Cary v. Metropolitan Ins. Co. , 141 Or. 388 ( 1932 )

I dissent from the decision of the majority for many reasons. First, it is illogical to hold that section 6-509, Oregon Code 1930, permits only one foreclosure of the lien, and then grant the mortgagee a foreclosure in this suit after it had already availed itself of a foreclosure in an earlier suit. It is true that the first foreclosure was for a portion of the debt only, but if the statute authorizes only one foreclosure of the mortgage lien the mortgagee has exhausted its remedy, even though it did not pray in the first suit for a judgment for the full amount of the debt.

Next, I know of nothing which has occurred in this state or the nation which justifies the majority to speak of "the evil of piecemeal foreclosures." No such evil has come to my notice. This is the day when borrowers are finding themselves burdened with the crushing weight of debts. Borrowers everywhere — the nation, the state, the city and the individual — are struggling for relief. The ever-increasing number of defaulted mortgages threatens thousands with the loss of their homes or other accumulations. The equity of redemption has failed us. It requires the borrower to pay his entire debt, together with the mortgagee's attorney's fee, costs, sheriff's fees, etc. To the harassed borrower who defaulted because he was unable to pay the overdue installments, the right to redeem by paying the whole debt, now expanded with incidental sums, is worthless. In their frantic efforts to save themselves from ruin and eviction, some borrowers have implored the chief executive to declare a moratorium against mortgage foreclosures; and a member of the state Senate of the Oregon Legislature has introduced into the present Legislative Assembly a bill (Senate Bill No. 1) authorizing such a moratorium in this state. Such being the circumstances, partial foreclosure, instead of being an evil, as declared by the majority, may be the salvation of mortgage borrowers. One who cannot raise sufficient funds to redeem from a foreclosure, wherein judgment has been given for the total debt, attorneys' fees and accumulating costs, may, however, under the spur of necessity, be able to obtain the smaller sum needed to reinstate his mortgage, if foreclosure is decreed for only the overdue installments. Apparently, the defendant, which is one of the most extensive investors in mortgages in this country, so believes. Since it is willing to experiment with such procedure, and since such procedure may be beneficial to the mortgage borrower, it would seem that no obstacles should be put in its way unless the law so demands. In the absence of statute, it is well established that a decree of partial foreclosure, which preserves the lien as security for the balance of the debt, is valid, and the mortgage lien remains effective as security for the nondue installments: Light v.Federal Land Bank, 177 Ark. 846 (7 S.W.2d 975 (1928)); MiamiMortgage Guaranty Co. v. Drawdy, 99 Fla. 1092 (127 So. 323);Burroughs v. Ellis, 76 Iowa 649 (38 N.W. 141); Hughes v.Frisby, 81 Ill. 188; Boyer v. Chandler, 160 Ill. 394 (43 N.E. 803, 32 L.R.A. 113); Crouse v. Holman, 19 Ind. 30, 36;Nebraska Loan Tr. Co. v. Domon, 4 Neb. 334 (93 N.W. 1022);Nebraska Loan Tr. Co. v. Haskell, 4 Neb. 330 (93 N.W. 1045);Dupee v. Salt Lake Valley Loan Tr. Co., 20 Utah 103 (57 P. 845, 77 Am. St. Rep. 902). The effect of the holdings is thus stated in 19 R.C.L., Mortgages, p. 565, section 375:

"Where principal and interest are due on a mortgage and the mortgage is foreclosed for the interest, but the decree preserves the mortgage lien as to the principal sum, a second foreclosure for the principal is not barred by the first foreclosure. Furthermore, where a mortgage is foreclosed before the whole debt is due, and the foreclosure decree directs a sale for the amount due, subject to a lien for the amount not due, the debt not due and the lien of the mortgagee remain in force, and the mortgagee may foreclose again as to the balance. * * *"

See also Jones on Mortgages (8th Ed.), section 1857; and Wiltsie on Mortgage Foreclosure (34), section 54.

But the majority believes that section 6-509, Oregon Code 1930, prohibits partial foreclosure. The courts have many times declared that a statute will not effect a change in the common law unless the language of the statute clearly indicates such a purpose. This is especially true when, to hold otherwise, would be to abrogate some wholesome provision of the common law. Citations are unnecessary, for the holdings are numerous. The majority proposes to eliminate partial foreclosures because the statute employs the word "shall." "Shall" has been many times construed to mean "may." In fact, in statutory construction the two words are interchangeable. If "may" is substituted for "shall" the statutory remedy is permissive and not exclusive. I am firmly convinced that section 6-509 affords a permissive, and not an exclusive, remedy. Hence, I dissent.