the master may be therefore obliged to hypothecate the cargo as well as the ship. The owner of the cargo cannot usually insist on the repairs being done, for under the ordinary forms of charter-parties and bills of lading the shipowner is absolved from his contract to carry if prevented by the perils of the seas; but, on the other hand, it is the duty of the master, as the agent of the shipowner, to repair the ship, if there be a reasonable prospect of doing so at an expense not ruinous, and to bring home the cargo and earn the freight if possible (t). The shipowner, therefore, is bound to indemnify the owner of the goods against the consequences of the hypothecation. Thus, where the master of a ship damaged by sea perils hypothecated the ship, freight and cargo for the necessary repairs, and on her return to this country the ship and freight realized less than the sum advanced, so that the owner of a portion of the cargo was compelled to contribute towards the difference, and also to pay his proportion of the costs of a suit instituted in the Court of Admiralty by the obligee of the bond; it was held that the cargo owner might sue the owner of the ship on an implied promise to indemnify him against the consequences of the acts of the master (u). By the French law, the shipowner is absolved from further liability to the owner of the cargo if he abandon to him the ship and freight. Where goods were shipped at a foreign port in a French ship without any express stipulation, it was held that the owner might exercise this right, upon the ground that the rights of the parties to a contract are to be judged of by that law by which they may justly be presumed to have bound themselves, and that in the case before the Court was the law of France (x). The Court of Admiralty would not deal with a bond, as By what law a bottomry bond merely because it was held to amount to validity of an instrument of hypothecation in the country in which it mined. (t) Duncan v. Benson, 1 Ex. 537; 3 Ex. 644; Benson v. Chapman, 6 M. & G. 792; 5 C. B. 330; 8 C. B. 950. (u) Duncan v. Benson, 1 Ex. 537; 3 Ex. 644. It was held in this case, that a plea stating that the bond was executed by the master without the express authority of the shipowner, that when it was executed the costs of the repairs exceeded the value of the ship and freight, and that when the See (x) Lloyd v. Guibert, L. R., 1 Q. B. 115; see also Moore v. Harris, 1 App. Cas. 318. Power of master to give was given; and in no instance has a bottomry instrument been held valid by a Court of this country except where the requirements of the law of the tribunal have been complied with (y). Bills of exchange, drawn by the master on the owner as a collateral bills security for money advanced for the necessities of the ship, of exchange. cannot be treated as instruments of hypothecation, although they are accompanied by a verbal agreement that the ship is to be liable (z). But bills of exchange may be, and very commonly are, given at the same time with a bottomry bond as collateral securities for the repayment of the money lent; and when this is done the validity of the hypothecation is not affected (a). Advances must be made the bond. It is necessary that, at the time when the goods are supplied, on security of or the advances made, there should be an agreement that the price of the goods or the amount advanced should be secured by hypothecation (b). If the advances are originally made on personal credit, and no notice is given by the creditor that he intends to take a bottomry bond, a bond subsequently given to secure them will not be supported (c). If, however, the original agreement was for bottomry, a bond given subsequently is valid. (y) The Atlas, 2 Hagg. 54; see also The Hamburg, Br. & L. 253, and the Jaetano judgment of Willes, J., in Lloyd v. Guibert, L. R., 1 Q. B., at p. 125, and see ante, p. 565, n. (t); Ridgway v. Roberts, 4 Hare, 106. The law of France requires that the master, before he hypothecates the ship or cargo, shall obtain the authority of the "Tribunal de Commerce" if in France, or of the French consul or a magistrate if the master is in a foreign port. Code de Comm. Art. 234. By the English law there is no such requirement. () Ex parte Halkett, 3 Ves. & B. 135; 19 Ves. 474; The Augusta, 1 Dods. 283. (a) The Jane, 1 Dods. 466; Stainbank judgment in The St. Catherine, 3 Hagg. Ves. sen. 443, which has been supposed to be inconsistent with this rule, and the judgments of Lord Stowell in The Nelson, 1 Hagg. 176, and in The Atlas, 2 Hagg. 52. Where both a bill and bottomry bond were given, it was held that to entitle the bondholder to enforce his bond it was not necessary that there should have been such a dishonour of the bill as would give a right of action against a drawer or indorser, but that it was sufficient if reasonable steps had been taken to get the bill accepted and paid. Smith v. The Bank of N. S. Wales (The Staffordshire), L. R., 4 P. C. 194. (b) The Hersey, nomine Gore v. Gardiner, 3 Moo. P. C. C. 79. (c) See the judgment in The Augusta, 1 Dods. 287; The Nelson, 1 Hagg. 177; The Wave, 15 Jur. 518; The Gauntlet, 3 W. Rob. 82; The Indomitable, Swa. 446. In the absence of evidence, the foreign lender is presumed to make advances in contemplation of a bottomry security. Per Sir. R. Phillimore, The Karnak, L. R., 2 A. & E. 301; and see The Alexander, 1 Dods. 278; The Vibilia, 1 W. Rob. 12. If a portion of the money advanced was lent on personal credit, and the residue on the security of the bond, the Court will enforce the bond to the extent of the latter sum (ɗ). of contract. It is an essential part of the contract of hypothecation by Maritime risk the master, that the repayment of the money should be de- essential part pendent upon the ship's arrival at her destination (e). If the deed. makes the loan repayable at all events, the contract is invalid as an hypothecation (f). But as these instruments are the creatures of necessity and distress, and usually contain the language of commercial men and not of lawyers, they receive a liberal construction (g). It is not therefore necessary that the risk should be mentioned in express terms; it is sufficient if it can be fairly and reasonably inferred from the whole document that it was the intention of the parties to make the repayment of the money dependent on this contingency (h). where com voyage pre Where money was lent on bottomry under a bond which Right to paystipulated that the payment of the bond should be made after ment of bond the ship's arrival at a specified port, and the ship sailed on her pletion of voyage, but, owing to sea perils, was forced to put into an vented. intermediate port, where she was condemned as unseaworthy, it was held, the completion of the voyage after the risk had commenced having been prevented by an impossibility which the bondholder could not control, that the amount and interest secured by the bond had become due and payable (i). (d) The Augusta, 1 Dods. 283. The words "my arrival" and "my ship's arrival," have the same effect. The Cecilie, 4 P. D. 210. (f) The Indomitable, Swa. 446; Miller & Co. v. Potter, Wilson & Co., 3 Sess. Čas. (4th series), 105. See Stainbank v. Fenning, 11 C. B. 88; 13 C. B. 418; and The Serafina, Br. & L. 277. The owner may hypothecate the ship, and, if he chooses, make himself also personally liable. See the judgment in Willis v. Palmer, 7 C. B., N. S. 360. A bottomry bond may also, as we have seen, be given at the same time with and as a collateral security for bills drawn on the owners for the money borrowed. Stainbank v. Shepard, 13 C. B. 418; The Onward, L. R., 4 A. & E. 38. And see supra, p. 570. (g) See the judgment of Sir C. Robinson in The Kennersley Castle, 3 Hagg. 7; and the judgments in The Alexander, 1 Dods. 280, and The Vibilia, 1 W. Rob. 5. (h) Simonds v. Hodgson, 3 B. & Ad. 50; 6 Bing. 114; The Nelson, 1 Hagg. 169; see also the judgment in The Emancipation, 1 W. Rob. 130. In The Royal Arch, Swa. 269, it was held that the omission in a bottomry bond to state any premium for maritime risk, the rate of interest reserved being the ordinary interest only, was a circumstance of suspicion, but did not invalidate the bond. (i) The Dante, W. Rob. 429. If the maritime risk had not commenced, it seems the Court would not have decreed payment of maritime interest. Ib. See also The Empusa, 5 P. D. 6. Where the ship and freight are both bottomried, the ordinary rule is that the bond should, if the ship and freight belong to different persons, be paid rateably. The Dowthorpe, 2 W. Rob. 73. Meaning of "loss" in contracts of bottomry. Bonds may be in part good and in part bad. Interest that may be reserved. So also the bond becomes due if the voyage stipulated for is abandoned by the act of the shipowner or the master, without the consent of the bondholder (j). It would seem that where in an action for limitation of liability a sum of money is awarded as compensation for loss of freight to the owners of a vessel run down by the negligent navigation of the plaintiff's ship, the holder of a bottomry bond on the freight of the vessel run down is entitled to claim, in respect of the loan on bottomry, a proportionate part of the sum awarded for loss of freight (k). The loss of the ship, within the meaning of these contracts, is understood to be her actual destruction, or absolute loss to her owners. If she still exists, although in such a state of damage as to be constructively totally lost within the meaning of a policy of insurance (), or if she is captured, and afterwards re-taken and restored (m), she is not lost in the sense attached to that word in the contract of hypothecation. In policies of insurance on bottomry bonds, the word loss has the same effect and meaning as in the bond itself. Therefore an assured on a bottomry bond cannot recover in the case of a constructive total loss (n). The Court of Admiralty will support a bottomry bond as to part of the debt secured by it, although the residue may consist of a debt that cannot be covered by such a security (o). Upon a bottomry contract the lender may stipulate to receive any rate of interest. The contract was never liable to any objection on the ground of usury, for the principal is at hazard during the voyage (p). A bond is valid although it reserves no (j) The Heligoland, Swa. 499; The Catherine, 15 Jurist, 232. See also The Armadillo, 1 W. Rob. 256. (k) The Empusa, 5 P. D. 6, where the instrument of bottomry incorporated a provision that if there should be no payment of freight, either total or partial, the loan should not be paid back. (1) Thomson v. The Royal Exchange Assurance Company, 1 M. & S. 30; Stephens v. Broomfield (The Great Pacific), L. R., 2 P. C. 516. As to the probable meaning of "such an average as shall by custom be due on the bond," see The Great Pacific, ubi supra; The Elephanta, 15 Jurist, 1185. (m) Joyce v. Williamson, 3 Doug. 164. (n) Broomfield v. The Southern Insurance Company, L. R., 5 Ex. 192. (0) See The Augusta, 1 Dods. 283; The Hero, 2 Dods. 139; Smith v. Gould, 4 Moo. P. C. C. 21; The Heart of Oak, 1 W. Rob. 204; Dobson v. Lyall, 3 Myl. & Cr. 453, note; 2 Phill. 323, note. (p) Sharpley v. Hurrell, Cro. Jac. 208; Soome v. Gleen, Sid. 27; 2 Park on Ins. 622; and the judgment in The Cognac, 2 Hagg. 387. See the repealed acts of the 2 & 3 Vict. c. 36, and the 13 & 14 Vict. c. 56, and the 17 & 18 interest. In such a case the Court will allow interest at the usual rate of 4 per cent. (g). under duress. À bond given under actual duress is invalid, but a voluntary Bond given contract is not invalidated by reason of its being executed by the master whilst under arrest (r). Although the bottomry bond may purport to assign the ship Effect of the to the obligee, it does not transfer the property in her, but only contract. gives the bondholder a claim upon the ship or goods, which can be enforced by process of law (s). The contract of hypothecation, being a mere chose in action, was not assignable at common law. In the Court of Admiralty, however, it was always considered to be assignable, and proceedings might be taken on it against the ship by the person to whom it is transferred (t); and now, as we have seen, since the Judicature Act all choses in action are assignable (u). THE CON TRACT. The hypothecation of the ship binds the shipowners in- REMEDIES ON directly, but, unless they have themselves agreed to be personally liable, it does not render them liable to be personally sued, either in the Admiralty Division or in any other court (v). The remedy of the bondholder is either against the master himself, or against the property hypothecated (w). The master cannot, therefore, pledge the shipowner to the lender of the money Vict. c. 90, s. 1. The interest reserved by a bottomry bond is commonly called maritime interest. In the Roman law the contract was called fanus nauticum, or usura maritima, and the interest pretium periculi. See the judgment of Lord Stowell in The Atlas, 2 Hagg. 53. An excessive rate of interest may form the ground for impeaching a bond as fraudulent, but it does not otherwise affect its validity. The Laurel, Br. & L. 317. Where the interest is clearly excessive the Court may order it to be reduced. The Cognac, 2 Hagg. 377; The Huntly, Lush. 24. See also The Edmond, Lush. 211. (a) The Cecilie, 4 P. D. 210. See also The Royal Arch, Swa. 280; The Change, ib. 240. (r) The Heart of Oak, 1 W. Rob. 204; The Gauntlet, 3 W. Rob. 82. (8) See Johnson v. Shippen, 2 Ld. Raym. 982; the judgment in Stain bank v. Fenning, 11 C. B. 88; and the (t) See the judgment of Sir W. Scott (u) See supra, p. 337, note (a). (v) See Johnson v. Shippen, 1 Salk. 35; S. C., 2 Ld. Raym. 982; and the judgment in Benson v. Duncan, 3 Ex. 656. (w) See the judgment of Powell, J., in Trantor v. Watson, 6 Mod. 13. |