724. Effect of subsequent payment of arrears of interest.

If interest was in arrear when the mortgagee took possession, so that he was not in the first instance liable to account with rests1, he does not become liable so to account from the date when the arrears were paid off out of the rents2. If, however, while the mortgagee is in possession under circumstances which do not subject him to account with rests, an account is settled between the parties which shows that no interest is due, or that arrears of interest have been turned into principal, the mortgagee is from then onwards liable to account with rests