and 85 New York State Reporter. the moneys so paid by him, and the assignment of the mortgage to the bank was made in pursuance of that arrangement; that the plaintiff was without means to pay said mortgage; and that there was a prior incumbrance by mortgage upon his real estate for $60,000. Judgment was demanded that the mortgage should be declared null and void, and canceled of record, and that the proceedings in the supreme court resulting in the execution of such mortgage he set aside and vacated "as unadvisedly made and granted by this court," and for further relief. The defendants answered, alleging that the proceedings that were attacked in the complaint as invalid were valid. The issues were tried at the Monroe equity term, and upon the trial the defendants' counsel moved to dismiss the complaint upon the pleadings, and upon the opening of counsel for the plaintiff (which was substantially a statement of the matters set forth in the complaint). upon the ground that the complaint did not set forth a cause of action; and (1) it neither questions the jurisdiction of the court which entertained and directed the proceedings referred to therein, nor the regularity nor their sufficiency; (2) if every fact stated in the complaint were true, it would not give the plaintiff any cause of action; and (3) there is no averment of fraud or collusion, imposition, mistake, or any other ground of equitable jurisdiction. The motion was denied, and the defendants excepted. It appeared upon the trial that on the 27th of February, 1895, the defen lant Holmes B. Stevens, as general guardian, presented a verified petition at a special term of this court held in the city of Rochester, by which it appeared that the plaintiff at that time was an infant of 10 years of age; that he was residing with his mother in Rochester, although they were then sojourning in Paris, France, for his better-education; that on the 6th day of November, 1890, he (Stevens) had been appointed such general guardian by the surrogate of Monroe county; that Edward K. Warren was the paternal grandfather of the plaintiff, had carried on the brewery business upon a portion of the plaintiff's prem ises, and had died prior to May, 1888, leaving Harriet M. Warren his widow, and Edward C. Warren his son and only heir at law, and leaving a will by which he devised and bequeathed his property, real and personal, to his wife during her life, or until she should marry again, with remainder to the plaintiff. appointing his wife the sole executrix of his will, with power to sell his real estate for such prices as should be approved of by her and by Hiram L. Barker, of Rochester; that on the 10th of June, 1888, the widow, with the consent of Barker, conveyed by deed to Edward C. Warren, the father of the plaintiff, the brewery property for the sum of $38,000, subject to a mortgage of $37.000 held by the Rochester Savings Bank, and took security for the payment of the amount that Edward C. was to pay for the property in a mortgage upon the property, and in a few days thereafter the widow sold to her son Edward C. the personal property used in connection with the brewery for $15,000, and took his notes therefor; that in 1890 the widow died, and the petitioner was duly appointed administrator with the will annexed of the estate of Edward K. Warren, who at the time of his death was the owner in fee of the real estate covered by the mortgage in controversy; that, upon a sale of the brewery property to the son Edward C. Warren, he entered into possession of the property, and conducted the business of manufacturing ales and porter; that Edward C. mis managed the business; that the petitioner brought an action against Edward C. Warren in the supreme court, as guardian ad litem for Haskell B. Warren (the plaintiff), to set aside the deed of the brewery premises, and the transfer of the personal property to Edward C. Warren, upon the ground that the sale to him was for a grossly inadequate consideration, and by collusion with his mother. with intent to deprive the plaintiff, Haskell B. Warren, of more than $100,000 of the value of the property; that that action was settled, Edward C. Warren transferring the personal property to the petitioner as administrator, which was substantially all the personal property belonging to the brewery property. including books of account, and the said Edward C. Warren also, in conjunction with his wife, by deed conveyed the brewery real estate to the plaintiff'; that Edward C. received, as a consideration for these transfers, the sum of $8,000, which was paid to him out of the proceeds of certain mortgages upon plaintiff's real estate that had been executed under the authority and direction of the county court of Monroe county; that thereafter, and in November, 1891, the petitioner, as administrator, had a final accounting before the surrogate of Monroe county, and that court made an order settling his accounts, and directed that all the property in his hands as such administrator be turned over to the petitioner as the general guardian of the plaintiff. The petition then sets forth the real estate and personal property of the infant; the incumbrances upon the real estate; the income from the real estate. The value of the real estate is stated at $198,000. The incumbrances by mortgage were $65,000, besides some accrued and unpaid taxes. The personal property, consisting of a bond and mortgage, household furniture, and notes due the brewery company, amounted to $3,143.03, and, in addition to that, the boiler, engine, piping, connections, etc., of the brewery and malt house, were called personal property, and valued at $6,229.99. Upon the settlement with Edward C. Warren, the petitioner went into possession of the brewery in 1891, and continued in possession and carried on the business until the 1st day of July, 1893, at which time the personal property used in the brewery business, including the good will of the concern, was sold to a corporation known as the "E. K. Warren Brewing Company." under the order and direction of the supreme court, and the petitioner received in exchange therefor $23,000 in the full-paid stock of the corporation; and the personal property, and the income of the real property, were insufficient to pay his debts; and the petition proceeds: "That, at the time of the transfer of the said brewery business to your petitioner by said Edward C. Warren, the estate and business were largely involved and very heavily in debt: that said business was conducted by your petitioner until the 1st day of July, 1893, when the same was sold and transferred to the E. K. Warren Brewery Company, as hereinbefore stated; that upon said sale no money was received by your petitioner, but the entire purchase price of said business was paid in the stock of the said E. K. Warren Brewery Company; that said stock was not, and is not now, salable, nor could your petitioner realize any money upon it; that the estate and business was at the time of such sale largely in debt, and it became necessary to raise a large sum of money to pay said debt; that your petitioner borrowed from the Union Bank of Rochester at divers times sums of money, aggregating about $24.500, for which loans he gave his promissory notes as guardian of said infant; that said Union Bank of Rochester has ever since carried said loans, and renewed said notes from time to time; that said Union Bank is now impatient for the payment of said obligation, and threatens to sue the same unless paid; that there are no other debts due from the estate except several small amounts, aggregating about one thousand dollars, a list of which is hereto attached; also certain back taxes, both city and county, which are unpaid; that no dividend has been paid upon the stock of the E. K. Warren Brewery Company held by said infant; ** that the infant has no debts or income except as aforesaid; that the interests of said infant will be substantially promoted by paying the debt of the Union Bank of Rochester, for. unless paid, the said bank will commence suit upon its said notes, and the said property of the said infant, both real and personal, will be sold and sacrificed to pay any judgment obtained by the Union Bank against the said infant in said action; that the income of said infant from said property is not sufficient to pay said indebtedness; * * that Henry G. Danforth, residing at 535 West avenue, in said city of Rochester, who is not related to said infant in any manner, and who is a competent and suitable person to be appointed a special guardian for the purpose of making said mortgage, is willing to give security as such guardian by such a bond as the court may require [naming the sureties].' The petition prayed that the real estate of the plaintiff be mortgaged for the payment of the debt due to the Union Bank. Upon the filing of this petition the supreme court made an order that Mr. Henry G. Danforth, upon filing with the clerk of the court the bond as required by law in the sum of $50,000, with at least two sufficient sureties, freeholders of the state, who should justify, etc., he appointed special guardian with respect to the proceedings. The bond was filed and certified. Report was made to the court, and the court referred the matters set forth in the petition to a referee to inquire into the merits of the application; examine into the truths of the allegations; to hear the allegations and proofs of all persons interested in the property, or otherwise interested in the application; and report his opinion thereon, together with the testimony, with all convenient speed. The subsequent proceedings as to the reference, the and 85 New York State Reporter. report of the referee, and the taking of testimony before the referee covering all the matters stated in the petition, were in conformity with the provisions of Code, §§ 2348-2357; as, indeed, were all the subsequent proceedings, resulting in the execution of the mortgage upon the plaintiff's real estate to secure the debt of the Union Bank, unless it may be in regard to the agreement entered into between the special guardian and Gilman H. Perkins, the purchaser; and as to that the special guardian reported that he had entered into an oral agree ment with Perkins, subject to the approval of the court, for mortgaging the property for the sum of $25,000, payable in a year, with interest at 6 per cent., etc., with conditions as to insurance. This agreement was approved by the court, as was also the report of the referee, and, upon the sale of the premises, the court directed the execution of the mortgage. The special guardian executed and delivered the mortgage, and made his report to the court, which was duly confirmed and approved. Upon the trial of this action it appeared, from the testimony given by the defendant Stevens and others, that after Stevens had obtained possession of the property in September, 1891, he conducted the business as it had been formerly carried on; that from the time it came into his hands he made efforts to sell or lease the property, and that he sold it as soon as he had an opportunity; that it was essential to the preservation of the brewery business, and for the protection of the interests of the infant, to carry on the business; that it was necessary to operate the real and personal property of the brewery together, in order to obtain income from the real and personal property, and to preserve the good will of the business; and that all the money obtained from the Union Bank was used necessarily in that business. The court, in its findings upon this trial, found the facts substantially as set forth in the petition, and that the money obtained from the Union Bank was used in the brewery business, and found as a matter of law that the indebtedness represented by the note held by the Union Bank was the personal indebtedness of the defendant Stevens, and not an indebtedness of the plaintiff, Haskell B. Warren. He also found as a fact that Henry G. Danforth, at the time that he was appointed special guardian, was the attorney for the defendant the Union Bank. The trial court also held that the mortgage was void, and the assignment of it to the bank was void, and declared all proceedings had and orders made resulting in the execution of the mortgage void, and that the mortgage and the assignment thereof should be canceled, upon which decision judgment was rendered for the plaintiff. Argued before HARDIN, P. J., and FOLLETT, ADAMS, GREEN, and WARD, JJ. George F. Danforth, for appellants. WARD, J. An elaborate statement of facts seemed to be neces sary to fully present the interesting and important question which we must consider upon this review. The judgment appealed from assumes in a collateral proceeding, in an independent, original action, to overturn and declare void the acts and decisions, orders, and determination of the supreme court in a proceeding for the sale of infant's real estate, and we must consider under what circumstances this may be done. The supreme court has no inherent jurisdiction to direct the sale of an infant's real estate, but its jurisdiction rests upon the statute. Code Civ. Proc. §§ 2348-2364, inclusive; Losey v. Stanley, 147 N. Y. 570, 42 N. E. 8, and cases cited. The proceedings assailed in this case show that the petition upon which they are based gave the court jurisdiction. It was framed under section 2348 of the Code, which provides that real property belonging to an infant may be mortgaged as prescribed in the following subdivisions: * "(1) Where the personal property and the income of the real property of the infant * * are together insufficient for the payment of his debts, or for the maintenance and necessary education of himself and of his family. (2) Where the interest of the infant require or will be substantially promoted by such disposition on account of the real property be exposed to waste or dilapidation or being wholly unproductive, or for the purpose of raising funds to preserve or improve the same, or for other peculiar reasons or on account of other peculiar circumstances." * * By section 2349, the application shall be made by a petition of a general guardian, or the guardian of the property of the infant, and, if the infant is of the age of 14 years, he must join in the petition. That jurisdiction given by this petition is not questioned upon this appeal, nor was it upon the trial, by the learned trial judge, who states in his opinion that the petition did give jurisdiction; but it is claimed by the learned counsel for the respondent that matters subsequent to the petition invalidated the proceedings, and that fraud was established sufficient to justify the action of the trial court in this case. It is claimed that the proceedings were void because Danforth was the attorney for the bank at the time that he was appointed special guardian. It is not claimed that any act or omission of his was detrimental to the plaintiff in the proceedings to mortgage the real estate, or that he is not responsible, or that his bond was insufficient, or that in the particular matter in which he acted as such guardian he acted in the double capacity of special guardian and attorney for the bank. The fair inference from the finding of the court is that he was generally the attorney for the bank, and fraud on his part will not be presumed from the bare statement that he was such attorney, and, while such an appointment was perhaps unwise and subject to criticism, it was not sufficient to oust the court of jurisdiction. In Battell v. Torrey, 65 N. Y. 296, the grandfather of the infant peti tioned for the appointment of himself as the special guardian for the infant, for the purpose of selling or mortgaging the infant's land, who was also, as he claimed, the creditor of the infant, and his claim against the estate of the infant grew out of advances made and liabilities incurred by him, not as a guardian, or by any authority whatever, but as a volunteer in defending a litigation over the estate of the infant, and the sale or mortgage was asked for to pay for such advances. This state of facts was urged as a reason for vitiating the proceeding, but the court said that, while this "state of things requires the exercise of uncommon care on the part of the court in supervising the proceeding," it did not raise a jurisdictional question; that the court in that regard acted judicially, and, if it decided erroneously or made a mistake as to any other matter submitted to its consideration not involving its jurisdiction to do or omit to do or authorized to be done, cannot be questioned except by appeal, or in a direct proceeding to set aside or vacate what has been erroneously done. Section 2360 of the Code provides that from the time of the filing of the petition "the infant is considered a ward of the court with respect to the real property or interest and the income and proceeds thereof." So that the court exercises constant supervision over every step in the proceeding. Through its own officer it takes the proof, and 85 New York State Reporter. and, if a case is made out by competent proof, the special guardian is directed to contract; that contract is submitted to the court, under the oath of the guardian, which the court must approve, and direct a conveyance. The proceedings are not then ended. When a conveyance is made, either by deed or mortgage, a final report is made to the court, and the sale must be confirmed. The proceedings are also objected to because the report of the contract made by the special guardian, and under oath, establishes that the contract made by the purchaser was an oral one; and we are cited to the case of Hardie v. Andrews, 13 Civ. Proc. 413-417 (a special term decision), in which the court intimated that under section 2356, Code Civ. Proc., the agreement should be in writing, although it was not necessary under the Revised Statutes that it should be, and, as the proceeding that the court was then considering was under the Revised Statutes, the intimation referred to, while entitled to great respect, was obiter; but the court did not hold there that a verbal contract, consummated by a conveyance, and all of the provisions of the contract carried out through the orders of the court, would avoid the proceedings or devest the court of jurisdiction, and we regard it as a mere irregularity. But collusion is charged between the officers of the bank and the general guardian, and that it was substantially agreed in advance that the proceedings were to be taken to mortgage the plaintiff's real estate for the payment of the debt of the bank. the claim being that there was no valid debt against the plaintiff, but that it was against the guardian, the defendant Stevens, individually; but bad faith is not charged, and the fraud that will devest jurisdiction could not exist without it. The learned counsel for the respondent in his able brief makes this statement: . "In discussing the question whether the necessary result of the facts alleged in the complaint, and proved or admitted upon the trial, was to work a grave injustice and culpable fraud upon the infant, it is unnecessary for the plaintiff's counsel to charge the general guardian or the officers of the bank or any of the persons connected with the proceeding in question with any sinister purpose or actual fraudulent intent. It may well be, and judging from their reputation probably is, the fact that all fully believed that the infant actually owed the debt, and they were actuated by no other purpose than to secure the bank for . a debt which it manifestly believed the infant owed." The question was fairly before the supreme court, when the proceedings to mortgage the real estate were considered and disposed of, whether this charge of collusion was true, and whether the bank had not a just and equitable claim upon the plaintiff and his property that could be enforced in that proceeding under the broad grant of power given to the court by section 2348 of the Code. There was no dispute but what the bank advanced the money to the guardian, or that the guardian used it in the business and concerning the property of the plaintiff, or that the guardian kept it separate from his own, or that the parties believed that the best interests of the infant were subserved by the transaction. We must remember that these transactions occurred at a time of great business depression, when very little property was being operated at a profit; when the infant was too young to be consulted; when he was actually living in a foreign |