Where ship retains her character as such, sale viewed with suspicion. Incidental results of jus or materials, will not justify the master in selling.(c) And where the ship continues to retain the character of a ship, and to be capable of being used as such, with or without repairs, a sale is viewed by the Courts with suspicion, the master's duty being in general to proceed with the voyage if possible.(d) But the fact that the persons who purchased the ship were surveyors, who had been employed by the master to survey the ship, does not invalidate the sale, if the sale was absolutely necessary and perfectly bona fide.(e) § 414. A sale made by the master under circumstances of stringent necessity, but not otherwise, will not only bind the owners but will affect their underwriters with liability for a total underwriters. loss.(ƒ) tifiable sale: it binds Does not defeat prior liens. Authority to receive pay ment. Sale under the directions of a foreign Court. But such a sale, even when made under such necessity as to be binding on owners and underwriters, will not defeat prior mortgages or liens, whether arising out of bottomry, or otherwise.(g) Where the master has justifiably sold the ship, he has, as incident to his authority to sell, authority to receive the proceeds, or to order them to be paid to such person as he may think fit. And a bona fide payment to him or his order is therefore a good payment.(h) § 415. The ship is sometimes sold, abroad or at home, under a decree of a Court of Admiralty. If this decree is obtained in a proceeding in rem, from a Court having competent jurisdiction in the matter, and acting bona fide, it is valid and binding upon all Courts and all parties. (i) And it has been held that, as a general rule, if personal property is disposed of in a foreign country, in a manner which is binding according to the law of the country in which it is, that disposition is binding everywhere.(k) So that the innocent purchaser of a ship or of cargo, sold by the master abroad, under circumstances which do not give him, by the law of England, power to sell, may make a good title against the owners, if there was no fraud and if the sale was (c) Somes v. Sugrue, 4 Car. & P. 276; Park, Ins. 365. (d) Per Maule, J., Ireland v. Thompson, 4 C. B., at p. 168. (e) The Australia, Swab. 480; see, however, Hayman v. Molton, 5 Esp. 65. (f) Per Sir H. Keatinge, Cobequid, &c., Co. v. Barteaux, L. R. 6 P. C. 319; and see Read v. Bonham, 3 B. & B. 147; Cambridge v. Anderton, 2 B. & C. 691; Knight v. Faith, 15 Q. B. 649; Thompson v. Colvin, Ll. & Wels. 140; Mount v. Harrison, 4 Bing. 388. (g) The Catherine, 15 Jur. 231; The Nymph, Swa. 86; The Catharina, 1 Pritch. Ad. Dig. (ed. 1887) 824. And see as to liens, supra § 74. It is otherwise of a sale under a decree in rem of a competent court, § 415 inf. (h) Ireland v. Thomson, 4 C. B. 149. (i) The Tremont, 1 W. Rob. 163; The Attorney-General v. Norstedt, 3 Price, 97; The Helena, 4 C. Rob. 3; Castrique v. Imrie, 8 C. B. N. S. 405; L. R. 4 H. L. 414; 1 Parsons, Sh. 74. (k) Per Pollock, C.B., Cammell v. Sewell, 3 H. & N. 617; per Crompton, J., S. C. 5 H. & N. 744; per Bramwell, B., and Blackburn, J., Castrique v. Imrie, 8 C. B. N. S. 430; L. R. 4 H. L. 429. directed by a Court, which had competent jurisdiction in the matter, and was so conducted as to pass the property by the law of the country where the subject matter was.(1) If the ship is sold in a foreign port, in a manner which is not binding by the law of that country, and which is not under the circumstances binding by the law of England, no title to the ship will pass to the vendee, and his title under such circumstances will not be strengthened merely by the fact of a foreign Court of Admiralty having decreed the sale upon the petition of the master.(m) § 416. Before selling, the master must, as we have seen, do all in his power to rescue the ship; and if she is capable of being repaired, do all in his power to obtain money for that purpose; and where practicable communicate with the owners.(n) Sale under directions of a foreign Court. Master's duty before selling. In the case of a ship which is insured, it is the duty of the Whom to master, before selling, to consult the agent of the underwriters, consult; if there be one at the port of distress. And if there is a British consular agent there, the master should also consult him before selling. (0) It is his duty also before venturing to sell, to get faithful and accurate surveys taken of the actual position and to get surcondition of the ship.(p) But he cannot either shift his responsi- veys taken, bility upon, or share it with others, however much he may fortify his own conclusions, by resorting to the advice of skilled and experienced men.(g) He should take care to make minutes of all the steps he takes to procure money and to bring the ship to sale, and to transmit copies of these to his owners with his report. Whether he proceeds to sell the ship, or to give orders for repairs, he should carefully ascertain the amount of the damage, which has resulted from recent perils of the sea; and of the damage, which is attributable to other and older causes; and he should carefully preserve, as far as he is able to do, for the satisfaction of all, whose interests may be affected by his acts, the evidence which will enable them to distinguish the one from the other, and to thereby adjust their respective losses. The rule by which he should be guided, in any case of misfortune to his ship, is to do his best for the benefit of all concerned. § 417. When the validity of a sale of a ship is questioned by the owner, the burden of proving that the circumstances under (1) Cammell v. Sewell, 3 H. & N. 617; 5 H. & N. 728; and see supra § 264. (m) Reid v. Darby, 10 East, 143; The Fanny and Elmira, Edw. 117, 119; The Warrior, 2 Dods. 288, 293; The Segredo, 1 Sp. E. & A. 36, 57; cp. Hunter v. Prinsep, 10 East, 378; Morris v. Robin son, 3 B. & C. 196; Cannan v. Meaburn, (o) The Bonita, Lush. 252, 263; The (p) Hayman v. Molton, 5 Esp. 65. and distinguish new damages. from old Burden of validity is on proving purchaser. which it took place were such as to make it binding on the owner is thrown upon the first purchaser from the master. It is, therefore, of the utmost importance to the purchaser that he should, before purchasing, ascertain the authority under which the master acts, or the circumstances which render a sale imperatively necessary; and he will not be released from this proof, except where the ship has been sold by a foreign Court of competent jurisdiction.(r) (r) The Australia, Swa. 480; The Glasgow (otherwise Ya Macraw), Swa. 145; The Bonita, Lush. 252; see also The Margaret Mitchell, Swa. 382; Ridgway v. Roberts, 4 Hare, 106. thecation is. § 418. IT often happens that the ship is at a port at which What hypothe owners are unknown, and at which the master is a stranger; that necessities arise which are inexorable; and that the only hope of conducting the voyage to a favourable termination depends upon those necessities being promptly supplied. Under such circumstances as these, it has been the practice and law among maritime nations, probably since the time of the Romans, to permit the master to raise money, whereby to provide for the necessities of the ship, by giving a bond, pledging, or hypothecating, sometimes the ship and freight, and sometimes the cargo, by way of security to the lender, for the repayment of the principal sum advanced and maritime interest upon the same, if the ship shall arrive safe at the port of her destination. (a) By this contract, the master binds himself in a penalty to repay the sum borrowed, and also professes to assign the ship, or the ship and freight, or the ship, freight, and cargo,(b) or any one of these, as the case may be, with a condition that the bond shall be void, if the money with the stipulated interest or premium be repaid within a certain time after the safe arrival of the ship at her port of destination. (c) It is of the essence of the contract per Lord (a) 3 Kent Com., 164; Stowell, The Atlas, 2 Hagg. 48, 53 et seq.; The Hero, 2 Dods. 139; 2 BÍ. Com. 457; Maclachlan, 4th Ed. 53. (b) See The Gratitudine, 3 C. Rob. 240, 260 et seq. (c) Maude and Poll., 4th ed. 560; The Atlas, ubi sup. Sometimes the hypothecation is effected by a deed poll, which is not in the form of a bond, and which is called a Bottomry Bill: 2 Park on Ins. 869. that in the event of the ship being lost, the lender shall not be able to recover upon it. (d) This species of contract was unknown to the Common Law of this country. It differs from a pledge or pawn, in that a pledge or pawn of a chattel is not valid, unless the article pledged is actually transferred to the possession of the pledgee,(e) whereas property hypothecated remains in the possession of the person who hypothecates it. It differs also from a mortgage, because a mortgage transfers the property, whereas hypothecation gives only a right to be enforced against the subject of it, through the medium of process. (f) § 419. The contract of hypothecation is commonly called a bottomry bond; and this term is appropriate where the subject of it is the ship or freight, as the money is in that case borrowed on the security of the keel, or bottom of the ship. It is, however, not appropriate where the money is secured by hypothecation of the cargo only. In such a case the proper name of the transaction is respondentia.(g) It was formerly laid down authoritatively that in the latter case, owing to the necessity of goods being sold or exchanged in the course of the voyage, "the borrower only is personally bound to answer the contract," and "recourse must, for the most part, be had to the person only of the borrower." (h) According to the modern view, however, the whole difference between respondentia and bottomry is that in bottomry the ship is hypothecated either alone, or along with the freight and cargo or one of them, while in respondentia the cargo alone is hypothecated.(i) Hypothecation of the cargo alone is, however, of very rare occurrence.(k) § 420. The proper person to give the bond, at least in the absence of the owner, (1) is the master of the ship for whose necessities the money is required.(m) And a master, who is also part owner, has no greater power than a mere master to bind his co-owners by such a bond.(n) In proper cases of urgent necessity, the bond may be given by the ostensible master, who is exercising all the functions of that situation, (o) even although he be not the registered master,(p) (d) The Atlas, ubi sup.; The Eman- (e) Maude & Pollock, 561; per Parke, B., (h) 2 Park, Ins. 869; Abbott, 13th ed. |