Hello, this is business law study could you please help me in solving this, this is part of my assignment from chapter 23 law of mortgage. And with each and every principle applies on it.

Smith, Jones and Davis carried on business in partnership as SJD Building Contractors. They arranged for the purchase of 3 adjacent lots in a subdivision at a price of $80,000 per lot, financing the transaction with a mortgage on the three lot parcel for $180,000, and the partnership supplying the balance of the funds. The mortgage was in the name of the three partners carrying on business as SJD Building Contractors. Smith signed the mortgage on behalf of the partnership.

A month later, Davis decided to retire from the partnership, but wished to build a home for himself and his family on one of the lots. The partnership approached the mortgagee and requested a release of the lot from the mortgage on payment to the mortgagee of $60,000, being approximately one third of the amount of the mortgage. The mortgagee agreed, and Davis personally paid the $60,000 for a release of the lot.

The housing market, however, took a downturn, and Smith and Jones found themselves shortly thereafter in financial difficulty. Unable to make mortgage payments, the mortgage fell into arrears. The value of the two lots, unfortunately, had fallen in value

and were worth approximately $50,000 each. Themortgage at this point, with arrears, was $118,000. Advise each of the parties (including Davis) of their rights and obligations (if any).