BEAN, J.
It appears from the record that Mrs. Elizabeth A. Smith still holds the promissory notes of the Hydraulic Mining Company for the $12,500 originally loaned by her, which are wholly unpaid. It is shown by the evidence that the interest thereon [95]*95is in arrears from 1915. It further appears that defendant, Elizabeth A. Smith, holds the title to the mining property of the Hydraulic Mining Company under the conveyance of March 28, 1902, renewed by deed of June 10, 1907, and she still holds an interest in the property conveyed by the trust deed which has been foreclosed, in lieu of $11,500 par value of the bonds of the Three Pines Timber Company, as additional security for the loan, in accordance with the terms and provisions of the instrument of defeasance dated and acknowledged on June 10, 1907.
Defendant, Elizabeth A. Smith, set forth in her answer and established by her testimony the facts, in substance, as herein set forth.
The Hydraulic Mining Company by its reply put in issue the allegations of the answer and set up five further and separate defenses to the matters alleged in defendant’s answer, using the language of plaintiff’s brief, as follows:
“First: The foreclosure proceeding, the stipulation and the decree, heretofore referred to.
“Second: That the defendant received the bonds and the note $2,039.75 in full satisfaction of the debt.
“Third: The statute of limitations as to the original debt, and the original conveyance of the mining-property.
“Fourth: The statute of limitations as to the second conveyance of the mining property.
“Fifth: That the debt was paid by the sale of the property upon execution and the subsequent payment of certain small amounts of money.”
The plaintiff, upon this appeal, submits that the following questions are involved in this suit, namely:
“1. The effect of the stipulation and decree exonerating the mining property from any claim upon the part of the defendant.
[96]*96“2. Conceding' that the original debt was not paid by the delivery of the bonds, was it not paid by the foreclosure and sale thereunder?
“3. Was the original debt, and a right of action upon the conveyance of the mining property, barred by the statute of limitations?
“4. Was the right of action upon the second conveyance of the mining property, barred by the statute of limitations?
“5. Were the bonds delivered to the defendant as collateral security, or in full payment of the debt?”
As to the plaintiff’s claim that the notes of defendant, Elizabeth A. Smith, were paid by the delivery of the $12,500 par value of the bonds of the Three Pines Timber Company, on or about June 10, 1907, it is sufficient to say that it is not borne out by the testimony. The evidence is overwhelmingly to the contrary. It shows that the bonds of the Three Pines Timber Company were taken by Mrs. Smith at the earnest solicitation of the two officers and owners of the plaintiff corporation, George E. Howland, president, and Jefferson D. Cook, secretary, in lieu of timber land to which she held the title as an additional security for the loan, in order that the Three Pines Timber Company might convey the land to a trustee and provide for the bond issue. At the time of the delivery of the timber company bonds to Mrs. Smith the plaintiff, by its officers, executed a memorandum which, after reciting the fact of the indebtedness to Mrs. Smith in the sum of $12,500 and the fact that the bonds of the Three Pines Timber Company had been delivered to Mrs. Smith, and the Hydraulic Mining Company had conveyed the mining property to Mrs. Smith, that she, the. said Elizabeth A. Smith, should reconvey unto the first party, the Hydraulic Mining Company, the said mining prop[97]*97erty when she should have been paid the full sum of $12,500 with interest at 8 per cent per annum from July 1, 1907, and reciting further that there should be paid to Elizabeth A. Smith the sum of $12,500, either by the retirement and liquidation of the bonds or from the sale of the mining premises, and in the event that the indebtedness should be paid from the mining property or the sale thereof, that thereupon the bonds should be delivered to the Hydraulic Mining Company or its assigns. It should be noted here that the equity of the plaintiff in the bonds mentioned has never been foreclosed. The claim of plaintiff that the bonds were taken as payment is in direct conflict with its formal agreement in writing executed at that time, and left where it remained with W. I. Yawter, who was agent for Mrs. Smith until the time of his death in 1916: It is the claim of Mr. Jefferson D. Cook, who is now the principal party in interest, that the written agreement showing that Mrs. Smith held the mining property as additional security for the notes was not to be delivered to Mrs. Smith, and that the mining property was only held to secure the note of $2,039.75 given at that time for interest that was in arrears. This claim was never made on behalf of plaintiff during the lifetime of Mr. Yawter. We concur in the findings of the trial court to the effect that the $12,500 has never been paid, and that Mrs. Smith holds the title to the mining property as partial security therefor.
It is asserted on behalf of plaintiff that the title of Mrs. Smith to the mining property was released by virtue of the stipulation made in the foreclosure suit of Vawter v. Three Pines Timber Co., et al., filed February 11, 1913. In the second amended complaint in that suit the Hydraulic Mining Company, Jeffer[98]*98son D. Cook and George E. Howland were brought in as defendants. In this complaint it was alleged in substance that in addition to the bonds held by Elizabeth A. Smith as security, she also held as additional security the conveyance of the mining property from the Hydraulic Mining Company which is involved in the present suit. No pleadings of any nature whatsoever were filed by the Hydraulic Mining Company in the defense of the foreclosure suit. On April 28, 1913, the stipulation was entered into, stipulating for the foreclosure of the trust deed and in regard to sundry matters and dealings relating to timber bonds with one Steel. The stipulation provided for dismissal of the suit as against Cook and Howland and the Hydraulic Mining Company. Paragraph 5 of the stipulation specifies the lands upon which the decree was operative. Paragraph 6 describes lands on which the decree was operative subject to prior liens. Paragraph 5 also includes within its description the lands of the Hydraulic Mining Company, as we understand, for the purpose of describing the timber thereon which had been transferred to the Three Pines Timber Company, and excepting those certain mining claims and mining rights contained in 181.22 acres of the land. Paragraph 7 provides as follows:
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BEAN, J.
It appears from the record that Mrs. Elizabeth A. Smith still holds the promissory notes of the Hydraulic Mining Company for the $12,500 originally loaned by her, which are wholly unpaid. It is shown by the evidence that the interest thereon [95]*95is in arrears from 1915. It further appears that defendant, Elizabeth A. Smith, holds the title to the mining property of the Hydraulic Mining Company under the conveyance of March 28, 1902, renewed by deed of June 10, 1907, and she still holds an interest in the property conveyed by the trust deed which has been foreclosed, in lieu of $11,500 par value of the bonds of the Three Pines Timber Company, as additional security for the loan, in accordance with the terms and provisions of the instrument of defeasance dated and acknowledged on June 10, 1907.
Defendant, Elizabeth A. Smith, set forth in her answer and established by her testimony the facts, in substance, as herein set forth.
The Hydraulic Mining Company by its reply put in issue the allegations of the answer and set up five further and separate defenses to the matters alleged in defendant’s answer, using the language of plaintiff’s brief, as follows:
“First: The foreclosure proceeding, the stipulation and the decree, heretofore referred to.
“Second: That the defendant received the bonds and the note $2,039.75 in full satisfaction of the debt.
“Third: The statute of limitations as to the original debt, and the original conveyance of the mining-property.
“Fourth: The statute of limitations as to the second conveyance of the mining property.
“Fifth: That the debt was paid by the sale of the property upon execution and the subsequent payment of certain small amounts of money.”
The plaintiff, upon this appeal, submits that the following questions are involved in this suit, namely:
“1. The effect of the stipulation and decree exonerating the mining property from any claim upon the part of the defendant.
[96]*96“2. Conceding' that the original debt was not paid by the delivery of the bonds, was it not paid by the foreclosure and sale thereunder?
“3. Was the original debt, and a right of action upon the conveyance of the mining property, barred by the statute of limitations?
“4. Was the right of action upon the second conveyance of the mining property, barred by the statute of limitations?
“5. Were the bonds delivered to the defendant as collateral security, or in full payment of the debt?”
As to the plaintiff’s claim that the notes of defendant, Elizabeth A. Smith, were paid by the delivery of the $12,500 par value of the bonds of the Three Pines Timber Company, on or about June 10, 1907, it is sufficient to say that it is not borne out by the testimony. The evidence is overwhelmingly to the contrary. It shows that the bonds of the Three Pines Timber Company were taken by Mrs. Smith at the earnest solicitation of the two officers and owners of the plaintiff corporation, George E. Howland, president, and Jefferson D. Cook, secretary, in lieu of timber land to which she held the title as an additional security for the loan, in order that the Three Pines Timber Company might convey the land to a trustee and provide for the bond issue. At the time of the delivery of the timber company bonds to Mrs. Smith the plaintiff, by its officers, executed a memorandum which, after reciting the fact of the indebtedness to Mrs. Smith in the sum of $12,500 and the fact that the bonds of the Three Pines Timber Company had been delivered to Mrs. Smith, and the Hydraulic Mining Company had conveyed the mining property to Mrs. Smith, that she, the. said Elizabeth A. Smith, should reconvey unto the first party, the Hydraulic Mining Company, the said mining prop[97]*97erty when she should have been paid the full sum of $12,500 with interest at 8 per cent per annum from July 1, 1907, and reciting further that there should be paid to Elizabeth A. Smith the sum of $12,500, either by the retirement and liquidation of the bonds or from the sale of the mining premises, and in the event that the indebtedness should be paid from the mining property or the sale thereof, that thereupon the bonds should be delivered to the Hydraulic Mining Company or its assigns. It should be noted here that the equity of the plaintiff in the bonds mentioned has never been foreclosed. The claim of plaintiff that the bonds were taken as payment is in direct conflict with its formal agreement in writing executed at that time, and left where it remained with W. I. Yawter, who was agent for Mrs. Smith until the time of his death in 1916: It is the claim of Mr. Jefferson D. Cook, who is now the principal party in interest, that the written agreement showing that Mrs. Smith held the mining property as additional security for the notes was not to be delivered to Mrs. Smith, and that the mining property was only held to secure the note of $2,039.75 given at that time for interest that was in arrears. This claim was never made on behalf of plaintiff during the lifetime of Mr. Yawter. We concur in the findings of the trial court to the effect that the $12,500 has never been paid, and that Mrs. Smith holds the title to the mining property as partial security therefor.
It is asserted on behalf of plaintiff that the title of Mrs. Smith to the mining property was released by virtue of the stipulation made in the foreclosure suit of Vawter v. Three Pines Timber Co., et al., filed February 11, 1913. In the second amended complaint in that suit the Hydraulic Mining Company, Jeffer[98]*98son D. Cook and George E. Howland were brought in as defendants. In this complaint it was alleged in substance that in addition to the bonds held by Elizabeth A. Smith as security, she also held as additional security the conveyance of the mining property from the Hydraulic Mining Company which is involved in the present suit. No pleadings of any nature whatsoever were filed by the Hydraulic Mining Company in the defense of the foreclosure suit. On April 28, 1913, the stipulation was entered into, stipulating for the foreclosure of the trust deed and in regard to sundry matters and dealings relating to timber bonds with one Steel. The stipulation provided for dismissal of the suit as against Cook and Howland and the Hydraulic Mining Company. Paragraph 5 of the stipulation specifies the lands upon which the decree was operative. Paragraph 6 describes lands on which the decree was operative subject to prior liens. Paragraph 5 also includes within its description the lands of the Hydraulic Mining Company, as we understand, for the purpose of describing the timber thereon which had been transferred to the Three Pines Timber Company, and excepting those certain mining claims and mining rights contained in 181.22 acres of the land. Paragraph 7 provides as follows:
“It is Further Stipulated, and the decree to be entered in this cause shall so provide, that any lien, claim or right so created in or upon any of the other properties described in the pleadings in this cause, by said trust deed or mortgage, and that all of such properties other than the properties described in paragraphs 5 and 6 of this stipulation, are released and discharged from the lien of said trust deed or mortgage, for the foreclosure of which this suit was brought, and are further released and discharged [99]*99from this suit, and from the claims of all and singular the parties to this suit.”
The purpose of the foreclosure suit was to foreclose the trust deed given to secure the Three Pines Timber Company bonds. The Hydraulic Mining Company was not a party to the decree in that suit. Its name was mentioned in the amended complaint for a time, and then the Hydraulic Mining Company and the matter of the deed to defendant Elizabeth A. Smith were dropped out. The property not mentioned in paragraphs 5 and 6 of the stipulation was released and discharged from the lien of the trust deed and discharged from the suit. That appears to be the object of the release. It seems to the writer that the words added, namely, “and from the claims of all and singular the parties to this suit,” are simply used to signify that the property should not be subject to the decree to be entered, but that the parties released their claims as such parties by virtue of the trust deed which was to be foreclosed. The Hydraulic Mining Company was not a party to the stipulation. The property involved in the case at bar was conveyed to Mrs. Smith by two deeds of conveyance. It would indeed be an anomalous situation if, in the preparation for the entry decree of foreclosure against other property not contained in the deed of conveyance, a few words added to a stipulation made by an agent without written authority could take the place of a conveyance of real estate. Such was never the intention of either of the parties to the present suit. It does not appear that the parties have so treated the stipulation. In entering the decree that record recites that the properties referred to “are wholly released, relieved and discharged from any and every claim, lien or demand whatsoever, claimed or asserted [100]*100in any of the pleadings in this suit, and by any and every party to this suit, are wholly released and discharged from this suit and from the operation of this, or any subsequent decree entered herein.”
1. It does not appear from the decree that it was even in the mind of the court to release the mining property from the lien of defendant’s deed. A solemn deed of conveyance should not be canceled by any such legerdemain.
The plaintiff submits that:
“Conceding that the original debt was not paid by the delivery of the bonds, was it not paid by the foreclosure and sale thereunder?”
This question must be answered in the negative. The property was sold in a suit to foreclose a trust deed given to secure the payment of the bonds of the Three Pines Timber Company, of which Mrs. Smith held $12,500 par value as collateral security. The trustee, in order to protect the security, bid in the property at the sale as such trustee.
2. It is stated in 19 R. C. L., page 578, Section 391, regarding the purchase by pledgee of mortgagee, as follows:
“The weight of authority is apparently to the effect that the pledgee of a mortgage as collateral security, who forecloses the same and purchases the property, holds the title subject to a trust in favor of the pledgor.”
We believe the rule to be as applied to the present case that where the pledgee makes the pledgor a party to the foreclosure proceeding, and forecloses the pledgor’s right of equity in the property, the pledgee may purchase at the sale, and upon accounting for the purchase money, is under no obligation' to surrender the land to the pledgor. It will be remem[101]*101bered, however, that in the foreclosure suit referred to, the pledgor, the Hydraulic Mining Company, was not a party to the proceedings in so far as to be affected or foreclosed by the decree: 31 Cyc. 831; Anson v. Olin, 145 Ill. 158 (34 N. E. 55); Bloomer v. Sturges, 58 N. Y. 168. It should be remembered that the Hydraulic Mining Company obtained the loan from Mrs. Smith and pledged the bonds referred to as collateral security for the payment of the loan.
3. The rule is stated thus: In such cases the pledgee foreclosing the mortgage securing the collateral may purchase the same' on foreclosure sale, and he will hold the property thus purchased as he held the mortgage, subject to reclamation by the pledgor upon his payment of the debt, the doctrine of merger not applying in such case, as by the foreclosure, the land becomes substituted for the mortgage, and the pledgor has the right, upon payment of the debt which he secured by the assignment, to reclaim and hold the land as his own property: 2 Jones on Mortgages (7 ed.), §§ 870 and 1880; Mareck v. Minneapolis Trust Co., 74 Minn. 583 (77 N. W. 428); note, 16 Ann. Cas. 126, and authorities cited; 19 E. C. L., p. 578, § 391; 21 E. C. L., p. 667, § 30.
The foreclosure suit was simply a proceeding by Trustee Yawter to foreclose the trust security, to the end that the proceeds might be applied in payment of the bonds, a part of which Mrs. Smith held as collateral. The foreclosure did not produce any cash, but Mr. Yawter’s successor in office bid in the property, and still holds the same, although, as heretofore stated, no sheriff’s deed has yet been executed. The bonds previously held by Mrs. Smith as collateral are merged by the foreclosure. The Hydraulic Mining Company, Cook, and Howland, the pledgors, will be [102]*102entitled to have that interest when they shall have paid the sums due Elizabeth A. Smith: Bank v. Seaweard, 78 Or. 567 (152 Pac. 883). In the case of Union Trust Co. v. Hasseltine, 200 Mass. 414 (86 N. E. 777, 16 Ann. Cas., at page 125, et seq.), the majority rule is thus stated:
“With regard to the title acquired by the pledgee who purchases the mortgaged property at the foreclosure sale, it has been said: ‘The law is that, when a mortgage which secures choses thus held is foreclosed, and the land bid in by the pledgee, it becomes by substitution the collateral security, taking the place of the choses which the mortgage secured.’ ”
It is the contention of the plaintiff that the statute of limitations was run against Mrs. Smith’s deed construed as a mortgage. When the new arrangement was consummated on June 10,1907, the obligation of the mining company to Mrs. Smith was in arrears in interest in the sum of $2,039.75. According to Mrs. Smith’s testimony, and also the admissions of Mr. Cook, the last-mentioned amount for which a note was given was paid at different times, being completed August 14, 1907. The evidence does not show that the note given for this interest was accepted as a payment. This suit was commenced August 3, 1917. The answer of defendant, in the nature of a cross-complaint; was filed November 17, 1917. Beginning with June 4, 1908, Trustee Vawter received, on account of the Three Pines Timber Company for stumpage, various sums of money, and distributed the same to the bondholders in payment on their bonds. These amounts were necessarily credited upon the principal claim. Mrs. Smith received on the following dates the following amounts, namely: June 4, 1908, $500; May 6, 1909, $500; January 4, 1910, $500; [103]*103December 6, 1910, $500; February 4, 1911, $500; May 1,1913, $1,500; April 5, 1914, $372.60; October 7, 1915, $405. These amounts were received on account of the proceeds and earnings of the property which was given as security for her claim. The last mentioned of $405 was paid as alleged in plaintiff’s reply in addition to the money received on the sale of the property by the sheriff of Jackson County and of Josephine County. Plaintiff asserts that it “more than paid in full all sums due the defendant herein on account of the original loan of $12,500.”
Pursuant to the plans of Messrs. Cook and How-land for the issue and delivery of the Three Pines Timber Company bonds, the trust instrument authorized the trustee to pay the indebtedness of the Hydraulic Mining Company to Mrs. Smith, amounting approximately to $15,000.. The several payments made by the trustee to which we have referred were made in accordance with such authority. They were made before the expiration of the ten years limitation. Ever since such payments the plaintiff and its owners and managers, Messrs. Cook and Howland, have acquiesced therein, pleading a payment in 1915 in its reply. Apparently it approved the same afterwards, as well as authorizing the payments beforehand.
In 1913, the legislature enacted Chapter 304, General Laws of Oregon, 1913, which reads as follows :
“Section 1. No mortgage upon real estate now, heretofore or hereafter given, shall be a lien or encumbrance, or of any effect or validity for any purpose whatsoever, after the expiration of 10 years from the date of maturity of the obligation or indebtedness secured or evidenced by such mortgage, or from the date to which the payment thereof has been extended by agreement of record. If the date of the maturity of such obligation or indebtedness is not [104]*104disclosed by tbe mortgage itself, then the date of the execution of such mortgage shall be deemed the date of the maturity of the obligation or indebtedness secured or evidenced by such mortgage.
“Section 2. After 10 years have elapsed from the date of the maturity of any mortgage upon real estate, as herein provided in Section 1 of this act, such mortgage shall conclusively be presumed to be paid, satisfied and discharged, and no action, suit or other proceeding shall.be maintainable for the foreclosure of the same.”
In 1917, the legislature passed an act providing how the act of 1913 should be construed by adding thereto (See General Laws 1917, p. 39):
“Section 4. 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 of 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 1 of this Act described.”
In view of Section 25, Or. L., we question if the amendment of 1917 was of any efficacy as to a change in the law. Section 25 has been on our statute books since 1862, and reads as follows:
“Whenever any payment of principal or interest has been or shall be made upon an existing contract, whether it be bill of exchange, promissory note, bond, or other evidence of indebtedness, if such payment be made after the same shall have become due, the limitation shall commence from the time the last payment was made.”
[105]*1054. Mrs. Smith was undoubtedly obliged to apply the payments upon the obligation of the plaintiff. Conceding without deciding that the act of 1913 applied to a deed executed as a mortgage, which the writer seriously questions, the payments made by plaintiff upon the obligation in favor of defendant, Elizabeth A. Smith, tolled the statute of limitations, which has not run against either the deed given as security or the notes of plaintiff. "While Mr. Vawter’s death has occasioned some obscurity in details, yet the record of his transactions as the agent of Mrs. Smith which he left is plain and is in entire conformity to the claim made by Mrs. Smith in her answer: Kaiser v. Idleman, 57 Or. 224 (108 Pac. 193, 28 L. R. A. (N. S.) 169).
It follows that the decree of the lower court should be affirmed, and it is so ordered. Affirmed.
Burnett, O. J., and McBride and Harris, JJ., concur.