Part III. As to freight. 10. Extent to which Freight and Cargo may be pledged. Wherever the master may pledge the ship, he may pledge the freight also. The master of a Hamburgh ship being at Baltimore, and about to sail for Cork, executed a bottomry bond, purporting to bind the ship and her freight in general terms, neither expressly confined to the freight of the present voyage, nor extended to future adventures. The ship sailed to Dublin instead of Cork, and thereby the holder of the bond lost the opportunity of instituting proceedings upon it at that time, and the freight was accounted for to the owners, though the deviation did not appear to have been made with this view. From Dublin the ship sailed again to America, and from thence to London, at which latter place the holder procured the ship to be sold under the authority of the Court of Admiralty; and the produce being insufficient to discharge the bond, he petitioned the court to have the freight of the last voyage applied to that purpose. The freight was then in the hands of the agents of the owners. It was objected, that such a bond created a lien upon the freight of the existing voyage only; but the learned judge of the court, adverting to the fact of the freight of both voyages having come to the account of the owners, granted the prayer of the petition, at the same time desiring "not to be understood as laying down any general rule applicable to all circumstances and all cases, where any third party might have become interested in the freight of the subsequent voyage" (a). In the case of the Prince Regent, decided by Lord STOWELL, a bond had been given on the ship and cargo only, not mentioning the freight. The ship and cargo were arrested, but the freight was paid over to other parties before anything was done at the instance of the bondholder. The ship proved insufficient to pay the bond, but the cargo was ample for that purpose. Lord SrowELL decreed that the bondholder should be paid the balance of the proceeds of the ship, wages deducted, and be put in possession of the cargo, so far as was necessary for the full payment of the bond. The owner of the cargo prayed a monition against the owners of the freight, who rested their defence on this, that the freight was not bound, not being named in the bond; and that as the freight could not be arrested at the suit of the bondholder, he could only proceed against the ship. Lord STOWELL required the freight to be brought in, and decided that the ship and freight must be exhausted before resort was had to the (a) The Jacob, 4 Rob. 245. As a general rule freight to be earned in a subsequent voyage cannot be included in a bottomry bond; as by the very nature of a bottomry bond the person who takes it is to become liable for the maritime risk, and, therefore, nothing can be hypothecated except some thing which is in danger of perishing by maritime risk. In this case it was held that the bond being bad as to the freight did not make it entirely bad. Smith v. Bank of New South Wales, 41 L. J. Ad. 49; the Karnak, L. R. 2 P. C. 505, 514. cargo (b). Where there are several bonds, some binding the ship Chap. 3, and freight, others the ship, freight, and cargo, the Court of Admiralty will marshal the assets, directing one claim to be satisfied from the cargo, and another from the ship and freight (c). Not so if it can only be done by violating a rule entitled to preferential observancefor where there were three bonds, the earliest on ship and freightthe next on ship and cargo-and the last on ship and cargo, and the value of ship, freight, and cargo was insufficient to pay all, it was held that the last must be paid out of ship and freight, without resort to the cargo, until they were exhausted, though the earliest bond was thus left without any fund against which recourse could be had for its payment. "The question," said Dr. LUSHINGTON, "is whether the court ought to compel the holders of the last bond to resort to the cargo. If the holders of the last bond, which is upon ship and cargo, have the same and equal right to proceed against the cargo as against the ship and freight, I should be disposed to hold that in equity they should be compelled to proceed against both, and in aid of the other bonds to resort in the first instance to the cargo. But I apprehend, upon the authority of the Prince Regent, and the reasoning of Lord STOWELL'S judgment in the Gratitudine, the holders of the last bond have no such right against the cargo; they cannot make the cargo answerable until the ship and freight have been exhausted. The owners of the cargo have a perfect right to avail themselves of the principle of that decision. They have a right to say that by law the cargo cannot be touched till the ship and freight have been exhausted. They are strangers to all previous bonds on ship and freight. The result is, that the owners of the last bond who are entitled to priority are thrown on ship and freight exclusively" (d). It has been held also in that court, that freight earned from subshippers of goods, by permission of the charterers of the whole ship, is liable as against them in payment of a bottomry bond, given at the port of the charterers, for advances subsequent to the charterparty (e). Where a bottomry bond on freight has been given, and the ship by which the freight is to be carried is lost in a collision with another ship, from which the owners of the first ship recover in a limitation of liability action instituted by the wrong-doing shipowners, among other damages a sum in respect of freight, the bondholder is entitled to receive from the shipowners recovering the damages such an amount of freight as equals the sum lent by the bond, or a proportionate amount according to the amount of freight recovered (f). And before the Judicature Acts it was held a good plea to the further maintenance of an action in a common law court for freight, (b) The Dowthorpe, 2 Wm. Rob. 80. As to freight being incident to the ship, see Leslie v. Guthrie, 1 Scott, 683; Stephenson v. Dowson, 3 Beav. 342. (e) The Trident, 1 Wm. Rob. 29; the Constantia, 4 Ecc. & Mar. cases, p. 512. (d) The Priscilla, 1 Lush. 1; the Edward (e) The Eliza, Weddell, 3 Hagg. A. R. 17. Part III. that the defendants, in a proceeding on a bottomry bond for less As to cargo. than the amount of the freight, which had been instituted in the Court of Admiralty after the commencement of the action, were monished to bring, and did bring, the freight into that court, to abide its judgment (a). [The value of the ship and freight, supposing the ship to reach the place of destination, may sometimes be thought an insufficient security for the amount of the expenses of the repairs, &c., necessary to put the ship into a condition to proceed with its cargo, and perform the voyage. In such a case of necessity it has been always held, that the master, if he cannot otherwise obtain money, may sell a part of his cargo to enable him to convey the residue to the destined port (b); and it has been decided in the Court of Admiralty, that the master may hypothecate the cargo as well as the ship and freight (c). An Imperial ship, coming from the Mediterranean with a cargo of fruit to London, was driven into Lisbon to refit. An estimate and survey were made under the authority of a court at Lisbon, and it was declared by the surveyors that the ship was of sufficient value to warrant the repairs. The sum for which the deed of hypothecation was executed exceeded the estimate of the ship in its damaged condition, and of the freight, by a sum which was supposed to be about equal to the charge that would fall upon the cargo for unloading, warehousing, &c. The ship arrived at London, and the loan not being discharged, the creditor instituted a suit in the Court of Admiralty against the ship and cargo. The ship produced considerably less than its estimated value, on account of its being a foreign ship, and the impossibility of obtaining a register for it. It was admitted that the question as to the validity of the hypothecation of the cargo had never been actually contested and decided in this country; but several precedents of proceedings in the court upon similar cases were found among the records of the court, and it was agreed that the practice of hypothecating the cargo in such cases was frequent among merchants. It did not appear whether or no the master had an opportunity of sending the cargo by another ship; but the learned judge of the court held, that according to all the] (a) Place v. Potts, 8 Exch. 705; 10 Ex. (b) [So where money is necessary to dis- (c) [The Gratitudine, 3 Rob. Rep. 240.] See also the Lord Cochrane, 8 Jurist, 714, and 1 W. Rob. Adm. Rep. 312. If the value of the ship and freight be insufficient to satisfy the claim of the obligee of a bottomry bond, by which the ship, freight, and cargo have been hypothecated, the owner of the cargo will be liable to contribute to the repayment of the loan, and also to the cost of proceedings in Admiralty to enforce the bond; but inasmuch as it was the master's duty, as agent of the ship. owner, to repair the ship, the shipowner will be liable to be sued by the owner of the cargo, on an implied promise to indem nify him against the consequences of the acts of the master. Benson v. Duncan, 3 Ex. 644. Benson v. Chapman, 6 M. & G. 792; 5 C. B. 330; 8 C. B. 950. The Olivier, 31 L. J. Ad. 137; Lush. Ad. 484; Lloyd v. Guilert, 6 B. & S. 100; L. R. 1 Q. B. 115, post. Before hypothecating the cargo, it is necessary, when practicable, to communicate with the owners. Bonaparte, 3 Wm. Rob. 301. See Williamson v. Wilson, 18 L. J. 161; 8 Moo. P. C. C. 459; Nuova Loanese, 17 Jur. 263. The Onward, 42 L. J. Ad. 61. The [authorities on the subject of transhipment, the master was not bound Chap. 3. to tranship; and thinking, upon a view of all the circumstances of the case, that the master had acted for the best, according to the appearance of things at the time, decided that the hypothecation of the cargo was valid, considering the hypothecation of the whole to be, both in its principle and in the consequences that might ordinarily result from it, exactly analogous to the sale of a part. On account of the great importance of the question, the learned judge invited the parties to bring it by appeal before another tribunal.] The cargo, however, to be bound by a bottomry bond, must be on board at the time of its execution; until it is on board, the master has no authority to deal with it in any way (d). Bottomry bond upon ship, freight, and cargo, with a covenant by the master rendering himself personally liable: freight and proceeds of ship insufficient to satisfy the bondholder and the masters claim for wages and disbursements:-Held, that the master must be paid out of the freight and proceeds in priority to the bondholder (e). 11. Respondentia. In bottomry, ship, freight, and cargo may be hypothecated-in respondentia, cargo only. Until recently there was no record of a decision on a respondentia bond by the Court of Admiralty, but on the case arising, the learned judge of that court entertained no doubt of his jurisdiction (f). It was held also in that case-the bond covering in part property not exposed to maritime risk-that it was bad as to that part, but valid as to the residue; and that where part only of goods hypothecated by a respondentia bond reaches its destination, such part is only liable to pay a proportional part of the money secured by the bond according to the proportion borne by the goods brought to their destination, to the total value of the property on which the bond was given. (d) The Jonathan Goodhue. Swab. 355. (e) The Edward Oliver, 36 L. J. Ad. 13; L. R. 1 Ad. 379. This question arose between the master and the owners of the cargo, et per Dr. LUSHINGTON. "There is no reason why the owners of cargo should be benefited at the expense of the master, for the master, though he may have bound himself for the payment of the bond to the holders thereof, has made no such contract with the owners (f) Cargo ex Sultan, Swab. 504. See Part III. -- CHAPTER IV. OF THE BEHAVIOUR OF MASTER AND MARINERS; AND HEREIN, SECT. 1. Of the Master's Duty to his Employers, p. 122. 2. Of Offences committed by Master and Mariners, of his duties respecting them and his general duties on board Ship. Authority of Master to correct the Mariners, p. 124. 3. Regulations of Foreign Ordinances as to disposal of Ship's Provisions, p. 130. 4. Of Breaches of Duty by the Mariners. Desertion, Mutiny, Disobedience, &c., p. 130. 1. Of the Master's Duty to his Employers. [THE great trust reposed in the master by the owners, and the great authority which the law has vested in him, require on his part and for his own sake, no less than for the interest of his employers, the utmost fidelity and attention; for if any injury or loss happen to the ship or cargo by reason of his negligence or misconduct, he is personally responsible for it; and although the merchant may elect to sue the owners, they will have a remedy against him to make good the damages which they may be compelled to pay. So, if he make any particular engagement or warranty without a sufficient authority from his owners, although the owners may be answerable to the persons with whom he contracts, by reason of the general power belonging to his situation and character, he is in like manner responsible to the owners for the injury sustained by them in consequence of his acting beyond, or in violation of, the particular authority given to him (a). He is bound also to employ his whole time and attention in the service of his employers, and the performance of the duties of his particular character, and is not at liberty to enter into any engagement for his own benefit that may occupy any portion of his time in other concerns; and therefore, if he do so, and the price of such engagement happen to be paid into the hands of his owners, they may retain the money, and he cannot recover it from them. This is well illustrated by the following case :-The master of an English ship, being at Smyrna, entered into an agreement with the deputy commissary of an English army to let the ship to government for six months; and having stipulated that his owner should receive forty shillings per ton per month, he required that he himself should be allowed the usual primage; the commissary refused to make any] (a) [Fletcher v. Braddick, 2 New Rep. Company, 1 P. & D. 103; and post, "Collision." |