14th & 15th THIS was an appeal from a judgment of the High June, 1869. Court of Admiralty, pronounced in a case of The extent bottomry instituted by the Respondents, the holders rity conferred of a Bottomry Bond against the "Karnak," her on the Master freight and cargo. The Appellants were the Owners of the cargo.

of the autho

of a Vessel to

bind the Owners either

of the Ship or cargo, is derived from, and governed

by, the law of

The "Karnak," a Vessel of 267 tons register, George S. Locke, Master, was in the year 1866, at

* Present:-Lord Romilly (Master of the Rolls), Sir William the Flag; and Erle, Sir James William Colvile, and Sir Joseph Napier, Bart.

the existence

of the neces

sity which the Maritime Law requires to validate the hypothecation of the Ship and cargo by bottomry, is to be ascertained by evidence in the usual manner. The meaning of the term "necessity," in respect of hypothecation by the Master, being analogous to its meaning in other parts of the law.

The Master of a Vessel, chartered from Galveston, U.S., to Liverpool, received before sailing from the Charterer various sums in part payment of the freight, and after taking on board a cargo, sailed for the port of destination. The Vessel, having in the prosecution of her voyage met with bad weather, and suffered damage, put into Bermuda, where the Master incurred heavy expenses for repairs and supplies. The repairs were executed, and the supplies furnished, without any promise of a Bottomry Bond; but the law of Bermuda giving a right of arrest of the Ship to the Creditors for the repairs and supplies, the Master to complete the voyage, having written to the Agent of the Owners, of the Ship, and of the cargo, and not receiving any answer within the time

Galveston, in the United States of America, where, on the 21st of November, 1866, she was chartered to Messrs. Droege & Co., of Galveston, there to load a complete under-deck cargo of compressed cotton, and carry the same to Liverpool for freight, according to the original terms of the charterparty; the freight was payable after unloading and right delivery of cargo at Liverpool, with a commission of 5 per cent. on the freight, the Vessel being consigned to the order of the Appellants, Messrs. Droege & Co., of Manchester.

After the making of the charterparty, and whilst the Vessel was lying at Galveston, and before she departed on her voyage, the Appellants, from time to time, advanced to the Master, on account of the necessary disbursements, certain moneys, amounting in the whole to £632. 14s. 2d.; and it was agreed between the Charterer and the Master that such advances should be made and taken, pro tanto, in part payment of freight, and a receipt to that effect

1869.

DROEGE

v.

SUART.

The "Karnak."

an answer might have been returned, raised the funds necessary for the payment of such supplies on bottomry of the Ship, cargo, and freight. On a suit brought by the Assignees of the Bond, the owners of the Ship not opposing, the Court below pronounced for the validity of the Bond, so far as it regarded the Ship, cargo, and freight, and the Ship was thereupon sold, but produced a sum far less than sufficient to cover the sum due on the Bond. The Consignees of the cargo, who were also entitled to the freight, claimed to retain in their hands the amount of freight, with interest and insurance, advanced by them in part payment before the commencement of the voyage, and paid the freight, short of that amount, into Court. The Court below disallowed this abatement, and ordered the whole freight to be paid into Court. On appeal :

Held, by the Judicial Committee, (1) that, in the circumstances, the Master was warranted in resorting to a Bottomry Bond, and that the necessity of the case warranted the hypothecation of the cargo as well as the Ship and freight, but, (2) as the latter was, by the agreement between the Charterer and the Master, in part paid in advance, the retention of the amount of such prepayment by the Consignees of the cargo, upheld, as the Master by hypothecating the chartered freight could give no right to more freight than the Owner had a right to de

mand from the Charterer.

1869.

DROEGE

V.

SUART.

The "Karnak."

for £596. 12s. 6d., part of such advances, was indorsed by the Master on the charterparty as a payment out of the proceeds of the freight, with 10 per cent., and charges for insurance of the above sum.

In pursuance of the charterparty, the “ Karnak” took on board 720 bales of cotton (the cargo proceeded against), for which the Master signed Bills of lading; and on the 24th of December, 1866, the Vessel sailed for Liverpool.

On the 17th of January, 1867, the " Karnak," having in the prosecution of her voyage met with bad weather and suffered considerable damage, put into the port of St. George, in the Islands of Bermuda, in distress, and the Master proceeded, shortly after his arrival, to have the Vessel thoroughly repaired; for which purpose a large portion of her cargo was discharged and warehoused. In order to obtain a sum of £2,690. 6s. 1d. for the payment of the repairs so executed, as well as of other charges and expenses incurred by him at the port of St. George, the Master, after having written to the Agent of the Owners of the Ship, and also to the Agent, as he supposed, of the Owners of the cargo, informing them of the distress he was in, and not receiving any answer within the time an answer might have been returned, advertised for tenders for the advance, and executed a Bottomry Bond to one Bluck, of that port, by which he hypothecated the Vessel, her cargo and freight, to secure the repayment of £3,228. 7s. 3d., being the above sum of £2,690. 6s. 1d. with maritime interest. The "Karnak' "Karnak" subsequently proceeded on and completed her voyage to Liverpool. The Bottomry Bond, of which the Respondents became the legal holders, was never paid. The Respondents

1869.

DROEGE

v.

SUART.

The

consequently instituted the present suit against the "Karnak," her cargo and freight; and the Owners of the Vessel having allowed judgment to go by default, the Vessel was sold by Order of the Court of Admiralty. The proceeds of such sale were paid "Karnak." into Court, and the Court pronounced for the force and validity of the Bottomry Bond, so far as regarded the Vessel and her freight. The nett proceeds of the sale of the "Karnak," available for payment of the Bond, amounted to £512. 11s. 9d. The whole of the freight originally payable under the charterparty in respect of the cargo proceeded against amounted to £1,324. 16s. The Appellants, the Owners of the cargo, however, did not pay the whole of that sum into Court, but only the sum of £628. 15s. 3d., contending that they had satisfied the residue by advances on account of freight made by the Charterer at Galveston, together with costs of insurance, interest, and commission.

At the hearing in the Court below, the Appellants contended-first, that the Bottomry Bond was invalid as against the cargo; secondly, that they were entitled to deduct the part payment of freight. The Judge of the Court below (The Right Hon. Sir Robert Phillimore) delivered judgment (a), and thereby pronounced for the validity of the Bond, so far as it affected the Ship, cargo, and freight, and further directed the Appellants to pay into Court the sum of £727. 19s. 3d. which they had retained out of the freight as above mentioned.

From this judgment the Appellants brought this appeal.

(a) Law Rep. 2 A. & E., 298, 313.