The plaintiff in this action seeks to foreclose two mortgages, alleged to have been given as security for the same debt. The first mortgage was executed by the adult owners of certain undivided interests in a tract of land, and as to that there is no controversy. The second mortgage purports to have been executed by the guardian of five minor children, who were owners of the remaining undivided interests in the same tract. By the decree of the superior court the first mortgage was foreclosed, but as to the second the plaintiff was nonsuited upon the ground that the order of court purporting to authorize it was void. From this portion of the decree the plaintiff has appealed, and the principal question to be determined is to the correctness of the ruling of the superior court sustaining the objection of the *Page 259 respondents to the admission in evidence of the so-called guardian's mortgage, — an objection which was based upon the sole ground that the order of court purporting to authorize said mortgage was void for want of jurisdiction.
The law which empowers executors, administrators, and guardians, when duly authorized by order of court, to mortgage the estates of decedents, minors, and incompetents is embraced in sections 1577 and 1578 of the Code of Civil Procedure, as orignally enacted in 1887 and as since amended. The proceedings involved in this inquiry, having been commenced subsequent to March 3, 1893, are governed by the law as amended at that date (Stats. 1893, p. 72), and the question is, whether, upon the face of the record, it appears that the substantial requirements of the statute were complied with in procuring the order empowering the guardian to execute this mortgage.
The steps to be taken by a guardian to obtain such an order are prescribed by section 1578 of the Code of Civil Procedure, the first of which is that he must file a petition showing, —
1. "The particular purpose or purposes for which it is proposed to make the note or notes and mortgage, which shall be either to pay the debts, legacies, or charges of administration, or to pay, reduce, extend, or renew some lien or mortgage already subsisting in said realty, or some part thereof;
2. "A statement of the debts, legacies, charges of administration, liens, or mortgages to be paid, reduced, extended, or renewed, as the case may be;
3. "The advantage that may accrue to the estate from raising the required money by note or notes and mortgage, or providing for the payment, reduction, extension, or renewal of the subsisting liens or mortgages, as the case may be;
4. "The amount to be raised, with a general description of the property proposed to be mortgaged; and
5. "The names of the legatees and devisees, if any, and of the heirs of the deceased, or of the minor, or of the incompetent person, as the case may be, so far as known to the petitioner."
The filing of such petition is to be followed by an order of the court directing all persons interested to appear, and show cause, if any they can, why authority to mortgage should not be granted, and by a hearing at the time designated. If, upon a full hearing, the court is satisfied that it will be for the advantage of the estate, an order empowering *Page 260 and directing the guardian to execute the mortgage is made. From this it appears that the foundation of jurisdiction in cases of this sort is the petition filed by the guardian for leave to mortgage, and therefore the first thing to be considered is the sufficiency of the petition for the order here in question. It was filed April 3, 1893, by the mother of the respondents, and showed that her husband, Isaac Bryan, had died in October, 1885, leaving a will, by which she was appointed executrix and guardian of the minor children; that she had administered the estate, but had never legally qualified as guardian until March, 27, 1893, at which time she became the duly qualified guardian of the five youngest children (the respondents here); that the estate of her husband, which consisted exclusively of the land described in these mortgages, was community property, and had been distributed, — one half to her in fee, as her community share, and the other half in accordance with the provisions of the will, to her for life, with remainder to the children, in equal shares, — that is to say, each of the ten children took one undivided twentieth of the land, subject to her life estate; that from the death of her husband she continued to reside on the land with her children, and supported and educated the minors.
The petition further showed that at the time of his death Isaac Bryan owed two thousand five hundred dollars, secured by a mortgage on said tract of land; that the petitioner had been without any means of support for herself or children, except the income from the land; that the rents had not exceeded six hundred dollars per annum, — a sum wholly insufficient for the support of herself and her minor children; that to pay off the said debt of two thousand five hundred dollars, secured as aforesaid, and to pay debts incurred for the support of herself and children, she had borrowed four thousand five hundred dollars from M.A. Howard (the plaintiff herein), as security for which she had mortgaged her interest in said land; that she had subsequently borrowed from Howard six hundred dollars more, which had been advanced without security, and had been used for the support of herself and these minors; that said sums, together with interest, amounting in all to more than six thousand dollars, were due and unpaid, and that her wards were indebted to her in the sum of five thousand dollars, which she had expended *Page 261 between November, 1885, and March, 1893, for their support and education.
The petition further alleged that the future expenses of administration, including support of the minors, costs, commissions, and counsel fees, would amount to $4,750.
It was further shown that the interest of the petitioner and one of her adult children in the land had been sold under execution, and a sheriff's deed delivered to one Rider; that he was threatening to and would oust her from possession and claim a partition of the land if she failed to pay him $2,150, for which sum he had agreed to reconvey; that Howard was also threatening to foreclose; that one Dalton had agreed to lend her $10,000 with which to satisfy Howard's and Rider's claims, provided she obtained authority to mortgage the interest of the minors, in conjunction with a new mortgage to be given by herself and her adult children upon their interest in the land; that unless this agreement could be carried out, costly and expensive litigation would ensue, disastrous to the interests of the minors and herself.
Upon these allegations, and others not requiring particular statement, leave was asked to include the interest of the minors in a new mortgage for ten thousand dollars.
Upon the filing of this petition, and upon proper orders and notice to all parties concerned, a hearing was had, and upon a finding that all the allegations of the petition were true, an order was made, empowering the guardian to execute a mortgage of the interest of the minors, in conjunction with a similar mortgage of the interests of the guardian and adult children, for nine thousand five hundred dollars. Both mortgages were accordingly executed to Dalton, who afterwards assigned them to the plaintiff, Howard.
The judgment of nonsuit as to the guardian's mortgage followed inevitably from the ruling of the superior court sustaining the objection of the respondents to the admission of that mortgage when it was offered in evidence. If it was properly excluded, there was no evidence in the case upon which to base any judgment against the minors, or their interest in the land. The points made by the appellant to the effect that, irrespective of the validity of the mortgage, the judgment is erroneous because, — 1. The respondents were estopped to deny its validity; because, 2. It was good as an *Page 262 equitable mortgage; and because, 3. Plaintiff was, in any event, entitled to a judgment for the money loaned — have nothing to sustain them in the record. There was neither allegation nor proof or offer of proof of any of the facts constituting the supposed estoppel. It is true that the complaint contains a general averment that Ellen Bryan, as guardian of said minors, borrowed from plaintiff's assignor nine thousand five hundred dollars for their benefit, but it is not alleged that she expended any portion of it for their benefit, and the allegation actually made is denied in the answer. The finding of the court that all the allegations of the complaint are true was made after the order of nonsuit had been granted, when the respondents were out of the case, and cannot bind them. At the time the nonsuit was granted, no evidence had been offered which would have sustained a finding of the facts relied upon as an estoppel, or as constituting an equitable mortgage of the minor's interest in the land. As to the contention that the plaintiff was entitled to a judgment for the full amount of his loan, it is only necessary to say that he got such a judgment against the only party upon whom a personal liability rests — viz., Mrs. Baker, formerly Bryan. The full amount due plaintiff is ascertained by the judgment foreclosing the first mortgage, and if that is not realized by a sale of the interests of the adult mortgagors, he is to have a personal judgment against Mrs. Baker for the deficiency. If there were any grounds upon which he might have claimed a personal judgment against the respondents, there was no proof of such grounds, or offer of proof, except by the guardian's mortgage; and if that was properly excluded upon the objection of the respondents, there could be no judgment against them, any more than there could be a foreclosure of the mortgage.
These questions being disposed of, there remains but one: Wasthe guardian's mortgage valid? or, more specifically, Was therea valid order authorizing the mortgage?
This being a collateral attack upon the order, only those facts and matters appearing upon the face of the record are to be considered; and if they show no excess or defect of jurisdiction, no mere error of the court in the exercise of its jurisdiction, or irregularity in the proceeding, will invalidate the order. And in examining the record the same presumptions are indulged in favor of the regularity and validity of the proceeding as those which govern the construction of the *Page 263 record in an ordinary action. (Burris v. Kennedy, 108 Cal. 338.)
Keeping this proposition in view, the first question is, Did the petition comply with the substantial requirements of the statute?
The essential fact to be found by the court as the basis of its order is, that it will be for the advantage of the estate to raise money by a loan, and the statute prescribes the matters which must be set forth in the petition as a basis for the judgment of the court.
The first requisite of the petition is, that it must disclose the particular purpose for which the money is to be used; and in case of a minor's estate, that purpose must be either to pay debts or charges of administration, or to pay, reduce, extend, or renew some lien or mortgage already subsisting on the realty which it is proposed to mortgage.
The petition in this case does not show the existence of any lien or mortgage on the interest of either of these minors. It shows that there had at one time existed a lien on the entire property for two thousand five hundred dollars, but, of course, a very small proportion of this ever attached to the five twentieths owned by these minors, subject to the life estate of their mother, and whatever it may have amounted to in the beginning, it had been fully discharged. The voluntary assumption and payment of this debt by their mother put an end to their obligation.
The petition did contain an estimate of future charges of administration, but it clearly showed that there was no purpose to apply the money borrowed to the payment of such charges, except as to the surplus that might remain after satisfying the claims of Howard and Rider, amounting to over eight thousand two hundred dollars. This sum was, at all events, to be laid out, in the first place, for the discharge of obligations in which the minors were in no manner concerned. It is true that an indebtedness of five thousand dollars from the minors to their mother for expenses incurred by her for their support and education prior to her qualification as legal guardian is alleged in the petition, but, waiving the various objections to this item insisted upon by respondents, it is, after all, more than three thousand dollars less than the amount to be paid to Rider and Howard. It appears, therefore, conclusively from the petition, and is apparent on the face of the record, that the particular *Page 264 purpose of this proceeding was to enable the guardian to borrow money, not for the exclusive use and benefit of her wards, but largely for her own benefit, — to pay her debts, and to discharge liens resting exclusively upon her estate. All that the petition alleges, the order affirms; and what the petition prays, the order grants. Whatever, infirmity, therefore, appears in the petition attaches to the order, and the question is, whether, under this statute, a court may empower a guardian to mortgage his ward's estate to raise money for his own purposes. If the case was plainly and simply of this aspect — if, in other words, the petition had shown in plain terms that the estate of the ward was to be mortgaged to pay a debt of the guardian, — no court could have hesitated to say that the order to mortgage was void. But the case is different. The petition alleges an indebtedness of the minors, amounting to five thousand dollars, and although the amount of the loan was nine thousand five hundred dollars, it was to be secured by a mortgage not only of the one-fourth interest of the minors in the remainder, but also by a mortgage of the guardian's life estate and of the remaining three fourths of the fee, — the minors, that is to say, who were to have more than one half of the benefit of the loan were to furnish less than one fourth of the security This, it may justly be claimed, made the transaction perfectly fair, and even generous to the minors, but we think it was nevertheless in excess of the powers of the court.
The law cannot be construed to authorize the mortgage of a minor's estate to pay any debt but his own. It must be such a mortgage as he can discharge by paying what he is individually bound for, and such as will admit of a redemption by the payment of that which is due from him on his own account.
In this case the power of the court was exceeded, not only in attempting to mortgage the interest of the five minors to secure a sum in excess of their aggregate indebtedness, but also in the attempt to mortgage their separate interests for their aggregate debt. However advantageous it may have seemed in this instance to pursue that course, the proceeding cannot be sustained without establishing a dangerous precedent, from which serious abuses would be certain to flow.
One proposition maintained by appellant remains to be noticed: He contends that no petition whatever was necessary in order to invest the court with jurisdiction to authorize *Page 265 the mortgage, — a contention based upon the following language found in subdivision 6 of section 1578 of the Code of Civil Procedure: "Jurisdiction of the court to administer the estate of such decedent, minor, or incompetent person shall be effectual to vest such court and judge with jurisdiction to make the order for the note or notes and mortgage, and such jurisdiction shall conclusively inure to the benefit of the mortgagees," etc.
It is a little difficult, certainly, to give a reasonable construction to this language, but we think it would be most unreasonable to hold that it was intended to dispense with the verified petition which the first clause of the same section says shall be filed. The two provisions must be harmonized, if possible, so that both may have effect; and this may be done by supposing that the clause quoted was inserted out of abundant caution, for the purpose of designating the particular superior court to which the petition to mortgage must be addressed, irrespective of situs of the land to be mortgaged. We are satisfied, at all events, that a verified petition in substantial conformity to the statute must be filed in order to give the court jurisdiction to proceed. The omission to file it would be more than an irregularity.
It has been suggested, in support of the view that the court has power to authorize a mortgage without a petition or any of the proceedings prescribed by the statute, that no harm can result to the minor, however unnecessarily or excessively his estate is encumbered, because, it is said, the guardian will be chargeable with the whole sum borrowed, and for any misappropriation will be liable on his bond.
We think this would be a very inadequate protection to the minor, even if there were a bond with sureties sufficient to answer his demand. But no bond is required as a condition to the making of the mortgage, and the bond given by a guardian in qualifying as such does not necessarily or usually cover the value of the ward's real property. It would be an accident if in any case there was a sufficient bond to indemnify the ward for a misappropriation of money borrowed upon the security of his real property. In this case there is no evidence of the existence of such a bond.
The judgment of the superior court is affirmed.
Temple, J., and Van Dyke, J., concurred.
*Page 266McFarland, J., dissented.