Application of Proceeds of Sale of Encumbered Property

The proceeds of the sale of encumbered property must be applied under the direction of the court, as follows: 1. To pay its just proportion of the general costs of the action; 2. To pay the costs of the reference; 3. To satisfy and cancel of record the several liens in their order of priority, by payment of the sums due and to become due; the amount due to be verified by affidavit at the time of payment; 4. The residue among the owners of the property sold, according to their respective shares therein.