CHAPTER IV.

BOTTOMRY.

SECTION 1673. Bottomry, what.

1674. Owner of ship may hypothecate.

1675, 1676. When master may hypothecate ship.

1677. When master may hypothecate freight-money.

1678. Rate of interest.

1679. Rights of lender when no necessity for bottomry existed.

1680. Stipulation for personal liability, void.

1681. When money loaned is to be repaid.

1682. When bottomry loan becomes due.

1683. Bottomry lien, how lost,

1684. Preference of bottomry lien over other liens.

1685. Priority of bottomry liens.

what.

S1673. Bottomry is a contract by which a ship or Bottomry, its freightage is hypothecated' as security for a loan, which is to be repaid only in case the ship survives a particular risk, voyage, or period.2

1

Stainbank v. Sheppard, 13 C. B., 418, 441.

* The brig Draco, 2 Sumn., 157, 191; Thorndike v. Stone,
11 Pick., 183; Stainbank v. Sheppard, 13 C. B., 418;
Cole v. White, 26 Wend., 511; The Atlas, 2 Hagg.
Adm., 48. The fact that the terms of the bond
import a transfer of the ship, rather than a mere
pledge, makes no difference in the character or
operation of the contract (Robertson v. United States
Ins. Co., 2 Johns. Cas., 250).

In White v. Cole, 24 Wend., 116, 126, it was
remarked by Judge CowEN, that contracts of bot-
tomry 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 v. White, 26 Wend.,
511, 515). The commissioners have not thought it
necessary to propose any 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. Suf-
ficient protection against this is afforded by the
provision of section 1678, by which the rate of inte
rest agreed on by the parties may be reduced by the
court whenever it appears unjustifiable or exorbitant.

Owner of ship may hypothecate.

When master may hypothecate ship.

Id.

S 1674. The owner of a ship may hypothecate it or its freightage, upon bottomry, for any lawful purpose,1 and at any time and place.2

'The brig Draco, 2 Sumn., 157, 186; Greely v. Water

house, 19 Maine, 9; sloop Mary, 1 Paine, C. C., 671, Thorndike v. Stone, 11 Pick., 183; see the Duke of Bedford, 2 Hagg. Adm., 294.

The brig Draco, 2 Sumn., 157; sloop Mary, 1 Paine, C. C., 671. In England the admiralty law may be otherwise (see the Royal Arch, 1 Swab. Adm, 269, 276).

S 1675. The master of a ship may hypothecate it 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.

The Virgin, 8 Pet., 538; Ross v. Ship Active. 2 Wash C. C., 227; The Aurora, 1 Wheat., 96; The Edmond, 1 Lush. Adm., 57, 211; The North Star, id.. 45; The Prince George, 4 Moore P. C., 21; see also, The Orelia, 3 Hagg. Adm., 75; The Boston, 1 Blatchf. & H. Adm 309; The Alexander, 1 Dods. Adm., 278; The Tartar, 1 Hagg. Adm., 1; The brig Ann C. Pratt, 1 Curtis, C. C., 340; affirmed, 18 How. [U. S.], 63.

§ 1676. The master' of a ship can hypothecate it 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 necessity of the case.

1 The master is the only person beside the owner who can hypothecate the ship (The Orelia, 3 Hagg. Adm., 75; The Kennersley Castle, id., 1; The Tartar, 1 id., 1; The Boston, 1 Blatchf. & H., 309; The Ann C. Pratt, 1 Curt. C. C., 340; aff'd, 18 How. [U. S.], 63; The Alexander, Dods. Adm., 278; The Jane, id., 461). The Gratitudine, 3 Rob. Adm., 196, 266; The Nelson, 1 Hagg. Adm., 169; The Gauntlet, 6 Notes of Cas., 370; 3 W. Rob., 82.

Tunno v. Sloop Mary, Bee, Adm., 120; Ship Packet, 3 Mason, 255; Ross v. Ship Active, 2 Wash. C. C., 226; and see Walden v. Chamberlain, 3 Wash. C. C 290; The Medora. Sprague, 138; The Virgin, 8 Peters 538; The Saxe Cobourg, 3 Hagg. Adm., 387.

The Olivier, 1 Lush. Adm., 484; La Ysabel, 1 Dods.
Am., 273; Arthur v. Barton, 6 M. & W., 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., 29; The Ysabel, 1
Dods. Adm., 273). But it has been held, in the English
Privy Council, that the master must not only com.
municate the fact of his distress, but must also
communicate his intention to make a bottomry bond
(The Oriental, 7 Moore P. C., 398). And communi-
cation must be made by telegraph, if that is possible,
and the master cannot wait for an answer to a letter
by mail (Ib).

ter may

cate freight

$1677. The master of a ship may hypothecate When mas freightage upon bottomry, under the same circum- hypothe stances as those which authorize an hypothecation of money. the ship by him.

The Packet, 3 Mason, 255; The Zephyr, id., 341.

terest.

S1678. Upon a contract of bottomry, the parties Rate of in 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.

The Atlas, 2 Hagg. Adm., 48, 58; The Cognac, id., 377;
Sharpley v. Hurrel, Cro. Jac., 208; see Simonds v.
Hodgson, 3 B. & Ad., 57; The Huntley, 1 Lush. Adm.,
24; The Zodiac, 1 Hagg. Adm., 320, 326; The Heart
of Oak, 1 W. Rob., 204.

S1679. 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.

Conard v. Atlantic Ins. Co., 1 Peters, 386; 4 Wash. C. C.,
662; see Carrington v. Pratt, 18 How. [U. S.], 63;
Thomas v. Osborn, 19 id., 22, 31; Soares v. Rahn, 3
Moore, P. C., 1; Walden v. Chamberlain, 3 Wash. C. C.,
290; The Prince of Saxe Coburg, 3 Hagg. Adm., 387;
The Orelia, 3 id., 84, 86; The Nelson, 1 id., 169, 176.

Rights of no necessi

lender when

ty for bot

tomr

existed.

Stipulation for personal liability, void.

When money loaned is to be

repaid.

When bottomry loan becomes due.

Bottomry lien, how lost.

Preference of bottom

ry lien over

S1680. A stipulation, in a contract of bottomry, imposing any liability for the loan independent of the maritime risks, is void.

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

S1681. In case of a total loss of the thing hypothecated, from a risk to which the loan was subject, the lender upon bottomry can recover nothing;1 in case of a partial loss, he can recover only to the extent of the net value to the owner of the part saved.❜ The brig Draco, 2 Sumn., 157, 191; Thorndike v. Stone,

11 Pick., 183; The Atlas, 2 Hagg. Adm., 48; Bray a Bates, 9 Metc., 237.

2 Code de Com., 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 v. Crowninshield, 3 Mass., 448.

$1682. 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.

The brig Draco, 2 Sumn., 157, 193.

$1683. A bottomry lien is independent of possession, and is lost by omission to enforce it within a reasonable time.

The Virgin, 8 Peters, 538, 554; The Tartar, 1 Hagg. Adm., 1, 13; The Royal Arch, 1 Swab. Adm., 269, 282; Ship Charles Carter, 4 Cranch, 328; Leland v. The Medora, 2 Woodb. & M., 105.

S 1684. A bottomry lien, if created out of a real or other liens. apparent necessity,' in good faith, is preferred to every other lien or claim upon the same thing, excepting only a lien for seamen's wages,' a subsequent lien of materialmen for supplies or repairs, indispensable to the safety of the ship, and a subsequent lien for salvage.* A bottomry lien, created by the owner, without necessity, and without any reason for the lender to believe that the loan was necessary, has not a preference

1

3

over any prior lien (The Dunvegan Castle, 3 Hagg.
Adm., 331; see The Royal Arch, 1 Swab. Adm.,
269).

Madonna D'Idra, 1 Dods. Adm., 37, 40; Sydney Cove,

id., 1, 13; The Charles Carter, 4 Cranch, 328; The
Virgin, 8 Peters, 538; see The Mary Ann, 9 Jur.,
94; The Louisa Bertha, 1 Eng. L. & E., 665; 14 Jur.,
1006. This is true of wages earned before, as well
as after the bond is given (The Union, 1 Lush. Adm.,
128), and a third person, who at the master's request,
has advanced the seamen's wages, has the same right
of lien (The W. F. Safford, 1 Lush. Adm., 69), but an
owner has not (The Janet Wilson, 1 Swab. Adm.,
261).

'The Jerusalem, 2 Gall., 345; compare the W. F. Saf-
ford, 1 Lush. Adm., 69.

See The W. F. Safford, 1 Lush. Adm., 69.

bottomry

$1685. Of two or more bottomry liens on the same Priority of subject, the latter in date has preference,' if created liens. out of necessity."

'The Exeter, 1 Rob. Adm., 146; The Trident, 1 W. Rob.,

29; The Betsey, 1 Dods. Adm., 289; Leland v. The
Medora, 2 Woodb. & M., 113; Furniss v. The Magoun,
Olcott Adm., 66; The Duke of Bedford, 2 Hagg.
Adm., 294; The Priscilla, 1 Lush. Adm., 1.
The Dunvegan Castle, 3 Hagg. Adm., 331.

CHAPTER V.

RESPONDENTIA.

SECTION 1686. Respondentia, what.

1687. Respondentia by owner.

1688. Respondentia by master.

1689. Rate of interest.

1690. Obligations of ship owner.

S1686. Respondentia is a contract by which a cargo, or some part thereof, is hypothecated as security for a loan, the repayment of which is dependent on maritime risks.

In England a separate contract of respondentia is not
known (see La Constancia, 4 Notes of Cas., 285; 3
Kent Com., 354). And in this country, it is rarely
entered into by a shipmaster as such.

Responden tia, what.