A mortgagee in possession is bound to keep the premises in reasonable repair so far as the rents and profits will enable him to do so, and he will be liable for deterioration occasioned by his gross or wilful negligence, but he will not be liable merely because after a long period of possession the premises are not in as good condition as he found them (o).

Where a mortgagee of leaseholds took possession of unfinished buildings and did nothing to complete them whereby the lease became forfeited he was held liable as for wilful default (p). But a mortgagee is only liable for neglect to repair if there is a surplus of rents after payment of interest on the mortgage; he is not bound to expend his own money on repairs (q), and a mortgagee is not bound to lay out money on the property except for necessary repairs, although, as already pointed out, he will be allowed in certain cases for improvements (r). Although he may replace decayed buildings by new buildings he is not bound to expend money in-rebuilding (s).

(m) Ex parte Hooman, In re Vining, 1870, L.R., 10 Eq. 63.

(n) Steers v. Rogers, [1893] A. C. 232.

(o) Russell v. Smithies, 1792, 1 Anst. 96, 9 R.C. 508; Wragg v.

Denham, 1836, 2 Y. & C. Ex. 117.

(p) Perry v. Walker, 1855, 24 L.J. Ch. 319.

(q) Richards v. Morgan, 1753, 4 Y. & C. Ex. 570 (Appendix).

(r) Godfrey v. Watson, 1747, 3 Atk. 517.

A mortgagee in possession is also liable for waste (t), but where the mortgage security is insufficient the mortgagee is entitled to make the most of the property for the purpose of realizing what is due to him. He may in that case cut timber, open mines, etc., subject always to the right of the mortgagor to call him to account and at his own risk in case he expends money unprofitably (u).

The mortgagee of a term of years, being in possession, will at the suit of the mortgagor be restrained from felling timber, even though he may have obtained the consent of the reversioner (v).