424. Application of rents received by mortgagee.

The rents received by a mortgagee in possession are applicable in the first instance in paying the current outgoings such as rents, rates and taxes, repairs, insurance premiums and the interest on prior incumbrances1. The balance is then applicable, first, in payment of interest on the mortgage debt, and on expenses of improvements and otherwise, which the mortgagee is entitled to add to principal; and, secondly, in payment of the principal and of capital expenditure added to principal