CASES DECIDED IN THE HIGH COURT OF ADMIRALTY OF ENGLAND, AND ON APPEAL TO THE PRIVY COUNCIL. THE PRISCILLA. Bottomry-Liability of Cargo-Marshalling of Assets. Where there is a creditor on two funds, and another creditor on one only of those funds, the assets will be equitably marshalled, if it can be done without violating a rule intitled to preferential observance. But cargo hypothecated cannot be resorted to for payment of any bottomry bond until ship and freight are exhausted. Where, therefore, there are two bottomry bonds, the first in date on ship and freight only, and the other or last bond on ship freight and cargo, and ship and freight are insufficient to discharge both bonds, the last bond, which is intitled to priority, must be paid out of ship and freight. The Prince Regent (a) followed; dictum in the Trident (b) overruled. B OTTOMRY. In September, 1858, the Priscilla, then lying in Constantinople, was chartered for a voyage to Odessa and thence to England; whilst lying at anchor there, she was run into by a vessel called the African, and to repair the damages, a bond (bond No. 1) was given on the ship and the freight to grow due on the chartered voyage. This bond was dated 12th October, 1858, and was for 500l. and interest. The Priscilla then sailed to Odessa and took in a cargo of peas for England. Shortly after leaving Odessa, she was forced to put back damaged by a gale, and a bond (bond No. 2) for 1207. was, on the 11th December, 1858, given on ship and cargo. The ship again sailed, and in the course of the voyage was obliged to be put into Syra to be (a) 2 N. of C. 272. (b) 1 W. R. 35. + L. 2 B 1859. November 3. December 2. 1859. November 3. repaired, and a bond (bond No. 3) for 2617. 1s. also on ship and Bond No. 1 (action against proceeds and freight) . £387 12 11 261 1 0 December 2. Judgment. Twiss, Q.C., on behalf of the holders of bond No. 3, now moved the Court to order the bond to be paid out of the proceeds of the ship and freight lying in the registry. Wambey, on behalf of the holders of bond No. 1, contrà.-If this motion is granted, the holders of the first bond will be altogether unpaid. The holders of the last bond have two funds to resort to, the holders of the first bond but one; the principle, therefore, of equitable marshalling of assets is applicable: Lanoy v. Duke of Athol (a); Aldrich v. Cooper (b); Dowthorpe (c); Constancia (d); Trident (e). The Queen's Advocate, for the owners of cargo.-As to bonds Nos. 2 and 3, the ship and freight must be exhausted before the cargo is touched: Prince Regent, reported in the Dowthorpe (f). As to bond No. 1, it was executed before the cargo was put on board, without the consent or knowledge of the owners of the cargo, and they never had any interest in that bond at all. DR. LUSHINGTON :-In this case there are three bonds in all pronounced for, and the balance of proceeds in the registry is clearly insufficient to discharge them all. The last bottomry bond, called bond No. 3, is dated the 13th January, 1859, at Hernopolis, in Syra. It states that the vessel was bound from Odessa to London with peas, and had been compelled to put into Syra. The ship and cargo are hypothecated, and the principal and interest now due upon the bond amount to 2611. 4s. It is admitted on all hands that this bond shall be paid first. The question is, out of what fund-the ship and freight, or the cargo. The bond next antecedent in date, called bond No. 2, was granted at Odessa on the 11th December, 1858, and purports to bind the ship and cargo. It appears that the ship had previously sailed from Odessa with her cargo, but had been compelled by stress of weather to put back. The principal and interest due upon this bond amount to 1207. The next antecedent, or first bond, (bond No. 1,) is dated Constantinople, the 12th October, 1858. This bond is upon the ship and freight, and is for a voyage from Constantinople to Odessa and England, the amount 5007., with 22 per cent. interest. The vessel was lying at Constantinople under charter for Odessa and England, and having been damaged by collision with the African was bottomried to repair damages. On arrival of the ship in London, the damages recovered for the collision, amounting to 2221. 7s. Id., were assigned to the bondholder in part liquidation of his claim. A motion is now made on behalf of the holder of bond No. 3, to be paid out of ship and freight. This is opposed on behalf of the holder of bond No. 1, who says that bond No. 3 should be paid out of cargo; and the motion is in turn supported by the owners of the cargo, who are clearly the parties really interested. The demands are, in round numbers, for the three bonds, 7681. The fund available from the proceeds of the ship and freight is 4107. The deficiency, therefore, if the cargo is not made at all liable, will be 3587. The sum due on the last bond (bond No. 3) is 2617. Assuming that it is paid out of the ship and freight, there will remain out of the ship and freight 1497. applicable to the discharge of bond No. 2. Bond No. 2 is for 1201., and therefore, for bond No. 1, there will remain only 291.; in fact, nothing at all, for the costs will have amounted to a very much larger sum than that small balance: bond No. I will be unpaid. The effect then of granting this motion, if a similar course is 1859. December 2. 1859. December 2. taken with bond No. 2, will therefore be that nothing will be left for the satisfaction of bond No. 1, and that the cargo will be Question to be wholly exonerated from any payment to any of the bonds. The substantial question, then, is, whether the cargo ought not to be made to discharge the two last-executed bonds, so as to leave a fund for the payment of the first-executed bond. decided. to considered. Now the cargo was not laden until November, 1858, after the execution of the first-executed bond, and previous to the other two. This circumstance would be perfectly fatal to the holders of bond No. 1 asking to be paid out of the cargo, which was not hypothecated to them; but they make no such demand; they only ask that the cargo shall be made applicable to the payment of bond No. 3, which does bind the cargo as well as the ship. Several cases were cited in argument, to which I Cases referred will now shortly advert. The first is the Dowthorpe (a). That was a most complicated case, raising many questions, and some of them of difficulty; but upon a consideration of all that is reported, it does not appear to me to have any stringent bearing on the present question. The dispute there was as to the payment of a bottomry bond on ship and freight, and certain other charges, as wages and pilotage; there was no reference whatever to any demands which could affect the cargo. The case is only useful for the present purpose as containing a report of the Prince Regent (b). The case of the Constancia (c) was also a most peculiar one. There were three bonds: first, on ship alone; second, on cargo alone; third, on ship alone. The case was brought on by motion only. The decision in that case cannot affect the present. If there were doubtful questions, they were whether the Court was right in giving preference to the first bond over the second, because the ship was not mentioned in the second bond; and whether the Court was right in holding the ship and freight tacitly hypothecated in the second bond: both very difficult questions, but not hujus loci. I see no reason to depart from what I said in that case, but I cannot apply it to the present. The Trident (d) was also cited. The main question in that case was wholly different from the present; it was whether a bond granted at Plymouth on a vessel belonging to an owner resident in Scotland was valid; but certain observations incidentally falling from the Court are reported at page 35, which have a bearing upon the present question. These observations did not apply to the main question, but had reference to an |