1. The simple question at issue in this second appeal is whether the proper defendant in the case is the present appellant or whether he ought to have been the person who originally contracted to sell the land in suit to the plaintiffs. The plaintiffs had a contract for the purchase of certain land belonging to Usufsab, and in spite of the existence of that contract and the payment of earnest money Usufsab subsequently sold the land to the present defendant. The plaintiffs were compelled to bring a suit on September 12, 1927, for specific performance of their contract, and in that suit they made both Usufsab and the present defendant parties. They obtained a decree for specific performance and they got possession of the property in July, 1929. They now sue the defendant for mesne profits for the period September 12, 1927 to July, 1929. Both the Courts have given them a decree. The learned District Judge who heard the appeal held that though the plaintiffs were not entitled to mesne profits as such, they not being full owners of the property during the period for which mesne profits were claimed, still they were entitled to damages for wrongful occupation by the defendant. Against this decree the defendant comes in second appeal.
2. The only question is whether the defendant was the proper person to be sued. It cannot be said that the defendant's occupation of the land was in any way wrongful, since, until the plaintiffs became the actual owners of it by the execution of a formal conveyance, Usufsab remained the owner and was entitled to convey the land to the defendant and the defendant was thus entitled to regard himself as the full owner. Mesne profits are therefore inadmissible. That being so, is the defendant liable to pay damages It is true that the defendant had notice of the prior contract of sale in favour of the plaintiffs; but I do not think that this affects the question. The only, authority cited which appears to me in any way to the point is Thiruvenkalachariar v. Sheshadri Iyengar : (1916)30MLJ559 . That was a case of a plaintiff who bought certain property with notice of a prior agreement of sale and sued to evict the persons in whose favour the prior agreement of sale had been effected; and it was held that he could not do so. In the course of the judgment it was said. (p. 561):-.the contract by itself does not create a right in rem, but only creates a right in personam against the vendor and that obligation is made enforceable against the subsequent purchaser, as an obligation in personam to a limited extent, namely, to the extent of compelling him to give effect to the previous contract by way of specific performance, though he is not liable in damages as the original vendor would be... It is clear therefore that the subsequent transferee is not a simple trustee for the person holding the contract, but he is only a person who holds the property for the benefit of the contractee to the extent necessary to give effect to the contract. If the contract by itself does not create a right in rem in the property contracted to be. sold,... it cannot have any greater effect as against the transferee with notice.'
I have italicized the words which seem to me to be of importance. On the authority of this decision I hold that the defendant in the present case was liable for the specific performance of the contract of sale in favour of the plaintiffs but not for anything else. The question of Yusufsab's liability (if any) is not now in dispute, and on that point I am expressing no opinion.
3. The appeal must be allowed and the suit of the plaintiffs dismissed with costs throughout.