abandon the policy, and must withdraw formally from the illegal contract whilst a locus penitentiæ remains (i).

In most of the cases noticed above, the policies were silent Where there as to the return of premium; it not unfrequently occurs, how- are express stipulations. ever, that the parties expressly stipulate that the premium shall be returned if a particular event happens; in these cases the right of the assured to a return of the premium depends upon the terms of the particular contract (k). In other cases, where the policy has contained no such stipulation, but an established usage on the subject has been proved, the assured have been held entitled to recover back the premium in accordance with it (7).

(i) Palyart v. Leckie, 6 M. & S. 290. The decisions as to the right to recover the deposit on illegal wagers will be found to illustrate the principles mentioned above. See Aubert v. Walsh, 3 Taunt. 277; Lancassade v. White, 7 T. R. 535, a case which must be considered to be overruled by the later authorities, (see Howson v. Hancock, 8 T. R. 575; Aubert v. Walsh, and the judgment of Bayley, J., in Hastelow v. Jackson, 8 B. & C. 225); Gatty v. Field, 9 Q. B. 431; Varney v. Hickman, 5 C. B. 271; Hampden v. Walsh, 1 Q. B. D. 189; Bateson v. Newman, 1 C. P. D. 573. See also Taylor v. Chester, L. R., 4 Q. B. 309.

() Where the premium was to be returned if the ship was "sold or laid up," it was held that there must be such a permanent laying up as put an end to the policy. Hunter v. Wright, 10 B. & C. 714. See as to the effect of a stipulation that the premium is to be returned if the ship sails with convoy, Audley v. Duff, 2 B. & B. 111; Simond v. Boydell, 1 Doug. 268. In the latter case the policy was goods, and the premium was returnable if the ship "sails with convoy and arrives;" it was held that the ship was bound to sail with convoy, but

on

not to arrive with convoy; and that it
was sufficient that the goods arrived,
although they did not arrive safely,
there being no warranty as to their
condition. "Arrived means "at the
ultimate port of destination." Kellner
v. Le Mesurier, 4 East, 396; see also
Dalgleish v. Brooke, 15 East, 295;
Leevin v. Cormac, 4 Taunt. 483. This
would seem to apply to the case which
commonly now occurs, in a time policy
there is a stipulation for a return of
premium on arrival."

If the ship arrives, the premium must be returned, although she has been captured and re-captured, and the assured have been obliged to pay salvage. Aguilar v. Rodgers, 7 T. R. 421. Where the insurance is on goods, and the plaintiff recovers for a total loss, he cannot also recover for a return of premium for convoy, for the premium is added to the invoice price of the goods in calculating the total loss. Langhorn v. Allnutt, 4 Taunt. 511.

(1) Long v. Allan, 4 Doug. 276; Stevenson v. Snow, 3 Burr. 1237. See also Baines v. Woodfall, 28 L. J., C. P. 338, which was the case of a fire policy on a ship.

CHAPTER VIII.

HYPOTHECATION AND SALE.

HYPOTHECA

TION.

HYPOTHECATION is a contract of pledge, whereby, in consideration of money advanced for the necessities of the ship, the vessel, freight or cargo, or two, or all of these, are made liable for its repayment, provided the ship arrives in safety.

The contract is usually effected by an instrument in writing called a bottomry bond (a), by which the master binds himself in a penalty to repay the sum borrowed, and also professes to assign the ship and freight, or cargo, as the case may be; with a condition that the bond shall be void if the money secured be repaid within a certain time after the safe arrival of the ship at her port of destination. This instrument is generally executed under seal, or it may be merely in the form of a written agreement, signed by the master or owner (6). When the cargo

(a) It is so called because the keel or bottom of the ship, pars pro toto, is pledged. Scarborough v. Lyrus, Latch, 252; Noy, 95; Beawes, Lex Merc. 117; and The Atlas, 2 Hagg. 53. See also generally Pritchard's Admiralty Digest, tit. BOTTOMRY; Williams and Bruce's Admiralty Practice, Ch. III.

(b) See The Cecilie, 5 P. D. 211; The Eppis, L. R., 6 A. & E. 2. Sometimes the hypothecation is effected by an instrument, not in the form of a bond, which is called a bottomry bill. See The D. H. Bills, 4 P. D. 32.

Where a bottomry bond contained a clause which provided that the obligation should be void if the obligor should pay, in consequence of the loss of the ship, such an average, as by custom would have become due on the salvage: it was held that this clause did not apply where the ship remained in specie, though constructively lost within the meaning of a policy of insurance. The Great Pacific, L. R., 2 P. C. 516; Broomfield v. The Southern Insurance Co., L. R., 5 Ex. 192.

alone is hypothecated, the instrument is properly called a respondentia bond; but that term is not always used; the expression bottomry bond being sometimes employed, whether the vessel or her cargo be the security (c). This species of

contract was unknown to the common law of this country, since by it no pledge of a chattel was valid, unless the article pledged was actually transferred to the possession of the pawnee (d). The right to hypothecate was, however, recognized by the civil law, and has been long adopted by the maritime law of England as administered formerly in the Court of Admiralty, and now by the Admiralty Division (e).

form of con

tract required.

It is not necessary if the essential requirements of the con- No particular tract of bottomry are complied with, that the instrument of bottomry, whether it be in the form of a bond or not, should be drawn up in any particular form of words, and in practice the provisions in instruments of bottomry will be found to vary according to the circumstances of each case or the country in which they are executed.

(c) See 2 Park on Ins. 615. The term bottomry bond is commonly made use of whether the instrument in question pledges the ship, or cargo, or both of them. It is used, therefore, throughout this chapter in this general sense. Hypothecation of the cargo only is now of comparatively rare occurrence. See the judgments in The Atlas, 2 Hagg. 58, and in The Cognac, ib. 386; and Edward's Treatise on the Jurisdiction of the High Court of Admiralty, 91. See also The Cargo ex Sultan, Swa. 504; The Cargo ex Galam, Br. & L. 167. The Admiralty jurisdiction and practice is founded, so far as the lender is concerned, on the same principles in cases of bottomry and respondentia. See the judg

ments of Sir C. Robinson in The Cognac, 2 Hagg. 386, and of Dr. Lushington in The Cargo ex Sultan, Swa. 510. As to the rate of interest payable in respect of the delay between the date when a bottomry bond falls due and the time of its payment, see The D. H. Bills, 4 P. D. 32; The Sophia Cook, 4 P. D. 30 and infra, p. 572. By the French law, money may be advanced at maritime interest either on the body, tackle, apparel, ordnance, munition, or stores of the ship, or on the cargo, or on all of these. See the Code de

M.P.

Comm. Art. 315. Where the money
is advanced on goods the borrower is
not discharged by the loss of the
ship and cargo, unless he proves that
he had goods on board to the extent
of the money borrowed. Ib. Art. 329.

(d) Bridgeman's case, Hob. 11; Cor-
set v. Husley, Comb. 135; Ryal v.
Rolle, 1 Atk. 175; Reeves v. Capper, 5
Bing. N. C. 136.

(e) Justin v. Ballam, 1 Salk. 34. See also the judgments of Lord Hardwicke in Burton v. Snee, 1 Ves. sen. 155, and of Lord Stowell in The Gratitudine, 3 Rob. 255, and in The Hero, 2 Dods. 140. By the 7 Geo. 1, stat. 1, c. 21, s. 2, contracts made by English subjects upon loans by way of bottomry on ships in the service of foreigners designed to trade within the limits of the East India Company's charter, were made void. This act is repealed by the Statute Law Revision Act, 1867. See also The India, Br. & L. 221, where it was held that it was repealed by implication. By the 19 Geo. 2, c. 37, s. 5, loans on bottomry upon ships belonging to English subjects bound to or from the East Indies, were required to be made only on the ship or cargo, and to be so expressed in the bond. This section is now repealed by the Statute Law Revision Act, 1867.

00

The following copy of a bottomry bond on ship, freight and cargo will, however, show the nature of the provisions usually adopted.

Know all men by these presents that I,

ship

unto

of

of

master of the

of the port of London, am well and firmly bound

of lawful British money, to be paid to the said or their certain attorney or attorneys, executors, administrators or assigns, for which payment to be well and truly made, I bind myself, my heirs, executors and administrators, and also the said vessel, her tackle, apparel and furniture, and the freight to be earned on her now intended voyage from and also the cargo shipped on board the said vessel firmly by these presents sealed with my seal. Dated this

in the year of our Lord 18 Whereas the said vessel lately arrived at

port of

to

day of

aforesaid, and being in want of funds necessary to

enable her to proceed on her voyage from

aforesaid to

aforesaid, whither she is bound, and now about to go,
and without which funds she cannot proceed on her now in-
tended voyage, and the said
in order to be enabled to

procure such necessary funds aforesaid, and for the lawful and
necessary disbursements and expenses of the said vessel at
aforesaid, hath requested the said
to lend them the sum

of

hath

for the aforesaid purposes, and the said accordingly lent the said sum for the aforesaid services on the hazard and adventure of the said vessel in her said intended voyage from

Now the condition of the above obligation is such, that if the said vessel do and shall with all reasonable and convenient speed sail from aforesaid on her said intended voyage to aforesaid, and that without deviation (the perils, dangers, accidents and casualties of the seas and navigation excepted), and if the above-bounden his heirs, executors or administrators, or the owners of the said vessel, do and shall within seven days after the said vessel shall arrive at

aforesaid,

well and truly pay or cause to be paid unto the said
their attorney, executors, administrators or assigns, the said
sum of
of lawful British money, together with per
cent. bottomry premium thereon, or if on the said voyage the

said vessel shall be utterly lost, cast away, or destroyed in consequence of fire, enemies, pirates, storms or other the unavoidable perils, dangers, accidents or casualties of the seas or navigation to be sufficiently shown or proved by the said

his executors or administrators, or by the owners of the said vessel, their executors or administrators, then the above-written bond or obligation to be void, otherwise to remain in full force and virtue.

Having signed two bonds of the same tenor and date, the one of which being accomplished, the other to be void and of no effect.

Signed, sealed and delivered by the said presence of

notary public (ƒ).

The owner is entitled to hypothecate his ship,

in the

and he may By and to The master, tomry bonds

whom bot

do so without the concurrence of the master (g). also, may, under certain circumstances which will be stated may be given. shortly (h), hypothecate the vessel, freight, or cargo. For this purpose it is not necessary that he should be the registered master (i); he possesses this power if he is the ostensible

(f) See also the forms of bonds set out in the reports of the following cases: The Gratitudine, 3 Rob. 240, and App. No. IV. (cargo); The Atlas, 2 Hagg. 49 (ship and freight); The Mersey, 3 Hagg. 404 (ship and freight); The Heligoland, Swa. 491 (ship); The Hero, 2 Dods. 139 (ship, cargo, and freight), where the bond proceeded on was executed at Liverpool; and Broomfield v. The Southern Insurance Company (The Great Pacific), L. R., 5 Ex. 192, where the defeasance of the bond is alone set out. For forms of bottomry bills, see The Elpis, L. R., 4 A. & E. 1; The D. H. Bills, 4 P. D. 32; The Cecilie, 4 P. D. 210; The Empusa, 5 P. D. 6. Other forms of bottomry bonds and bills are to be found in the Appendices to Kay's Masters and Seamen, and in Brook's Office of a Notary, 1876. Bottomry bonds are usually, where circumstances admit, executed in the presence of the consul of the State to which the ship belongs, or of a notary public, who certifies to their due execution. There is no special provision in the Stamp Act, 33 & 34 Vict. c. 97, respecting bottomry or respondentia; but it is provided by the schedule to that act that instruments for the sale, transfer,

or other disposition, either absolutely
or by way of mortgage or otherwise
of any ship or vessel, or any part,
interest, share or property of or in
any ship or vessel, shall be exempted
from all stamp duties. The question
whether a bottomry bond executed in
this country is exempted from stamp
duty under this last provision or is
chargeable with duty as a bond
appears not to have been decided.
(See 33 & 34 Vict. c. 97, Schedule,
"Bond.")

(g) The Duke of Bedford, 2 Hagg.
294; The Royal Arch, Swa. 276; The
Heligoland, Swa. 491. See also Wills
v. Palmer, 7 C. B., N. S. 361; The
Draco, 2 Sumner (American) Rep.
157; The Mary, 1 Paine (American)
Rep. 671, in which it was held that
the right of the owner to hypothecate
is not limited, as that of the master
is, to cases of necessity. A master,
who is also part owner, has not on
that account any greater power to bind
his part owners. The Orelia, 3 Hagg.

75.