desired to obtain such a control of his father's property as that it might be sold to pay debts. Proceedings under the mortgage were therefore provided for by James C. Lockwood, not for the purpose, by sale under a decree, to pay the mortgage debt, but to vest the legal title of the mortgaged premises in him. And these proceedings under the mortgage were consented to by Mitchell, not for the purpose of asserting his lien upon the mortgaged premises, and by decree creating a fund for the payment of the debt, for he was not to be paid by a sale under the decree, nor was he to enforce his lien by an order of sale; his object was to have his debt recognized and get rid of the chancery suit in New York. To attain these results it was agreed that the chancery and ejectment suits should be discontinued ; that the amount of the loan and interest be restated; that James C. Lockwood should prosecute to foreclosure the mortgage made by George and Ralph Lockwood to Mitchell *and Crawford; that James C. Lockwood should bid off the premises, but should pay nothing as purchaser; that Mitchell and Crawford, however, should follow a part of the land into the hands of James C. Lockwood, to secure the mortgage debt, the latter holding the premises as trustee for Mitchell and Crawford, and selling and accounting for proceeds of sales and of rents, to pay the mortgage debt.
This was a very ingenious mode, on the part of Mitchell, of defeating the claim of usury set up by George Lockwood, the lunatic; and a very ingenious mode, on the part of James C. Lockwood, to divest his father of the legal title to his real estate.
In the first place, let us ascertain what effect the family contract had upon the decree.
A decree of foreclosure ordinarily bars the right of the mortgagor to redeem by payment of the mortgage debt; a sale is made under the decree to satisfy the mortgage debt; the purchaser at such sale takes the title, unincumbered by the mortgage debt, and cleared off all claim of the parties to the mortgage. But in the case before us, even if we treat the family contract as obligatory upon George Lockwood, the decree of foreclosure did not operate to bar the equity of redemption; for it is clear, that the moment James O. Lockwood purchased and obtained title under the decree as trustee, to pay the mortgage debt, George Lockwood might, notwithstand ing the decree, have then tendered to James C. Lockwood, the-trustee, and Mitchell and Crawford, the amount of the mortgage-debt, and enforced a reconveyance of the premises.
Nor was the sale to James C. Lockwood, under the decree, made-for the purpose of satisfying the mortgage debt; for James C. Lockwood was not to pay anything on his bid, nor was his bid to-be credited upon the decree. Nor was the purchaser to take the-title unincumbered by the mortgage debt, or cleared of the claims-of the parties to the mortgage. The debt was to stand and follow the premises, notwithstanding the sale. This decree, therefore, as-a decree of foreclosure, was made inoperative, as such, by the terms-of the family contract. That such a contract, if entered into by the parties to a decree, or their authorized *agents, would be valid, and that a court of chancery would enforce it, and make the operation of the decree subordinate to the stipulations of the parties, we entertain no doubt.
The prosecution of the suit on the mortgage, the amount of the decree, the decree itself, the sale thereunder, and the rights- and estate acquired thereby, were inseparable parts of, and subordinate to, the stipulations of the family contract.
George Lockwood was not a party to this family contract, and no one was authorized to act for him. The family contract being-unauthorized and void as to him, and the decree having been procured in consideration of the stipulations of the contract, and, indeed, forming apart of it, what shall be the operation and effect of the decree? Not, certainly, as a har to George Lockwood's-right to redeem, for that would be giving it, as we have seen, a more stringent effect than if the family contract had been authorized by him, and an effect, too, which Mitchell and Crawford did not contemplate. Nor is it necessary, in order to protect the rights-of George Lockwood, that the decree, or the sale thereunder, should be impeached for fraud or error, or that the legal title acquired under the decree, by James C. Lockwood or Mitchell, should be pronounced invalid. But we can not, under the facts, do less than-hold James C. Lockwood and Mitchell to be trustees of the estate-of George Lockwood, liable to account to him for sales-, and the premises unsold, and George Lockwood liable to account to Mitchell and Crawford for the real amount of the mortgage debt. By thus-holding, we recognize the decree as valid and operative as to third persons, protect the just rights of Mitchell and Crawford under their mortgage, and treat the decree as so inseparably connected with the stipulations of the family contract as not, in its operation and effect, to conclude the rights of George Lockwood as against the parties to that contract.
Y. As to the disposition of the usurious interest.
One of the objects which this family contract was intended to effect, and did effect, was the dismissal of the suit in New York, brought to impeach the mortgage debt for usury. The family contract being unauthorized and void as to George Lockwood, the'dismissal of that suit being also unauthorized and to the prejudice *of the rights of the insane mortgagor — there being in fact usury in the transaction — the trustees of the lunatic being now required to account to Mitchell and Crawford for the principal and interest, are entitled to at least credit the excess of interest beyond the lawful rate, as claimed in the bill.
YI. As to the relation of the representatives of Ralph Lockwood to the surviving partner, and to the decree in his favor.
George Lockwood, as surviving partner of the firm of George and Ralph Lockwood, was vested with the entire estate and control of the property of the firm. The representatives of Ralph Lockwood had no such distinct interest or authority, in settling the debts of the partnership or disposing of its estate, as would authorize us to enforce their agreement, to the prejudice of the authority •or the rights of George Lockwood, as surviving partner. We can not separate the unauthorized contract of the representatives of Ralph Lockwood, in relation to the debts and estate of the firm, and enforce them against such representatives, and at the same time vindicate the rights and authority of George Lockwood, as .surviving partner. The rights of the representatives of Ralph Lockwood must therefore be controlled by, and follow the rights •of Geoi'ge Lockwood. Thex*e may be eases in which the rights of .a surviving partner, and of the represexitatives of a deceased partner, may be concluded by the contracts of the latter ; but this is not such a case. Here the representatives, as such, were dealing with a contract and an estate over which they had no control, and in such a manner as directly to impair the rights and affect the authority of the surviving partner.
This case will be referred to a master, to state an account in accordance with the views above indicated.
Bartley, C. J., and Brinkerhoee, Scott, and Sutliee, JJ., concurred.