Consent. The owners' prior consent to the master's hypothecation of Owners' prior the ship is, in view of the law, the strongest evidence of the necessity for it; the jealousy of the law for their protection is thus allayed; and its ordinary rule also is thereby satisfied, requiring the master, on such occasions, first to communicate with his owners whenever the possibility of doing so corresponds with the existing necessity. That bond, therefore, is at least of very doubtful validity, which is given by a master in respect of a voyage that he has undertaken, regardless of the intentions of the owners, or contrary to their express desire." 5 It is essential to the contract itself that it be founded on maritime risk, making the repayment of the loan contingent on the safe arrival of the ship. If, instead, it bind the owners personally to payment in all events, it is not a contract of bottomry; the Court of Admiralty has no power to enforce it; the lender has no insurable interest under it; and as it exceeds the implied authority of the master, it cannot, in the absence of the express sanction of the owners, be sustained at law or in equity. Maritime Risk a condition of the Contract. mium. The maritime premium, pretium periculi, is not necessary to Maritime Prethe validity of the bond; but yet the absence or presence of it is bottomry bond is a void transaction, not affecting the property of the owner, and only fixing loss and shame on the fraudulent lender; but where honourably transacted under an honest ignorance of this fact, an ignorance that could not be removed by any reasonable inquiry, it is the disposition of this court to uphold such bonds as necessary for the support of commerce in its extremities of distress, and, as such, recognised in the maritime codes of all commercial ages and nations;" per Lord Stowell, The Nelson, Brown, 1 Hagg. Ad. 169, 176. Per Dr. Lushington, The Royal Arch, Kenney, 1 Swab. Ad. 269; The Bonaparte, infra. 2 Wallace t. Fielden, 7 Moore, P. C. 398, 409; The Bonaparte, Andersen, 3 W. Rob. Ad. 298; Wilkinson v. Wilson, 8 Moore, P. C. 459, S. C.; The Cargo ex Sultan, 5 Jur. N. S. 1060. 3 The Reliance, Hays, 3 Hagg. Ad. 4 Stainbank v. Shephard, 13 C. B. Bynkershoek, Quæst. Jur. Priv. 6 The Atlas, Clark, supra; Ladbroke v. Crickett, 2 T. R. 649, 651. 7 Stainbank v. Fenning, 11 C. B. 51; Stainbank v. Shephard, 13 C. B. 418; 22 L. J. (Ex.) 341, S. C. 8 Per Cur. Stainbank v. Shephard, supra. Bottomry Bond, by whom. To whom. a circumstance that will be looked at, if there is any doubt of the bond being founded on sea risk.' It was always lawful, though necessarily high;' but if it is unreasonably high, the Court of Admiralty may reduce it; and if the ship never leaves the port where the bond was given, a court of equity will decree payment of it with ordinary interest only.* 5 3 Such a bond may be valid, though given by the master or substituted master, but if it is given by the owners, or with their consent, and the ship under ordinary circumstances be, at the time, in a British port, preparing for a new voyage, it is not enforceable in the Admiralty Court of this country. It is not invalid, although the lender thereon be the agent of the owners, or the consignees of the cargo," provided he is not at the time indebted to the owners; otherwise, to the extent of his debt, the bond pro tanto will be declared invalid." 1 The Emancipation, Tucker, 1 W. Rob. Ad. 124, 129; Stainbank v. Shephard, 13 C. B. 418; The Royal Arch, Kenney, 1 Swab. Ad. 269, 273, 280. 2 Sharpley v. Hurrell, Cro. Jac. 208; Joy v. Kent, Hard. 418; Soome v. Gleen, 1 Sid. 27; Molloy, bk. 2, c. 11, § 8, 13. 3 Lord Stowell seems to have doubted whether he had such a power, The Zodiac, Scott, 1 Hagg. Ad. 320, 327; but his successors have asserted the right, and frequently exercised it; The Heart of Oak, Crawford, 1 W. Rob. Ad. 215; The Cognac, Ewen, 2 Hagg. Ad. 386. 4 Deguilder v. Depeister, 1 Vern. 263; and see The Cognac, Ewen, 2 Hagg. Ad. 377. This is also the rule of the Roman law. Nihil interest, trajectitia pecunia sive periculo creditoris accepta sit, an post diem præstitutum et conditionem impletam periculum esse creditoris desierit; utrobique igitur majus legitima usura non debebitur; sed in priore quidem specie semper, in altera vero discusso periculo, Dig. 22. 2. 4, and see ibid. fr. 5; Cod. 4. 33. 2. See post, c. iv. 6 The Duke of Bedford, Morris, 2 Hagg. Ad. 295; The Bonaparte, Ander sen, 3 W. Rob. Ad. 298; The Royal Arch, Kenney, 1 Swab. Ad. 269, 276; Perhaps I might put the proposition more widely," per Dr. Lushington, Ibid.; see post, p. 51, n. 2. 7 The Hero, Howard, 2 Dods. Ad. 143; The Kennersley Castle, 3 Hagg. Ad. 1. 8 The Alexander, Tate, 1 Dods. Ad. 278, 280; The Augusta, De Bluhn, 1 id. 283. This is by no means a settled point, however, in the United States. The Court of Appeals in one case held, in the most absolute terms, that "no authority could be, or ought to be, shown that hypothecation can be made to a consignee;" Liebart v. The Emperor, Hopk. 163; and, Rucher v. Conyngham, 2 Peter's Ad. 295, 307; Read v. The Commonwealth, Ins. Coy. 3 Johns. 352, are cases in the same direction. A contrary doctrine is favoured in the cases of The Lavinia v. Barclay, 1 Wash. C. C. 49; Ross v. The Active, 2 id. 226; and in a Massachussetts case, reported by Mr. Justice Story, in a note to Abbott (Amer. ed.), 219, it was held that a bond given to the agent of the charterers, in the name of the charterers, was valid. The Hebe, Hampton, 2 W. Rob. Valid bottomry, it is now known, may be created by the Where master in the country, even of his owner's residence, Lord Stowell, and afterwards Dr. Lushington having sustained such bonds; but it was under circumstances of inevitable necessity in which there was no power of communicating with the owner.' It seems, however, that such a bond is not valid if it be granted by, or with the consent of the owners of a British ship preparing in a British port for a new voyage. Bottomry is not valid in this country unless it be effected by Instrument of Bottomry. Ad. 146, 150, and see The Roderick Dhu, 1 Swab. Ad. 177. La Ysabel, Bozzo, 1 Dods. Ad. 273; The Trident, Simson, 1 W. Rob. Ad. 99; See Wallace v. Fielden, 7 Moore, P.C. 398, 409; Wilkinson v. Wilson, 8 Moore, P. C. 459. In the one case the country was filled with war, and in the other the owner was dead, and his estate insolvent, post, c. iv. per Lord Holt, C. J., in Johnson v. Shippen, 2 Ld. Raym. 982, 983; and by Lawrence, J., in the case of Busk v. Fearon, B. R., M. T. 44 Geo. 3. This case is shortly reported in 4 East, 319; but this dictum of the learned judge is not noticed. Ex relatione Abbott. This view of the law has been adopted by the present very learned Judge of the Admiralty in The Royal Arch, Kenney, 1 Swabey, 269, 276. The case before him was of a bottomry bond made at the port of New York by the master with consent of his owners, who resided at Liverpool, in Nova Scotia, the vessel's home port. Dr. Lushing ton says: "It appears to me, that under all ordinary circumstances, it is not competent to the master, with the consent of the owner, to grant a valid bottomry bond upon a British ship lying in a British port for a new voyage, such bond to be suable in this Court. It may be that I might put the proposition more widely, but it is sufficient for the present case to state it with these limitations. I am of opinion that a bond such as I have now described, would not be valid, so as to be sued upon in the Admiralty Court, and I 2 think so for the following reasons: First, because such a bond would create, if valid, what may be termed a secret lien on the ship, without, what the law would consider, necessity, and the consequence would be, that subsequent bona fide mortgagees might be injuriously affected. In early times such bonds would or might be used to cover usurious transactions; fortunately, all such useless restrictions are now removed. But at the present time it is clearly the policy of the law, that no liens on the ship should be created which do not appear on the face of the ship's papers. Now, whether this reasoning be good or bad, the authorities show that this Court has no jurisdiction when the bond is executed in the country of the owner before the beginning of a voyage. Contracts of bottomry made by the owners themselves in this country, at the beginning of a voyage, by the terms of which the ship is pledged as a security, cannot be enforced in the Admiralty Court against the ship. In the American courts probably a wider jurisdiction is conceded. The next question for consideration is, whether a British vessel, having completed a voyage to a foreign port, a new voyage being contemplated, can be bottomried for the expences of repair or outfit with the consent of the owners, and whether such a bond can be sued on in the Admiralty Court. I must observe, that I see little difference between a bond executed by the owner himself, or by the master, with the express authority of the owner. The con Particulars. express contract reduced into writing.' There is no settled form of the instrument for effectuating this contract; sometimes it is a bond; at others in the form of a bill of sale, and at other times of a different shape. Whatever be the form, in the operative part should appear the occasion of borrowing, the sum borrowed, the premium to be paid for it, the ship, the voyage, the statement of maritime risk, and the hypothecation of the vessel, her apparel and furniture, for the loan. 2 As in the case of all written contracts, the intention of the parties to this instrument can only be collected from the writing. It is even advisable to state in it the occasion of the loan, notwithstanding that evidence of this is admissible dehors the instrument. But of the premium, as of the principal, it is the only admissible evidence, and either of them, not appearing there, is not recoverable. The voyage, unlike the premium, is essential to the contract; it ascertains the nature and extent of the risk undertaken, and in case of deviation followed by sent of the owner having been obtained, it appears to me not necessary to inquire whether the foreign port be or be not within any distance of his place of residence. I must candidly confess I know of no authority bearing directly upon the question. Upon the best consideration I can give this question, and assuming the ordinary requisites, such as want of credit, necessity, &c., to exist, I think that such a bond would be valid against the owners, and might be sued on in this Court." This case had been preceded by that of The Jenny, Bowack, 2 W. Rob. Ad. 5, before the same learned judge, raising the same question, but the owners not appearing to contest it, a decree was made in favour of the bond. Mr. Justice Story, in his edition of Abbott, refers to several cases in the individual States in favour of the English doctrine, that a bottomry bond executed by the owners in the country where they dwell is cognisable only by the common law courts of the same country, see page 189, note; and states that he knows of no case in which the question had been decided by the Supreme Court, p. 206, note; but in the case of The Draco, 2 Sumner, 157, 174, 178, afterwards before himself, that learned judge upheld the validity of such a bond, and asserted the jurisdiction of the Admiralty Court with regard to it. A shipbuilder hypothecated a ship that was to be built, but not then commenced, and the bond was sustained as valid, The Hull of a new ship, Davies (Amer.) Rep. 199. 1 The Zodiac, Scott, 1 Hagg. Ad. 320, 325; per Holt, C. J., Justin v. Ballam, 1 Salk. 34; 2 Ld. Raym. 805, S. C. 2 "Bottomry bonds are the creatures of necessity and distress, and may be expected, therefore, to assume different shapes, which cannot be limited except by the condition of a faithful and beneficial discharge of the authority exercised on granting them, as being necessary for the preservation of property;" per cur. The Kennersley Castle, 3 Hagg. 7; Simonds v. Hodgson, 3 B. & Ad. 50, 57. 3 The Emancipation, Tucker, 1 W. Rob. Ad. 124, 128. total loss, secures for the lender, notwithstanding, the fruits. of his venture; the voyage, therefore, must be described in the instrument. If the ship is employed in the Government service, and, therefore, liable to be sent away on a new iter by the public authorities, all that the master can do in that case he ought to do, that is, describe the voyage as nearly as he can;' but it is no objection to the bond that it is for the outward voyage only. It is also essential to the contract that it appear by the instrument to be founded on maritime risk; it is enough, however, if that fact can be collected from the whole of the document taken together. The ship, being the lender's only security, should manifestly appear by the instrument to be hypothecated; but to the entire exclusion of any personal liability on the part of the owners; since any attempt to include this also, must fail, and may, perhaps, invalidate the instrument in respect of the other.' It is no objection to the validity of such a bond that it was Collateral given with bills of exchange for the same debt, and by way of Security with collateral security; payment of the bills in that case being a discharge of the bond." Bills. A contract of this sort being a chose in action, is not assign- Instrument able by the common law of England so as to enable the negotiable. assignee to sue upon it in his own name, or to set off the amount against a demand upon himself in the courts of common law. But such an assignment is available both in the equity courts and the Court of Admiralty. It is questionable, however, whether a demand arising out of such a contract can Ad. 283, 288; The Tartar, Tharp, 1 6 The Nelson, Brown, supra; The 7 The Rebecca, Maddick, 5 C. Rob. |