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Owner of ship may hypothocate.

When master may

cate ship.

United States Ins. Co., 2 Johns. Cas., p. 250. In White vs. Cole, 24 Wend., pp. 116, 126, it was remarked by Judge Cowen, that contracts of bottomry ought to be confined to vessels navigating the ocean, or its great navigable arms; and that they ought not to be permitted upon vessels employed upon the lakes. But this view was disapproved by Senator Verplanck, in delivering his opinion in the Court of Errors, upon the reversal of the decision of the Supreme Court.-See Cole vs. White, 26 Wend., pp. 511, 515. This Chapter makes no distinction between ships employed in inland and in ocean navigation in this respect. The only practical objection to allowing a bottomry contract upon an inland ship, is in the danger that excessive interest may be exacted. Sufficient protection against this is afforded by the provision of Sec. 3022, post, by which the rate of interest agreed on by the parties may be reduced by the Court whenever it appears unjustifiable or exorbitant.

3018. The owner of a ship may hypothecate it or its freightage, upon bottomry, for any lawful purpose, and at any time and place.

NOTE." Owner may hypothecate ship or freightage for lawful purpose."-The Brig Draco, 2 Sumn., pp. 157, 186; Greely vs. Waterhouse, 19 Maine, p. 9; Sloop Mary, 1 Paine, C. C., p. 671; Thorndike vs. Stone, 11 Pick., p. 183; see the Duke of Bedford, 2 Hagg. Adm.. p. 294. "At any time and place."-The Brig Draco, 2 Sumn., p. 157; Sloop Mary, 1 Paine, C. C., p. 671. In England the Admiralty law may be otherwise.— See the Royal Arch, 1 Swab. Adm., pp. 269, 276. Bottomry contracts in Europe are usually made by the master in a foreign port, and so to a great extent in this country. "But in this country they are frequently made by the owner himself in the home port."-Pars. Merc. Law, pp. 341, 342.

3019. The master of a ship may hypothecate it

hypothe- upon bottomry only for the purpose of procuring repairs or supplies which are necessary for accomplishing the objects of the voyage, or for securing the safety of the ship.

NOTE. "The most common contracts of bottomry are those entered into by the master in a foreign port when money is needed and cannot otherwise be obtained."-Pars. Merc. Law, p. 341. "Therefore the

security goes with the ship and the debt may be en-
forced as soon as it is payable against the ship wherever
the ship may be."-Id.; also p. 339, id., n. 3. "In
Europe contracts of bottomry are seldom made other-
wise now."-Id.; The Virgin, 8 Pet., p. 538; Ross vs.
Ship Active, 2 Wash. C. C., p. 227; The Aurora, 1
Wheat., p. 96; The Edmond, 1 Lush. Adm., pp. 57,
211; The North Star, id., p. 45; The Prince George, 4
Moore P. C., p. 21; see, also, The Orelia, 3 Hagg.
Adm., p. 75; The Boston, 1 Blatchf. & H. Adm., p.
309; The Alexander, 1 Dods. Adm., p. 278; The Tar-
tar, 1 Hagg. Adm., p. 1; The Brig Ann C. Pratt, 1
Curtis, C. C., p. 340; affirmed, 18 How. U. S., p. 63.
The master is the only person beside the owner who
can hypothecate the ship.-See note to Sec. 3020, post.
In Blain vs. The Charles Carter, 4 Cranch, p. 328,
Chase, J., said: "A bottomry bond made by a master
vests no absolute indefeasable interest in the ship,
*** but gives a claim upon her which may be expe-
ditiously enforced." This lien is held next in interest
to that of seamen's wages.-See Madonna D'Idra, by
Sir Wm. Scott, 1 Dods. Adm., pp. 37-40.

3020. The master of a ship can hypothecate it Same. upon bottomry only when he cannot otherwise relieve the necessities of the ship, and is unable to reach adequate funds of the owner, or to obtain any upon the personal credit of the owner, and when previous communication with him is precluded by the urgent neces sity of the case.

NOTE. "The master has the whole care and supreme
command of his vessel," *** and "is principally
the agent of the owner." "Much of his authority as
agent of the owner springs from necessity; so he may
make a bottomry bond which shall pledge her for a
debt."
"All these, however, he can do only
from necessity."-Pars. Merc. Law, pp. 375-6. If the
owner is present or within easy access he has no such
power; nor in the home port is the owner liable for
them unless he ratifies in some way the acts of the
master, but in a foreign port he may make owner liable
to those who do not know his power to be superseded
by the presence of owner. And in Ward vs. Green, 6
Cow., p. 173, though owner on board as supercargo, the
master's contract regarding freight made owner liable.
The master is the only person beside the owner who
can hypothecate the ship.-The Orelia, 3 Hagg. Adm.,

When master

may hypothecate freight

money.

p. 75; The Kennersley Castle, id., p. 1; The Tartar, 1 id., p. 1; The Boston, 1 Blatchf. & H., p. 309; The Ann C. Pratt, 1 Curt. C. C., p. 340; affirmed, 18 How. U. S., p. 63; The Alexander, 1 Dods. Adm., p. 278; The Jane, id., p. 461. With regard to the necessities of the case, see The Gratitudine, 3 Rob. Adm., pp. 196, 266; The Nelson, 1 Hagg. Adm., p. 169; The Gauntlet, 6 Notes of Cas., p. 370; 3 W. Rob., p. 82. When unable to reach funds of owner or obtain personal credit. See Tunno vs. Sloop Mary, Bee Adm., p. 120; Ship Packet, 3 Mason, p. 255; Ross vs. Ship Active, 2 Wash. C. C., p. 226; and see Walden vs. Chamberlin, 3 Wash. C. C., p. 290; The Medora, Sprague, p. 138; The Virgin, 8 Peters, p. 538; The Saxe Coburg, 3 Hagg. Adm., p. 387. When urgent necessity precludes communication with owner, see The Olivier, Lush. Adm., p. 484; La Ysabel, 1 Dods. Adm., p. 273; Arthur vs. Barton, 6 M. & W., p. 138. This is the only test, and it is immaterial whether the ship is in a home port or a foreign one, if the master was really unable to communicate with the owner.-The Trident, 1 W. Rob., p. 29; The Ysabel, 1 Dods. Adm., p. 273. But it has been held in the English Privy Council that the master must not only communicate the fact of his distress, but must also communicate his intention to make a bottomry bond.The Oriental, 7 Moore P. C., p. 398. And communication must be made by telegraph, if that is possible, and the master cannot wait for an answer to a letter by mail.-Ib. It seems that these last cases, as well as the text, is more explicit as to powers of the master, and more restrictive than the authorities first cited supra.

STRINGENT NECESSITY, that which appears to be the only means of saving the ship, authorizes master to sell, and under stringent necessity he may pledge her by bottomry, but this may be much less than that required for a sale.-See Pars. Merc. Law, pp. 376, 377; see Brig Sarah Ann, 2 Sumn., p. 215.

3021. The master of a ship may hypothecate freightage upon bottomry, under the same circumstances as those which authorize an hypothecation of the ship by him.

NOTE.-See note to preceding section; The Packet, 3 Mason, 255; The Zephyr, id., p. 341; and the case cited in preceding note, Ward vs. Green, 6 Cow., p. 173.

interest.

3022. Upon a contract of bottomry, the parties Rate of may lawfully stipulate for a rate of interest higher than that allowed by the law upon other contracts. But a competent Court may reduce the rate stipulated when it appears unjustifiable and exorbitant.

NOTE.-See definition of "bottomry bond," Bouvier L. Dict.; also, notes to Secs. 3019, 3020; The Atlas, 2 Hagg. Adm., pp. 48, 58; The Cognac, id., p. 377; Sharpley vs. Hurrel, Cro. Jac., p. 208; see Simonds vs. Hodgson, 3 B. & Ad., p. 57; The Huntley, 1 Lush. Adm., p. 24; The Zodiac, 1 Hagg. Adm., pp. 320, 326; The Heart of Oak, 1 W. Rob., p. 204. "The lender may require and the borrower pay more than lawful interest on a bottomry bond without usury."-Pars. Merc. Law, p. 340. On page 342, id., it is said advances on bottomry bonds are made by the owner himself in the home port: "And sometimes they are nothing more than contrivances to get more than legal interest." "If such a contract were obviously and certainly merely colorable, and a pretence for getting usurious interest, the Courts would probably set it aside; but it might be difficult to show this."— Id. "Usurious" (as usury is not recognized in our Codes) is comprehended by the terms "unjustifiable" or exorbitant," in the text.

66

3023. A lender upon a contract of bottomry, made by the master of a ship, as such, may enforce the contract, though the circumstances necessary to authorize the master to hypothecate the ship did not in fact exist, if, after due diligence and inquiry, the lender had reasonable grounds to believe, and did in good faith believe, in the existence of such circumstances.

NOTE.-See note to Sec. 3020, ante, and the case of Ward vs. Green, 6 Cow., 173, there cited; see this subject, Pars. Merc. Law, pp. 378, 379, et seq., and notes; Conard vs. Atlantic Ins. Co., 1 Peters, p. 386; 4 Wash. C. C., p. 662; see Carrington vs. Pratt, 18 How. U.S., p. 63; Thomas vs. Osborn, 19 id., pp. 22, 31; Soares vs. Rahn, 3 Moore P. C., p. 1; Walden vs. Chamberlain, 3 Wash. C. C., p. 290; The Prince of Saxe Coburg, 3 Hagg. Adm., p. 387; The Orelia, 3 id., pp. 84, 86; The Nelson, 1 id., pp. 169, 176.

39-vol. ii.

[blocks in formation]

Stipulation for personal liability void.

When money

be repaid.

3024. A stipulation in a contract of bottomry, imposing any liability for the loan independent of the maritime risks, is void.

NOTE.-Stainbank vs. Sheppard, 13 C. B., pp. 418, 444; The Nelson, 1 Hagg. Adm., p. 169; compare The Tartar, id., pp. 1, 13. But a bottomry bond may be given as collateral security for a personal obligation.The Emancipation, 1 W. Rob., p. 124; The Augusta, 1 Dods. Adm., p. 283.

3025. In case of a total loss of the thing hypotheloaned is to cated, from a risk to which the loan was subject, the lender upon bottomry can recover nothing; in case of a partial loss, he can recover only to the extent of the net value to the owner of the part saved.

When

bottomry loan

becomes due.

Botttomry

lien, how lost.

NOTE.-Lender can recover nothing in case of total loss of thing hypothecated from risk to which it was subject. The Brig Draco, 2 Sumn., pp. 157, 191; Thorndike vs. Stone, 11 Pick., p. 183; The Atlas, 2 Hagg. Adm., p. 48; Bray vs. Bates, 9 Metc., p. 237. And in case of partial loss, he can recover only to the net value to the owner of the part saved.-Code de Com., p. 327. Such is the usage in New York. The capture and sale of a ship is not a total loss within this section, if its proceeds are restored.-See Appleton vs. Crowninshield, 3 Mass., p. 448.

3026. Unless it is otherwise expressly agreed, a bottomry loan becomes due immediately upon the termination of the risk, although a term of credit is specified in the contract.

NOTE. "If the money is payable at the end of a certain voyage, and the owner or his servant-the master-terminate the voyage sooner, either honestly from a change in their plan, or dishonestly by an intentional loss on wreck," Parsons in his Merc. Law, p. 342, says, "the money becomes at once due."-The Brig Draco, 2 Sumn., pp. 157-193; 2 Emerigon "Traité á la Grosse," Chap. 8, Sec. 4.

3027. A bottomry lien is independent of possession, and is lost by omission to enforce it within a reasonable time.

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