Case Name: George Lockwood v. Minot Mitchell and others
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1850-12
Citations: 19 Ohio St. 2d 448
Docket Number: 
Parties: George Lockwood v. Minot Mitchell and others.
Judges: 
Reporter: Cases decided in the supreme court of ohio : upon the circuit at the special sessions in Columbus
Volume: 19
Pages: 448–452

Head Matter:
George Lockwood v. Minot Mitchell and others.
Where a party, having a claim secured by mortgage, proceeds before it is due to obtain a decree for a larger sum than is actually owing, and by fraud and circumvention prevents the mortgagor from making a defense, such decree may be avoided, because of the fraud; and the party injured may proceed, by original bill, to set aside tho decree.
It is not necessary, in such case, tha-t the amount really due should be tendered before filing the bill.
This is a bill in chancery reserved in Erie county, and the case is submitted upon bill and demurrer.
The material allegations in the bill are as follows: — “ On the 17th of March, 1836, the complainant and his brother, Ralph Lockwood, who were then doing business in partnership at Milan, in Erie county, entered into an arrangement with two of the defendants, Minot Mitchell and Elisha Crawford, by which it was agreed that the Lockwoods should pay Mitchell and Crawford four hundred dollars, and Mitchell and Crawford were to loan to the Lockwoods $>8,000, at seyen per cent, interest, payable in five years, to be secured on real estate in Milan.' This agreement was subsequently consummated. Payments were made from time to time, of the interest and some of the principal, by the complainant, George Lockwood, Ralph Lockwood having died shortly after the loan was effected.
In 1842, on the payment of several hundred dollars by Lockwood, the loan was extended for five years, from the first of April, 1841. Sometime in December, 1843, complainant was taken to the Ohio lunatic asylum, where he remained until the latter part of 1845.
This confinement is alleged to have been unlawful, and to have been effected by James Lockwood, son of complainant. The object is asserted to be, that the said James might obtain possession of the property. Whilst the complainant was confined in.the lunatic asylum, in March, 1844, Mitchell and Crawford commenced proceedings, in the court of common pleas of Erie county, to foreclose their mortgage. Service was made on Lockwood, in the asylum. The complain ant employed the Marvins, as his attorneys, who filed a bill in the State of New York, againsrt Mitchell & Crawford, and the vice chancellor of New York granted an injunction, restrain ing the defendants from further proceedings on the mortgage; and the Marvins made their affidavits, stating that the cause in the New York court would be heard at the next January term, and that, in their opinion, the mortgage and notes would be decreed fraudulent and void. A copy of the proceedings in New York, together with the affidavits of the Marvins, was presented to the court of common pleas of Erie county, and the court, therefore, stayed all further proceedings on the mortgage. Whilst matters stood in this situation, in August, 1844, James Lockwood, and Mitchell and Crawford, entered into an agreement, to which the Marvins .and the executor of Ralph Lockwood became parties, by which it was agreed, that Mitchell and Crawford should employ James Lockwood to collect the amount of the notes and mortgage, which, they agreed, amounted to $11,514.98 ; which sum, the bill alleges, exceeded what was really due by more than $3,000. James Lockwood was to purchase in the property, and make sales, from time to time, during the tefm of four years, pay off Mitchell and Crawford, and retain the residue. The Marvins dismissed the proceedings in New York, James Lockwood proceeded to foreclose the mortgage and sell the property, became the purchaser, and has since conveyed it •to Mitchell and Crawford.
It is alleged in the bill, that this whole proceeding, on the part of James Lockwood and Mitchell and Crawford, was fraudulent, and carried on with intention of defrauding complainant out of his property. That at the time the Marvins dismissed the proceedings in New York, they were not authorized to do so; that James Lockwood, and Mitchell and ' Crawford, knew that they had no such authority, but that they were induced to do so by deception and misrepresentation. That complainant, during all these transactions, was confined in the lunatic asylum, and thereby prevented from doing any thing toward asserting his rights. That the decree was taken for several thousand dollars more than was actually due, and that it includes a large amount of usurious interest.
It is also stated that the property, that was sold for seven thousand dollars, was worth $75,000. The bill prays that the decree may be set aside as fraudulent and void; that an account may be taken, and that the amount of the principal, with legal interest, may be ascertained, deducting what is usurious.
P. B. Wilcox, for complainant, cited the following authorities :
Suffolk v. Green, 1 Atk. 450; 2 Munf. 407 ; Willis Pld. 381; Wilcox’s Forms, 655 ; 1 Fonbl. Eq. B. 1, ch. 1, note (h) ; 2 Ves. 137; 1 John. Ch. Rep. 367, 439; 10 Wheat. Rep. 367 ; Story’s Conf. of Laws, sec. 233, 292 ; 2 Kent’s Com. 460,1 ; 13 Pet. Rep. 65 ; 6 Paige’s Rep. 633 ; 1 Com. Rep. 274, ’8 ; 4 Ohio Rep. 384; 1 Ves. sen. 247; 1 Johns. Cases 429 ; 5 Johns. Ch. 184; 9 Pet. Rep. 632, 658 ; Story’s Eq. Pld., sec. 443 ; 6 Paige’s Rep. 571; 3 Monroe 356.
Andrews, Mitchell, and Lane & Son, for defendants, relied upon the following authorities :
Blydenburgh on Usury 16, 17, 22; 11 Ohio Rep. 417 ; 13 Ohio Rep. 107 ; 1 Johns. Ch. 367, 439 ; 5 John. Ch. 122; 6 Wheat. Rep. 567; 11 Met. Rep. 397; 6 Paige’s Rep. 5, 7.

Opinion:
Caldwell, J.
This case comes before us on demurrer to the bill, consequently the question to be decided is, simply, whether the facts alleged in the bill would, if true, entitle the party complaining to relief in equity.
In support of the demurrer, it is contended that the bill shows that a large amount of money was due on this mortgage, of principal and legal interest, at the time the decree of foreclosure was rendered, and that no tender being alleged the bill is demurrable. If the bill was filed merely for the purpose of deducting the usurious interest, this objection would be well taken. Indeed, if usury were the only objection tc the decree, it would be too late for the party to have even that rectified. The defense, to so much of the claim as might be usurious, could have been made in the former proceedings, and if the party either failed in proving it or neglected to make it, his right to assert it is now gone.
The bill, however, in this case, stands on much higher ground. If, as the bill alleges in this case, the complainant was, for a fraudulent purpose, confined in the lunatic asylum, and whilst thus situated, unable to defend his rights, Mitchell and Crawford, taking advantage of his helpless situation, commenced proceedings on a claim that was not due, with a fraudulent intent, and afterward, by fraud and deception, induced his attorneys to dismiss the proceedings, which were pending in New York, and which enjoined them from proceeding on their claim, knowing, a-t the same time, that those attorneys had no right to do so, and then took a decree for an amount much larger than was actually due, on which complainant's property was sacrificed, it would present a case of unmitigated fraud, attended with great injury to the person on whom it was committed ; a fraud on the court rendering the decree, as well as on the complainant.
A decree or judgment receives its force from the fact, that it is the decision of a competent tribunal, before which both the parties have had an opportunity of appearing and prosecuting their claims, and having them fairly adjudicated. When this is prevented by the fraud or circumvention of one of the parties, without the fault or negligence of the other, the decree or judgment of the court .cease? to have its binding effect, and it is competent for the party injured to resort to a court of chan eery to obtain relief.
The complainant has presented, as we think, a case that entitles him to relief by original bill; the demurrer will, therefore, be overruled.