This section is from the book "The Law Of Real Property and Other Interests In Land", by Herbert Thorn Dike Tiffany. Also available from Amazon: A Treatise on the Modern Law of Real Property and Other Interests in Land .
In case a mortgage is given on the land of one person to secure the debt of another, the former is in effect a surety to the extent of his land, and if the creditor releases the principal debtor or other security furnished by the latter, he to that extent extinguishes the mortgage.94 It is upon a similar principle that if different parts of the mortgaged land, by reason of their ownership by different persons, are liable, not equally for the mortgage debt, but in some particular order, a release of a part primarily liable 'may to that extent operate to release a part secondarily liable.95 And so if the mortgaged land is transferred subject to the mortgage the mortgagor's personal liability is secondary only,96 and consequently a release, by the mortgage creditor, of the land97 or of the transferee's assumption of personal liability,98 may have the effect of releasing, to that extent, the mortgagor's personal liability. A somewhat similar rule is applied in connection with the equitable doctrine of marshalling.99 By force of this doctrine, one who has a superior lien upon two funds owes to one who has an inferior lien on one only of such funds a duty to enforce his lien, so far as possible, against the other fund, so as not to affect the inferior lien. And if the one having the superior lien, with knowledge of the inferior lien, releases his lien on the fund which is subject to his lien alone, he thereby loses to that extent his lien on the fund which is subject to both liens, provided this latter is insufficient to pay both debts. This rule has been applied in the case of a release by a senior mortgagee, for the purpose of protecting a junior lienor.1 The application of these rules, how94. Finnegan v. Janeway, 85 Minn. 384, 89 N. W. 4; Hardwicke v. Barnes, 179 Mo. App. 386, 166 S. W. 826; Grow v. Garlock, 97 N. Y. 81; Atwater v. Underbill, 22 N. J. Eq. 599.
R (Pa.) 223; Thomas' Appeal, 30 Pa. St. 378.
89. See Robinson v. Urquhart, 12 N. J. Eq. 515; Houseman v. Bodine, 122 N. Y. 158, 25 N. E. 255; Pechin v. Brown, 3 Phila. (Pa.) 62.
90. Kellogg v. Ames, 41 N. Y. 259.
91. Hoy v. Bramhall, 19 N. J.
Eq. 563, 97 Am. Dec. 687; Kelley v. Jenness, 50 Me. 455, 79 Am. Dec. 623; Sheddy v. Geran, 113 Mass. 378; White v. Knapp, 8 Paige (N. Y.) 173; Graves v. Mumford, 26 Barb. (N. Y.) 95; Hubbell v. Blakeslee, 71 N. Y. 63.
92. Post, Sec. 661.
93. See Houseman v. Bodine, 122 N. Y. 158, 25 N. E. 255.
95. Ante, Sec. 625.
96. Ante, Sec. 622.
97. Bowman v. Clyde, 101 Kan. 165, 165 Pac. 820; Meigs v. Tunne-cliffe, 214 Pa. 495, 112 Am. St.
Rep. 769, 6 Ann. Cas. 549, 63 Atl. 1019; Woodward v. Brown, 119 Cal. 283, 63 Am. St. Rep. 108, 51 Pac. 2, 542.
98. Heidahl v. Geiser Mfg. Co., 112 Minn. 319, 140 Am. St. Rep. 493, 127 N. W. 1050.
99. Post, Sec. 647.
1. Clark v. Cowan, 206 Mass. 252, 92 N. E. 474; Anderson v. McCloud Love Live Stock Comever, in order to preserve the equities of the various parties as regards the order of liability,2 or as regards the marshalling of assets,3 is dependent upon whether the mortgage creditor or other incumbrancer has actual notice of such equities, and he is not charged with notice thereof by the fact that they would appear upon an examination of the records.