1. This is a defendant's second appeal against a decree of the lower appellate Court confirming a decision of the Court of first instance decreeing the plaintiff's claim for damages. The matter arose in this way: Abdul Rashid, the plaintiff and his brother Abdul Haq, were the owners of certain property set out in the plaint and which is the subject matter of this dispute. On 18th July 1924, Abdul Haq alone executed a lease of the property in dispute in favour of Abdul Majid, defendant 2, who is the present appellant, and Maqsad Khan. This lease was for a term of seven years at an annual rental of Rs. 500. Shortly afterwards Maqsad Khan executed a sub-lease of his rights to Qadar Bux, defendant 1. On 2nd September 1927, Abdul Rashid mortgaged the whole of the property in dispute in favour of defendants 3 and 4 for Rupees 2,000. On 21st June 1928, Abdul Rashid, executed a usufructuary mortgage of the whole of the property in favour of one Bakkas for five years to secure a sum of Rs. 4,000. Of this sum Rs. 2,173 were left with Bakkas, in order that the latter might discharge the liability due to defendant's 3 and 4 under the prior mortgage, dated 2nd September 1927. Bakkas never discharged this previous liability and some time in the year 1931 he died leaving surviving him his widow, defendant 7, and his five sons, defendants 1 to 5, and a daughter, defendant 6. On 21st December 1932, the mortgagee rights of the deceased Bakkas were sold and purchased by Mb. Sughra Bibi. No attempt was made by the representatives or heirs of Bakkas to discharge the mortgagor's liability under the previous mortgage and consequently, on 10th April 1933, Abdul Rashid brought these proceedings claiming a sum of Rs. 1,607 together with certain interest as damages for breach of the covenant entered into by the deceased Bakkas in the mortgage, dated 21st June 1928.
2. It is clear that Bakkas never paid the money and it remains unpaid to-day. He undertook to pay a sum of Rs. 2,173 which had been allowed to remain in his hands, and if payment of such sum had been made the liability of the plaintiff under the mortgage of 2nd September 1927 would have been completely discharged. By reason of the failure of Bakkas, or his heirs to pay this sum the mortgage of 2nd September 1927 is still subsisting and there is due from the plaintiff to defendants 3 and 4 under that mortgage a sum greatly in excess of Rs. 2,173. It is clear that by reason of the non payment of the sum of Rs. 2,173 in June of 1928 the liability under the previous mortgage has very substantially and materially increased. The plaintiff alleges that interest has accumulated upon the sum due under that mortgage and such accumulated interest amounts to Rs. 1,607 which is claimed in this suit. There is no dispute as to this amount and it must be conceded that if the plaintiff is entitled to damages be is entitled to this sum. However it is argued on behalf of the appellant in this case that the plaintiff is not entitled to any damages whatsoever, because in the first place there has been no breach as yet of the contract, and secondly that even if there has been a breach, the plaintiff has not suffered any damages. We are perfectly satisfied that there has been a breach of the covenant contained in the mortgage of 21st June 1928 by which Bakkas, undertook to pay Rs. 2,173 to defendants 3 and 4 to discharge the prior mortgage. No time was stated in which such payment was to be made, and in our view Bakkas was under a liability to pay that sum there and then. His failure to pay up until the date of his death undoubtedly amounted to a breach of contract which has not been remedied by payment by his heirs. We are further satisfied that the plaintiff has a cause of action in this case and that he has suffered Joss for which damages are recoverable.
3. The authorities of this Court upon this subject are somewhat conflicting, but in our view the latest cases go to show that where money has been left with a vendee or mortgagee in order to discharge some earlier mortgage and such vendee or mortgagee fails to discharge the liability, a cause of action for damages arises immediately and the vendor or mortgagor need not wait until the property is actually sold or until he is sued or a decree is passed against him before bringing a suit for damages. On the one hand the case in Ishri Prasad v. Muhammad Sami 1921 19 ALJ 81, is an authority in favour of the appellants. In that case a mortgage was executed on 12th May 1899, and part of the consideration money was left with the mortgagee to pay off a prior mortgage, it being agreed that the money was to remain with him and that any interest which might accrue on this sum in future would be entirely upon his shoulders and would have to be paid by him when he paid the money. The mortgagee did not pay the money and the prior mortgagee sued and obtained a decree for sale on 14th December 1905 and the mortgaged property was sold in execution on 20th January 1912 and then the remaining property was sought to be sold for the balance of the decree money, and to avert that sale the mortgagors paid off the amount and then brought a suit in 1916 to recover damages. It was held that inasmuch as under the agreement between the parties the mortgagee 'had undertaken all responsibility for further interest, and could therefore pay the prior mortgage at any time he pleased, the cause of action did not accrue on the date of the mortgage, but arose only on the date on which the mortgagor was damnified, and the suit, which was governed by Article 116, Lim. Act, was within time.
4. This case, it is urged, is a wrong authority for the contention that the present claim was premature, but it will be noted that the covenant entered into by the mortgagee in Ishri Prasad v. Muhammad Sami 1921 19 ALJ 81 differs very materially from the covenant in this case. All that Bakkas in the present case agreed to do was to pay a sum of Rs. 2,173 to the prior mortgagees and that must be construed as an undertaking to pay that sum immediately or in any event within a very short space of time. On the other hand, in Raghubar Rai v. Jai Rai (1912) 34 All 429, a Bench of this Court held that, where on a sale of immoveable property the vendees covenanted with the vendors to pay a certain sum of money on account of a mortgage debt due by the vendors and did not pay in accordance with the covenant, and the mortgagee thereupon brought a suit upon his mortgage and obtained a decree, it was not necessary that the vendors should have suffered any loss before they could bring their suit, and that, as no time was specified in the sale deed for the payment of the mortgage money, limitation began to run from the date of the execution of the deed. This case is an authority for the respondent's contention that he has a cause of action, although the property, the subject matter of the prior mortgage, has not been sold; neither has any proceedings been brought against him at the instance of the mortgagees under that mortgage.
5. A somewhat similar view was taken by another Bench of this Court in Shiam Lal v. Abdul Salam 1931 53 All 946. There money was left with a vendee to pay off an existing mortgage on the property. The vendee failed to pay it and the mortgagees sued on their mortgage and got a decree for sale. Thereupon the mortgagor vendor sued the vendee for damages for breach of contract, claiming the amount of the decree together with interest. The suit was resisted on the ground that there was no cause of action for the suit, inasmuch as the plaintiff had not paid the mortgagees nor had his property been sold and, so far, he had suffered no actual damage. It was held that a decree for sale having been passed against the plaintiff he had a good cause of action for the suit, although actual damage or loss, in the narrower sense of the word, had not yet occurred. The question has also been considered by a Full Bench of this Court in Naima Khatun v. Basant Singh 1934 ALJ 318. At pp. 323 and 324 the present learned Chief Justice discussed the effect of previous decisions. He observes:
In Raghubar Rai v. Jai Rai (1912) 34 All 429, a Bench of this Court held that upon failure to pay money due by a vendor to a third party, which the vendor agreed to pay without any time for payment having been fixed, the vendor had a right to sue for the money. The learned Judges quoted English authorities to show that even before an injury was done or damage took place, the vendor could bring an action in order that the person making the covenant may place him in a position to meet the liability he had undertaken. The learned Judges held that the breach of the covenant, without any actual loss, gave a sufficient cause of action to the vendor; and holding that the cause of action had accrued on the date of the breach, they actually held the suit to be time-barred. In the course of the judgment they observed that one breach of a contract can furnish only one cause of action and no more, and the actual loss when it accrues is only one of the results of the breach and creates no second cause of action. But this was purely an obitor dictum and no part of the actual decision in the case.
6. The learned Chief Justice then proceeds to discuss a number of other authorities, but it is to be noted that the actual decision in Raghubar Rai v. Jai Rai (1912) 34 All 429 is approved of, although the observation made in the judgment, that there could only be one cause of action, was doubted and regarded as obiter. In our view the trend of authority does show that these Courts have recognized that even before an injury has been done or damage has actually taken place, a mortgagor in the position of the present plaintiff can bring proceedings in order to place himself in a. position to meet the liability which he has undertaken. In the present case the plaintiff is faced with a liability of. Rs. 3,780 on his previous mortgage whereas if Bakkas had performed his contract the plaintiff would have been liable only for Rs. 2,173. To discharge the previous mortgage the plaintiff required at the date of this suit Rs. 1,607 in excess of Rs. 2,173 which Bakkas agreed to pay on his behalf. To place him in a position to meet his liability at the date of the institution of the suit the present defendants would have to pay the amount claimed by way of damages. In our judgment he was entitled to call upon the defendants to place him in a position to meet his liability which had increased by reason of the failure of Bakkas to discharge his obligation, and that being so we bold that he has a cause of action for damages and that the measure of damages-has been correctly laid down by the lower Courts.
7. In the result therefore we see no ground for interfering with the decree of the lower appellate Court and therefore this, appeal is dismissed with costs.