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7. In such action, the sister should
A brother and sister owned Greenacre in fee simple as tenants in common, each owning an undivided one-half interest. The brother and sister joined in mortgaging Greenacre to a private lender by a properly recorded mortgage that contained a general warranty clause. The brother became disenchanted with land-owning and notified his sister that he would no longer contribute to the payment of installments due to the private lender. After the mortgage was in default and the private lender made demand for payment of the entire amount of principal and interest due, the sister tendered to the private lender, and the private lender deposited, a check for one-half of the amount due the private lender. The sister then demanded a release of her undivided one-half interest. The private lender refused to release any interest in Greenacre. The sister promptly brought an action against the private lender to quiet title to an undivided one-half interest in Greenacre.
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A mortgage is a security interest in real property held by a lender as a security for a debt, usually a loan of money. A mortgage in itself is not a debt, it is the lender's security for a debt. It is a transfer of an interest in land (or the equivalent) from the owner to the mortgage lender, on the condition that this interest will be returned to the owner when the terms of the mortgage have been satisfied or performed. In other words, the mortgage is a security for the loan that the lender makes to the borrower.
At any time prior to the foreclosure sale, the mortgagor has the right to redeem the land or free it of the mortgage by paying off the amount due, together with any accrued interest. A mortgagor's right to redeem her own mortgage cannot be waived in the mortgage itself.
B is correct. Although the brother and sister each independently own an undivided one-half interest in Greenacre, they chose to mortgage the property jointly. Therefore, the private lender holds a mortgage to all of Greenacre, for which the brother and the sister are jointly and severally liable. The joint mortgage represents a contractual agreement between the brother and the sister as a single entity on the one hand, and the private lender on the other. The sister's making a payment of half of what is owed on the mortgage has the same legal effect as paying off half of any debt — the rest of the debt is still owed. To protect her one-half interest, the sister should have obtained a mortgage on only her own interest. That would have left her rights unaffected by any actions or inactions of the brother
A is incorrect. While it is correct that the sister should lose, this is not the reason why. As explained above, the right of redemption cannot be waived through any express language in the mortgage contract.
C is incorrect. The doctrine of marshalling states that if a creditor has access to two sources of payment, he shall take his payment out of that fund upon which another creditor has no access or lien. This does not apply here, because the brother and sister jointly acquired the mortgage.
D is incorrect. Whether the tenancy was in common or joint is not relevant to this question. The brother and sister are still both jointly and severally liable for the mortgage because they got the mortgage together.