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MARINE INTEREST; COMMUNICATION.
that the master might execute a valid bond only for repairs and necessaries for the home voyage, but not for charges on the outward voyage, and previously incurred.
In the Olivia (Lush. 484), the decision was in 1861, that when practicable, it was the master's duty to communicate with the owner. In the North Star (ibid. 45), a bond for general average was pronounced against as invalid. In the Kepler (ibid. 201), the bond was deemed valid, and referred to the registrar and merchants, by whom the costs of reference were allowed, but other costs disallowed. See also The Edmund, ibid. 211.
As to interest, where the premium is excessive, the court will refer it to the registrar. Lush. 24, The Huntley.
And if in the bond blanks are left to be filled as by agreement, the filling up will not be allowed by the court, but the usual interest is to be found by the registrar. Swab. 240, The Change.
As to commissions, only reasonable commissions are allowable. Swab. 177, The Roderick Dhu.
And where excessive commissions at St. Thomas were claimed, the claim was disallowed, and referred to the registrar. Lush. 115, The Glenmavera.
There are several cases in the first and second parts of Browning and Lushington, and the promised third part will, when published, include all the English decisions previous to November 1865. At this date, October 19, 1867, it has not been received in the United States.
In the first case (the Glenburn, Brown. & Lush. 62), the court refused to rescind a decree, pronouncing a bond valid, and consented to by a defendant, though the facts, according to a subsequent decision in the
Hamburg (Brown. & Lush. 253), might possibly raise a valid defense; the refusal to rescind was upon the ground that such defendant was in adequate possession of the facts when he consented to the default.
In the Gem of the Nith (Brown. & Lush. 72), the holder of a bond on ship, freight, and cargo, was held entitled upon default, to full freight, when the cargo was delivered to him, to satisfy the sum secured by his bond, with costs; and that the owner of the cargo has no right to demand a reference, although the master had sold part of the cargo before the bond was executed, and had applied the proceeds to the ship's expenses.
In the Cargo ex Galam (ibid. 167), a court of admiralty was held bound to recognize a possessory lien for freight and general average ; and the relative rights of ship-owners and shippers of cargo, right of detention for transhipping, and original parties in admiralty, are considered by Lord Kingsdown.
The Serafina (ibid. 277) was a Prussian bark, whose captain had given a bond for insurance premiums. Held, invalid.
In the Laurel (ibid. 317), a bottomry bond was upheld, wherein was expressed a maritime risk, though it did not contain any express provision for maritime interest. Although an advertisement is proper, yet a bond may be valid without it, previous to taking advances on bottomry. This, and S. C. p. 191, relates to liens growing out of transactions upon personal credit and in a port of refuge.
In the Hamburg (ibid. 253), it was held that the master is not obliged to tranship cargo, if, at the port of distress, the means for repairing are procurable.
The validity of a bond, payable in England, is triable
MASTER AS AGENT FOR OWNER.
by the general maritime law, as there administered, and not by the law of the ship's flag, or the lex loci where the bond was executed.
The master is agent for the owners, ex necessitate rei. But he cannot hypothecate cargo, if communication be practicable with the owners. The Bonaparte, 8 Moore, P. C. 459, explained.
Bottomry and hypothecation securities, then, are convenient commercial contracts, giving to the master generally (and in some exceptional cases to the agent or resident consul), the power to procure, in time of distress, the necessary funds to enable him to pursue and complete the owner's commercial enterprise.
Without some such expedient or power, many a marine undertaking might signally fail. The exigencies of commerce have long recognized the utility of these instruments, as well as the wisdom and policy of conferring upon the master the power of legally executing them when in a foreign port, remote from home and not within communicating distance with his owner.
Under such circumstances, the law implies that the master may borrow on bottomry to secure the loan so advanced.
A proper exigency however must exist for the exercise of such power, and its exercise may be justified when a pressing necessity therefor exists.
First. Where repairs or supplies are actually needed for the safety of the ship or prosecution of the voyage.
Second. The master must be without funds of bis own or his owners.
Third. He must be unable to procure funds, on his own personal credit, or that of his owner, at the port of necessity.
PREREQUISITES OF BOTTOMRY.
Fourth. If consigned, he must be unable to get ad. vances from, or through his consignee.
Fifth. The funds must be obtained by the master, without fraud or collusion with the lender or consignee, but with absolute good faith on his part ; and with the view either to save the voyage or prosecute the voyage.
Sixth. The lender must inform himself of the circumstances and exigency requiring resort to a marine loan, and –
Finally. Resort to bottomry is only admissible when no other resource or expedient seems promising or practicable.
In all bottomry bonds, an extra or maritime interest is permissible; and the absence of it renders the transaction suspicious.
These securities may be given and negotiated by the owner, the master, or his temporary substitute; or in case of death or disaster, by the resident foreign consul of the country to which the vessel belongs.
Many of the English and American cases to be referred to will be found in the text preceding; but other more recent authorities may be cited from 1 Eccl. & Adm. Reports, which contain English decisions from 1865 to 1867, being a regular series of reports from Browning and Lushington.
In the Mary Ann (1 Eccl. & Adm. Rep. 13), it was held, that transactions between the owner and mortgagee of the vessel, which might render the voyage illegal, could not invalidate a bottomry bond, given by the master to a bona fide lender, who has only to look to the facts
1. That the ship is in distress;
PRIORITY, PRIVILEGE AND
3. That the money to be loaned is required for necessary purposes.
In the Cornelia Henrietta (ibid. 51), that where bond-holders advance mariner's wages, no repayment will be sanctioned by the Admiralty Court, unless upon appropriate application made to it therefor.
But in the Fair Haven (ibid. 67), it was held, that bond-holders might in some instances pay prior charges, and repayment for small amounts would be allowed.
In the Edward Oliver (ibid. 379), the master was deemed entitled to precedence, and had priority over the claims of the holders of bottomry bonds.
As to priority in general, there are several aspects in which it may be viewed in reference to persons and property. As has just been seen, a master has priority over a bond-holder; the seamen also have a lien for their wages, which is to be preferred to all other liens,
, even those of lenders on bottomry; and the holder of a bottomry, which is latest in time, generally has priority over all other holders of bonds, which are of a prior date.
The reason for these distinctions are, that no bonds would avail lenders on bottomry unless the mariner could be protected and assured of his wages, without the apprehension of losing them by secret hypothecs or mortgages on the vessel ; and no subsequent loan could be negotiated, however great the distress and urgent the necessity, after a first or second loan had been effected, unless the latest lender could be reasonably assured of holding the hypothecated property by a lien, entitled to preference over all other former liens, except that of the seamen for their wages.
There are many English and American authorities