I have a Toro that I just purchased used that consumes 1 quart of oil every 3 hours of use. I removed the air cleaner and engine oil is dumping out for the engine breather. Do these engines have piston ring issues? I just paid 600 bucks for the mower and new engines are about 850 bucks online. Is there a oil vapor seporator as used on car engines that may have failed?

Hi,
Would not mind knowing exactly wich engine I am answering for, three are possible with that HP decal.
It would be "yes" to all questions I perceived. There is a breather that can fail, though not real common. There can be ring issues; almost always caused by oil change schedule not followed, especially that first one that cleans out the break-in particles. Dirt ingestion can also cause it, usually around the air filter.
One thing to try first would be to change the oil (and filter, if equipped) with a high quality 30W after engine/mower has been used and is hot. Mow two or three times and do it again. This will often greatly reduce the consumption.
Peace,
Clarke