BY MASTER IN FOREIGN PORT.

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Bottomry bonds may be effected by the master in a foreign port, and by the merchant in a foreign or home port. As agent for the owners, a master can only execute a bond in case of necessity; as either when he is without funds or credit of his owner, or funds of his own at his command, or having no personal credit in the foreign port. Of course the owner may enter into these contracts either at home or abroad; as he may unquestionably mortgage his vessel or any other personal property to secure a loan, which he might desire to effect at any time or place. But the master can only do so abroad, and in an emergency.

When a bottomry bond is made by the master in a foreign port, no presumption exists in law, that the needed repairs or supplies could have been procured, upon reasonable terms, by the personal credit of the owner, independent of the act of the master, in hypothecating the ship; and, therefore, it must appear affirmatively, by evidence aliunde, that the giver of the bond acted within the scope of a master's authority; and that the repairs and supplies for which the loan was advanced, were needed to secure a successful prosecution of the voyage, or the ultimate safety and wellbeing of the ship itself. 1 Wheat. 96, The Aurora.

The master is the confidential agent of the owner; and is so held out to the commercial world by his owner's act of confiding to him the command of his vessel. His employment vests in him, for the time, great and almost absolute authority in the owner's absence; he is intrusted with momentous interests; and the law maritime accords to him a wide latitude of discretion on occasions of distress, danger, and embarrassment.

In the exercise of either authority or discretion, thus

168

WHEN AND FOR WHAT ADVANCES

conferred upon him, no master should be unmindful of the duties devolved on him by his owner at home, or expected from him by merchants abroad.

Without a necessity, the master, in a foreign port, cannot execute a bottomry bond, bill of sale, or other document, which would be deemed valid by a court of admiralty.

A bottomry bond cannot be given for an antecedent debt; but may be given to secure a loan advanced to cover necessary expenses to complete the voyage, or to preserve the ship.

A master does not act within the scope of his authority, if he procures advances for himself, and not for the owners or their enterprise. He must do it under some constraint of present distress, or of apprehended disaster.

If there be any fraud or collusion in the inception of a bottomry contract, its future execution will not be upheld, and in admiralty it cannot be enforced.

While care and caution are indispensable on the part of the master, diligence and vigilance are also essential on the part of the foreign merchant (be he agent, consignee, or stranger), to make the proper inquiry as to the necessity and intended use of any advances about to be made to the master on bottomry.

The foreign merchant, financier, or broker, by previous investigation, should inform himself of all the circumstances supposed or alleged to make a loan necessary. And if he make the advances desired, he should be vigilant in getting a proper document from the master, containing all proper allegations of distress, risk, vessel, interest, time for payment of principal and interest, and other averments, which may be requisite to

BONDS VALID, IN PART, UPHELD.

169

enable a court of admiralty to pronounce for the validity of his bond. Negligence in this respect may be fatal to his future claim at the port of destination, or the home port.

And should fraud in the master, or unfairness in the lender appear, the latter may forfeit all claim to reimbursement of his loan, or other legal rights under his contract.

In these contracts, however, a part may be adjudged invalid, and another portion of them may be pronounced valid. The rule, void in part avoids the whole, does not invariably apply to bottomry contracts; qualified judgments may be rendered, condemning pro tanto a contract as partly invalid, and pronouncing for the residue, and this principle is well settled by ample authority, and rests on solid foundations.

If the master may hypothecate the ship, he may, for a like cause, hypothecate the freight. See The Gratitudine, 3 Rob. 240; The Zephyr, 3 Mason, 34; and The Packet, ibid. 255. And if freight be pledged, the whole freight for the voyage is pledged, and not merely such portion as may be earned from the port of refuge to the port of discharge. The Zephyr, 3 Mason, 34.

The lender on bottomry loses his loan if the vessel be lost; or, unless she safely arrives at her port of destination and discharge.

But if the vessel reaches home, or, from her own inherent defect, or the mariner's or master's fraud or fault, or from any peril not enumerated, she is lost, then the loan and marine interest must be restored to the lender by the borrower. 3 Kent, 354. And for this, not only is the property pledged, but the lender

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LIEN ATTACHES, WITHOUT POSSESSION.

may hold the borrower personally responsible. Ibid. 355, and The Packet in 3 Mason, 255. If, after the principal shall have become due, any delay in its payment occurs, the loan and maritime interest may be consolidated; thus constituting one principal, upon which a common interest is recoverable from the time when the original loan became due, until the time when it is repaid.

In case of non-payment within the prescribed time for payment, it may be enforced by a decree of the Admiralty Court, ordering a sale by the marshal, and from the proceeds, the bottomry bond will first be liquidated; if that be not the only lien on the thing hypothecated, but other and mixed claims are exhibited, they must be so presented, that they may be weighed and considered separately. The Aurora, 1 Wheat. 96; The Packet, 3 Mason, 255.

Should exorbitant maritime interest be reserved or exacted, judicial discretion will be exercised to control, and (if necessary) to reduce the amount. For it is plain that these contracts may be entered into under such circumstances that undue advantage can be taken by an unscrupulous lender, even if the loan be made to the owner himself. The Zodiac, 1 Hagg. 320.

In speaking of hypothecation of ship, freight, or cargo for a loan, the property is said to be pledged as security for the loan; but unlike other liens, these are unaccompanied with any change of possession; that remains the same and continues in the owner; but the lien inheres, coheres, and adheres to the hypothecated thing until the ship's arrival home; unless she be lost by reason of some of the enumerated perils or some inherent defect rendering her unseaworthy, or from some fault or misconduct of the master or mariners.

BOTTOMRY CONTRACTS DIFFER IN FORM.

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Bottomry is a species of insurance, more frequently resorted to formerly than at the present day; for now the works of Emerigon, Park, Marshall, Phillips, Hughs, and other eminent writers, have exhibited insurance not only as a well-recognized branch of law in this commercial age, but also as a system and science of modern jurisprudence. Prior to its being so systematized by these writers, and such magistrates in England and America as Mansfield and Marshall, bottomry contracts were much resorted to, and many cases (since that of the Gratitudine, so elaborately discussed by the bar and bench in the early days of Lord Stowell), have been carefully considered and decided, so that now the chief features and leading principles of the law applicable to hypothecations are measurably mastered and made known to the commercial world.

And this is quite desirable, as the contract of bottomry requires no fixed form of instrument for the signature of the borrower; it varies in different countries, and sometimes in different parts of the same country. Beside, in these contracts, professional aid is not always sought for, but merchants prepare such instruments for themselves. The mould, in which their form is usually cast, varies therefore according to the training of different counting-rooms: some are comprehensive, and embrace all the legal requisites of a bottomry contract, while others may be defective; valid in part and in other parts invalid; the admiralty courts usually sustaining and pronouncing for what they can equitably, without actually disregarding any important principle of maritime law.

Perhaps no better brief definition is found than that of Mr. Justice Story, in the case of the Draco (2 Sumn.