Kernohan v. Manss et al. quality and quantity. Not only this, but if the grain became her property, which it would do if the transaction was a payment, it was thereafter at her risk, and entitled to her care. In this view alone it is only reasonable that she should be advised of it, that the care necessary for its preservation could be given by her. If the defendant neglected to cause the plaintiff to be notified that the oats had been placed in her granary, he failed to do that which was necessary to constitute the transaction a payment, and must abide the consequences. Judgment reversed and causes remanded for a new trial. KERNOHAN v. MANSS, ET AL. Mortgage security for promissory notes—Assignment of mortgage to secure forged notes-Subsequent sale by mortgagee of genuine note before maturity-On foreclosure, lien of holder of genuine note preferred to that of holder of mortgage. M. executed to eight persons, a mortgage to secure eight promissory notes, made to them respectively. The notes were delivered to the several mortgagees, and the mortgage to McG., one of the mortgagees. It was then duly recorded. After record, without objection by the others, McG. took possession of the mortgage and of three of the notes belonging to other mortgagees, for safe keeping. Afterward, and before maturity of any of the notes. McG., claiming to be the owner of the mortgage and of all the notes, for a valuable consideration, received of K., assigned and delivered to him the mortgage and forged copies of all of the notes, with forged indorsements on each, except that on the note purporting to be made to him the indorsement was genuine. The assignment purported, also, to transfer the notes secured by the mortgage. MeG. retained in his own possession the genuine notes. Afterward, but before the maturity of the note made to MeG., he, for a valuable consideration, indorsed and delivered the genuine Kernohan v. Manss et al. note to M. and M.. informing them that the note, with others, was secured by mortgage on certain real estate. Before taking the note, M. and M. had the records examined and found that the statements of McG. respecting the mortgage security were correct. He also stated that he, with the consent of the other mortgagees, was holding the original mortgage for himself, and as custodian for the others. They did not ask to see the original mortgage, and did not see it. K. and M. and M. acted in entire good faith, neither having a suspicion that a fraud was contemplated by McG. Held: On foreclosure of the mortgage, the debt to M. and M. is entitled to preference over that of K. (Decided June 11, 1895.) ERROR to the Circuit Court of Hamilton county. The action below was a proceeding in the probate court of Hamilton county for the sale of lands of Gano Martin, deceased, to pay debts, in which the plaintiff in error and the defendants in error were cross-petitioners, each claiming to hold a lien prior to that of the other upon the lands in question. That court found in favor of John and Louis Manss, from which Kernohan appealed. On the trial in the common pleas the following undisputed facts appeared, viz. : On January 1, 1879, Gano Martin, the then owner of the real estate sold in this action, being in feeble health, and desiring to make some sort of settlement of his estate before he died, providing as well for his children and widow as for certain creditors (amongst whom was one William R. McGill, to whom he was then indebted in the amount of $7,602.72), executed a mortgage deed covering his said real estate; the consideration named was $16.113.69; the grantees were said McGill and seven others. The mortgage was conditioned to secure payment of eight promissory notes, each dated the Kernohan v. Manss et al. January 1, 1879, payable five years after date, with 8 per cent. interest, payable annually, except one on which no interest was payable until after Gano Martin's death. The mortgage deed was then delivered to McGill, with the consent of the other mortgagees, he(McGill) stating he would put it in his safe for safe keeping. It was left for record January 20, 1879, with the recorder of Hamilton county, and duly recorded, and thereafter, without objection by the other mortgagees, remained in the possession of said McGill until delivered to said Kernohan, as hereinafter stated. The note for $7,602.72 was also delivered to McGill at the same time, and the notes to order of three other mortgagees were also delivered, unindorsed, to McGill, at the same time, for safe keeping. Some time afterwards, one of the mortgagees (George Martin) sold his note to William R. McGill, and, so far as appears, McGill never owned, or had any interest in any of the other notes. The note for $7,602.72 remained in the possession of McGill until delivered to John and Louis Manss, as hereinafter stated. On the 8th day of February, 1879, being prior to the maturity of the notes secured by said mortgage, Robert Kernohan made a loan of $11,000 to McGill, who, amongst other collateral, transferred and assigned to Kernohan the said mortgage, and what purported to be all the notes secured thereby. At the time of the transfer McGill was the owner and holder of the genuine note for $7,602.72, secured by said mortgage. This transfer was made in the following manner: Before the payment of the $11,000, McGill produced to Kernohan, and his attorney, the original mortgage deed from Gano Kernohan v. Manss et al. Martin, and the following assignment was indorsed thereon: "For value received, I hereby assign and transfer to Robert Kernohan, his representatives and assigns, the within mortgage and the notes secured thereby. "February 8, 1879. WILLIAM R. MCGILL." The assignment was then and there signed by William R. McGill. At the same time eight certain papers answering in form to the eight notes described in the mortgage, including one for $7,602.72, were produced by said McGill as the original genuine notes secured by said mortgage; the said papers were at the time they were produced, indorsed in blank with the name of the payees thereof, except that for $7,602.72, which was indorsed as hereafter stated. At the same time he signed the said assignment on the back of the mortgage, McGill indorsed each of said papers (including that for $7,602.72 drawn to his own order, which hitherto had been unindorsed), with his own signature, and the words "protest waived,” as appears thereon; and thereupon the said papers and mortgage were delivered to Kernohan, with the other collateral, and said sum of $11,000 paid. The mortgage so assigned and delivered was the genuine mortgage deed executed by Gano Martin and wife; but the papers purporting to be the notes secured thereby, and so delivered and indorsed by said McGill, are each and every one of them forgeries (except the indorsements of McGill thereon), though they were delivered to Kernohan by McGill as genuine. Kernohan received the mortgage, and what purported to be the real notes, as above, duly indorsed and delivered to him, in good faith and for Kernohan v. Manss et al. value, supposing said notes to be genuine, and they remained in his possession until after the death of McGill, which took place July 2, 1884, and until this action was begun. Kernohan did not know, or have any cause to know of such forgery, and that said notes were not genuine, until after the death of McGill. Interest on said loan of $11,000 was paid by McGill up to his death. The amounts realized from the other collateral, together with any amount that has been, or may be ordered, paid to him in this case, will not discharge said debt of $11,000. The estate of said Gano Martin is insoivent. The assignment on the mortgage was not left for record or entered until April 25, 1884. On or about April 1, 1879, being after the transaction with Kernohan, but prior to the maturity of said note for $7,602.72, the defendants, John and Lewis Manss, loaned William R. McGill the sum of $4,000, taking his note dated May 8, 1879, for same, McGill at that time transferring to them by indorsement and delivery, as collateral for said loan, the original genuine note for $7,602.72, made by Gano Martin, which notwithstanding his transaction with Kernohan, he had retained possession of. John and Louis Manss did not learn until a week or ten days after McGill's death of any other note purporting to be of the amount of the note so indorsed and delivered as collateral. At the time of the transaction between McGill and the Manss brothers, McGill stated that the note was secured by a mortgage; that it was given to secure other notes, to the other payees, and that he, by and with the consent of all the other mortgagees, was holding the mortgage for himself and as custodian for the |