Legal Question in Real Estate Law in California

Without seeing how the second is held, I can't really say for sure, but generally if there are joint beneficiaries of a deed of trust one of them cannot go to trustee's sale without the other's consent and participation. In the scenario you give it would also be foolish for the 2nd to do a trustee's sale, because they would lose their right to a deficiency judgment, while acquiring a property that is worth less than what would remain owed on it. In otherwords they would trade the debt for property that would be worthless to them. They may as well use the note for bird cage liner and save the trustees sale fees if they're going to do that.

Is the second even in default? Has the other beneficiary consented to the trustee's sale?