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 (a) 3 Kent Com., 164; per Lord Stowell, The Atlas, 2 Hagg. 48, 53 et seq.; The Hero, 2 Dods. 139; 2 Bl. 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. Bottomry. Respon dentia." Who may hypothecate. The master. 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. (ƒ). § 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. (k) The Atlas, 2 Hagg. at p. 58; Abbott, 13th ed. 175. Instances occurred in The Cargo ex Sultan, Swab. 504; La Constancia, 4 N. of C. 285; and The Cargo ex Galam, B. & L. 167. (1) See below. (m) Per Lord Stowell, The Jane, 1 Dods. at p. 464. (n) The Orelia, 3 Hagg. at p. 85. and does not derive his authority to act as such from the owner; (g) Who may and where the ship has lost her master by death, for example, or hypothecate. capture, a bond given by the mate, (r) or the British Consul at a foreign port, (r) has been upheld. A bottomry bond may be given in a foreign country for the The owner. necessities of the voyage, and without the concurrence of the master, by an owner who is on board the ship, and who cannot in any other way raise the necessary funds. And such a bond would, as in the case of ordinary bonds, supersede a former mortgage and even former bottomry bonds of the same species.(8) A master who has ceased to act, cannot, at any rate after the appointment of his successor, give a valid bond.(t) To whom a bottomry bond may be given. § 421. If the circumstances in which the ship is placed are such as to justify the giving a bond, it may be given to any person who is competent to contract, and who bona fide consents to provide the money, repairs, or supplies which are required for the necessities of the ship, upon the security of such bond. For example, the bond is not invalidated because it was given to an agent of Ship's agent. the owner, if it is clear that the agent has not taken advantage of his character as such to obtain a bond which need not have been given.(u) If the agent has given the master fair notice that he will not make any further advances as agent, and has afforded him an opportunity of trying to get money elsewhere; and if the master is unable to do so, and is obliged to come back to the agent for a supply, the latter is fairly at liberty, like any other merchant, to advance the money on a security that is satisfactory to himself. It is no part of the agent's duty to advance money to the owners, without a fair expectation of being reimbursed.(x) But inasmuch as it is his duty as agent to protect the ship from all improper charges, a bond which is given to an agent will be examined by the Court with the utmost care, because in such a case the agent and lender are blended into one, and the owner is deprived of the protection he had a right to expect.(y) A bond may equally be given, under proper circumstances, to Consignee of the consignee of cargo at a foreign port, and is not invalidated by cargo. (1) The Kennersley Castle, 3 Hagg. 1; The Rubicon, 3 Hagg. 9; The Zodiac, 1 Hagg. 320; The Tartar,1 Hagg. 1. (r) Parmeter v. Todhunter, 1 Camp. 541. (rr) The Cynthia, 16 Jur. 748. (8) The Duke of Bedford, 2 Hagg. 294, 304. (t) 1 Parsons, Sh. 141. (u) The Royal Arch, Swa. 269; The Hero, 2 Dods. 139; The Lord Cochrane, 2 W. Rob. 320, 331; The Oriental, 3 W. (a) Per Lord Stowell, 2 Dods. at p. 204. (y) Per Dr. Lushington, The Royal Stuart, 2 Spinks, 258, 260. As to what inquiries the lender on bottomry. should make before he can safely take a bond, see infra $ 442. Person who the fact that there is at the same port a consignee of the ship, if the necessary funds cannot be obtained from him; (2) nor by the fact that the consignee of cargo to whom the bond is given has under stress of necessity himself appointed the master who has appointed gives it. (a) So a bond has been upheld which was given to a merchant who having been left in charge of the ship by a former master when dying, appointed his successor, who afterwards gave the bond.(b) the master. sonal credit. Person already A person, who has already advanced money to the master, under advances on per- upon the personal security of the owners, is not thereby disqualified from taking a bond if it is given for further advances made, not on mere personal security, but either on an express promise by the master that a bond shall be given, or on the security of his lien on the ship. If a bond be given to such a person, both for his previous advances on personal security, and also for further advances, it may be valid in regard to the latter, although it would be invalid in regard to the former.(c) Owner's But a valid bond cannot be given to a person, who, at the debtor cannot time he made the advance, in respect of which it is given, is indebted to the vessel or to her owners in respect of her. take bond. Nor persor. who knows ship has credit. Nor part owner. Such a person, before he can advance on bottomry and take a bond, is bound to discharge his debt.(d) Nor can a valid bond be given to a person who knows that the master has at the port, either a general credit, or an empowered consignee, or an agent, who is willing to supply the master's wants. But it has been said that, if the money was advanced and the bond given, bonâ fide and in such ignorance of the ship's credit, as could not be removed by reasonable inquiry, the Court will endeavour to uphold the bond.(e) Nor is its validity affected by the fact that at the port where it was given a debt was due to the owners, if the master could not obtain payment of it.(ƒ) In America it has been held that a bond given to a part owner, which binds the shares of the other part owners for repairs with maritime interest, is not valid.(g) § 422. The contract of bottomry must be in writing, (h) but 4th ed. 577. Mr. Maclachlan says (Merchant Sh. 1st ed. p. 160), "By the law of England, as settled for 200 years, it is a condition of valid bottomry in a foreign country, that it be effected by means of a duly executed instrument in writing. The ignorance of a foreign lender has, accordingly, never been allowed by the Court of Admiralty to cure the invalidity, in this respect, of his claim in the nature of bottomry on an English vessel, notwithstanding it may have been good and valid by the lex loci contractus, and by the general maritime law." |