JUDGMENT Piggott and Walsh, JJ.
1. This is an appeal by the defendant in a suit which, as brought, was a suit for damages on account of the breach of a covenant of indemnity contained in a sale-deed of the 4th of July, 1901. That deed in itself arose out of and formed the completion of a transaction embodied in a previous deed of the 9th of January, 1899. The plaintiffs in this case represent the transferees of the vendees under these two deeds and the defendant the vendor in each of these deeds. The vendor purports to convey certain property free of all encumbrances, and in each of them there is a covenant setting forth what is to happen in the event of its being found that the property is in fact encumbered, and in the event of the vendees being disturbed in possession or having to make any payment on account of some previously existing encumbrance. The matter is clearer in the earlier of the two deeds, but no doubt the point has to be decided with reference to the agreement as embodied at the end of the deed of the 4th of July, 1901, on page 8 Rule of the book before us. We have only referred to the previous document in order to explain the nature of the transaction as throwing light on the intention of the parties and the footing on which they were dealing with one another. Unfortunately, in the deed of the 4th of July, 1901, there has been a clerical error on the part of the scribe in that very portion of the document which is most material for our purpose. We are not sure that this error is really vital to the decision of the question argued before us, but the error is there and it is as well that attention should be called to it. A certain word in the deed may have been intended to be written as "maqabal" or as "fazil." As the document stands it is actually written "faqabal," which is nonsense, but it must be intended to be read as one or other of these two words. Now on the one reading the expression is correctly translated in our paper book by the words "or if any excess amount is charged against them;" on the other reading, we may translate" or if they are held chargeable with any encumbrance." The latter of these two readings would be less favourable to the appellant's case and for the purposes of argument we may adopt the former. The covenant then is that, in the event of the vendees having to pay some excess amount, that is to say, some further charge over and above the sale consideration set forth in the deed, the estate of the vendor will be liable to make it good, together with damages and costs. Immediately before the words above set forth there is a recital that the property is conveyed to the vendees free from all debts and liabilities or claims. Then follows the agreement that if any portion of the property passes out of the possession of the vendees, or they fail to obtain possession, or finally, in the alternative, if any excess amount is charged against them, the other property of the vendor will be liable for damages. It subsequently transpired that there was a prior encumbrance on the property conveyed in the shape of a mortgage in favour of one Chatri Lal. A suit was brought on this mortgage in which the present plaintiffs, the vendees, were impleaded along with the original mortgagor. The claim was contested, but resulted finally in a decree in favour of Chatri Lal, and in order to save the property from sale under that decree the present plaintiffs, the vendees under the deed of the 4th of July, 1901, had to pay I up the sum now claimed by them, consisting of the mortgage money due to Chatri Lal along with interest and costs. In the court below this claim was resisted upon a variety of pleas, some of which are repeated in the memorandum of appeal now before us, but the appeal has been argued upon one ground only, namely, on the plea of limitation.
2. There was an issue on this point in the court below (issue No. 5), and the learned Subordinate Judge disposed of it very briefly, by pointing out that in his opinion the cause of action accrued to the plaintiffs in the month of May 1915, when they had to pay the money to Chatri Lal, and that this plaint had been filed with great promptitude in the month of July 1915. He held therefore that it was clearly within time. Curiously enough, in the memorandum of appeal before us this finding on the question of limitation is not in express terms challenged. We have been told, however, that there has been some error or oversight about the drafting of the memorandum of appeal and that the plea taken in the first paragraph was intended to read, "that the plaintiffs had no subsisting cause of action," and so raised the question of limitation. At any rate we have heard the appellant on this point, and it was within our discretion to do so. The plea is based upon the contention that the agreement embodied in the last paragraph of the deed of the 4th of July, 1901, was simply a covenant of title, that there was a breach of this covenant the moment the deed itself was executed, that a cause of action accrued to the plaintiffs on that very date and that consequently the present suit is barred under the six years' rule of limitation. As subsidiary arguments on this point our attention has been drawn to the fact that the mortgage m favour of Chatri Lal was a registered document, of which it might be said that the plaintiffs had constructive notice, and that in any event they had actual notice of it when Chatri Lal instituted his suit, which was as long ago as the year 1902. The argument before us has proceeded upon lines which evidently were not followed in the court below. Our attention has been drawn to a number of rulings, of which the decision most in point is that in Sari Tiwari v. Raghunath Tiwari (1888) I.L.R. 11 All. 27. What that case seems to us to lay down is that, if the plaintiffs in a suit like the present were bound to rely solely upon a covenant of title, whether express or implied, it might be held that limitation ran against them from the date of the execution of the deed; but in that suit itself a distinction was drawn, and the plaintiffs were held to be within time, because they were not suing upon a mere covenant of title, and it was held that their cause of action arose long subsequently when they were dispossessed of a portion of land then in question.
3. Similarly, in the present case, it seems to us that the plaintiffs are entitled to rely upon the words already set forth as a covenant of indemnity and to bring a suit upon them from the date on which they suffered actual loss by reason of their being compelled to pay off the prior mortgage charge. The decision of the court below on the issue of limitation therefore appears to be substantially correct on the ground on which it propels, although the point was not fully argued. The appeal, therefore, fails and we dismiss it with costs.