Opinion ID: 1191499
Heading Depth: 1
Heading Rank: 3

Heading: Lien or right of third person.

Text: Bank alternatively contends that ORS 88.120 was intended to protect only those third parties who acquired their interest in reliance on the conclusive presumption of payment provided by ORS 88.110. Under Bank's theory, Rathbone would not be entitled to raise ORS 88.110 as a defense because he acquired his interest before the expiration of the ten-year limitation period. Bank relies on Day v. Celoria, 116 Or. 250, 241 P. 58 (1925), and Force v. Heusner, 142 Or. 280, 18 P.2d 583 (1933). Bank's reliance on these two cases is understandable. In Day v. Celoria , this court interpreted an earlier version of ORS 88.120, which provided: Nothing in this act contained shall be construed to bar the foreclosure of any such mortgage, nor shall said act or any portion thereof be plead or considered as a defense to any such foreclosure, if within ten years immediately preceding the commencement of the suit to foreclose there shall have been voluntarily paid any portion of the debt secured by the mortgage, or any interest thereon; provided, that the premises covered by such mortgage are still owned by the original mortgagor and are unaffected by any lien or liens, or rights of third parties which may have attached or intervened, subsequent to the expiration of the ten year period in Section 9887 described. Oregon Laws, section 9890 (1920). This court held that the plaintiff could maintain a foreclosure action, even though the ten year limitation period had expired and the original mortgagor no longer owned the property. The court construed the statute as follows: Two conditions must exist to prevent tolling the statute by payment of interest, viz.: (a) The title to the land must be vested in some one other than the original mortgagor, and, (b) the interest of the holder of that title must have attached subsequent to the expiration of the ten-year period from the maturity of the debt secured. But the interest of the defendant Celoria attached prior, not subsequently, to the expiration of the ten-year period after maturity of the note secured by the mortgage. Defendant Celoria's interest attached December 2, 1920. The ten-year period expired on the tenth day of February in 1921. The payments of interest, therefore, tolled the statute according to the plain terms of the statute. Day v. Celoria, supra, 116 Or. at 252, 241 P. 58 (emphasis added). In Force v. Heusner, this court relied on Day v. Celoria for the proposition that a third party cannot maintain the defense of the Statute of Limitations unless the lien or interest attaches `subsequent to the expiration of the ten-year period.' Force v. Heusner, supra, 142 Or. at 284, 18 P.2d 583. While the Day and Force reading of ORS 88.120 was not the only one possible from the language of the statute alone, we think those cases were consistent with the most obvious purpose of the statute. The enactment of ORS 88.120 served two complementary purposes: (1) to protect mortgagees who may have been lulled into a false sense of security by receiving continuing mortgage payments and (2) to limit the protection of ORS 88.110 to a third person whose lien or right attached subsequent 10 years after the maturity date of the prior mortgage lien, Force v. Heusner, supra, 144 Or. at 283, 18 P.2d 583, or, otherwise stated, to remove the conclusive presumption imposed by [ORS 88.110] when payments had been made within ten years of suit, saving it only for the liens or rights acquired by third parties justifiably relying on the presumption. Note, Mortgages  Statute of Limitations, 12 Or.L. Rev. 343, 345-46 (1933). Consistent with this purpose, this court has refused to extend the protection of ORS 88.110 to a subsequent purchaser as against a prior mortgagee where the mortgagor has made payments to the mortgagee within ten years of the foreclosure action and the purchaser's interest arose less than ten years from the date of maturity. See Day v. Celoria, supra, 116 Or. at 252, 241 P. 58; Force v. Heusner, supra, 142 Or. at 284, 18 P.2d 583 (a third party cannot maintain the defense of the Statute of Limitations unless the lien or interest attaches `subsequent to the expiration of the ten-year period'); see also Zanietta v. McCulloch, 130 Or. 396, 399, 280 P.2d 328 (1929) (third party's interest arose 10 years after mortgage maturity date; [f]or that reason,    plaintiff's mortgage,    as against the [third party's] mortgage, or against any liens or rights of third parties attaching subsequent to [the 10 year post-maturity date], has ceased to exist). One might conclude, however, that the waters in this regard have been somewhat muddied by certain dicta in the later cases Richey Loan Co. v. Cheldelin, 148 Or. 170, 34 P.2d 646 (1934) and Tuthill v. Stoehr, 163 Or. 461, 98 P.2d 8 (1940). In Richey Loan and Tuthill, however, the court was not confronted with a difficult case where giving a third party the protection of ORS 88.110 would do violence to the intent of ORS 88.110 and 88.120. In both cases, the person claiming the benefit of what is now ORS 88.120 had assumed and agreed to pay the mortgage. See Richey Loan, 148 Or. at 176, 34 P.2d 646 (case was take[n]   out of the statute because defendant's agreement    to pay these mortgages, being based upon a valuable consideration accruing to her constituted a binding agreement on the part of the defendant to pay the notes secured by the mortgages.); Tuthill, 163 Or. at 474-75, 98 P.2d 8 (assumption of mortgage by third party takes case out of the statute). Bank is correct in arguing that, nothwithstanding Richey Loan and Tuthill, this court has never protected a third party interest from foreclosure that attached within the post-maturity 10 years. As to the meaning of ORS 88.120(3), see also Note, 12 Or.L.Rev. supra, at 343-44, where it is stated: A brief survey of the history and purposes of sections 54-111, 54-112 [both now codified at ORS 88.110], and 54-114 [now codified at ORS 88.120] seems a necessary preliminary to any consideration of these statutes and interpretative Oregon cases. To remove the uncertainty attendant to the status of titles whose records for many years indicated an unsatisfied mortgage, sections 54-111 and 54-112 were enacted by the legislature in 1913. In brief these two statutes provided for a conclusive presumption of payment, satisfaction, and discharge to arise upon the expiration of a ten year period succeeding the date of the maturity of the obligation secured by the recorded mortgage or from the maturity date of any extension agreement of record. This state of the law made it possible for many innocent mortgagees to be lulled into inactivity by payments made to them by scheming mortgagors, who upon the expiration of the ten year period at once invoked the conclusive presumption. This situation probably led to the enactment of section 54-114 in 1917. Briefly, this statute removed the presumption where any payment of principal or interest had been made within the ten years immediately preceding commencement of the foreclosure suit. But in recognition of the true principle underlying sections 54-111 and 54-112, the statute protected a third party who had acquired a lien or right subsequent to the ten year period succeeding the maturity date of the prior mortgage lien. The reason for the provision giving priority to the subsequent owner of a lien or rights over the prior lien is apparent; this third party should be able to rely on the record which showed the bar of the statute of limitations against the first mortgage.    We adhere to our decisions in Day and Force. No person whose interest arises before the 10-year period expires can invoke ORS 88.110 if requirements (1) and (2) of ORS 88.120 are also made out. Even if we would be inclined, as a matter of first impression, to read ORS 88.120 differently now, this is not a matter of first impression. We have recently stated: When this court interprets a statute, the interpretation becomes `a part of the statute as if written into it at the time of its enactment.' State of Oregon v. Elliott, 204 Or 460, 465, 277 P2d 754, cert. den, 349 US 929, 75 S Ct 772, 99 L Ed 1260 (1955). If, in interpreting a statute, we make a mistake or proceed on a course which offends the legislature, that body can rectify our action.    [W]e leave it to the legislature whether there should be change. State v. White, 303 Or. 333, 348, 736 P.2d 552 (1987). See also Broyles v. Estate of Brown, 295 Or. 795, 804, 671 P.2d 94 (1983) (Lent, J., dissenting) (when the court errs in construing a statute    correction should be made by the legislative department of government), quoted in State v. Owens, 302 Or. 196, 209, 729 P.2d 524 (1986) (Gillette, J., concurring); State v. Newton, 291 Or. 788, 815, 636 P.2d 393 (1981) (Lent J., dissenting, to same effect as quoted Broyles statement). The White rationalization of stare decisis is particularly pertinent in the context of property law. In law, especially when property rights are at stake, consistency, that is, adherence to precedent, is a greater virtue than strict logic. Dorsey v. Tisby, 192 Or. 163, 180, 234 P.2d 557 (1951). The Day-Zanietta-Force rule requiring third party interests to attach more than ten years after the mortgage's maturity as a prerequisite to the protection of ORS 88.110 dates back 62 years. Parties in situations comparable to that of Rathbone have never successfully invoked ORS 88.110 or its predecessors. No decision of this court has ever disputed the Force rationale that, in 1917, [ORS 88.120] was enacted to protect the rights of mortgagees [who have received mortgage payments within the relevant ten year period] and those of third parties whose liens attached subsequent to the expiration of the ten-year period. 142 Or. at 283, 18 P.2d 583. This is not the time to start. Rathbone, having acquired his interest prior to the expiration of the 10-year statutory period, was not entitled to the benefit of ORS 88.110. The Court of Appeals conclusion to the contrary was error. [2] The decision of the Court of Appeals is reversed. The judgment of the trial court is affirmed.