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CHAPTER XII.

BOTTOMRY AND RESPONDENTIA.

§ 81. Bottomry and BOTTOM RY is a contract entered into by a shipowner or his respondentia -what.

agent, whereby in consideration of a sum of money advanced for the use of the ship, the borrower agrees to repay the sum advanced with interest if the ship terminate her voyage successfully, and at the same time hypothecates the ship as security for the payment of the principal and interest.

If the instrument by which the hypothecation is effected is a deed poll, it is called a bottomry bill (a); if it is in the form of a bond, it is termed a bottomry bond (). However, no particular form of words is absolutely necessary, though the contract must be in writing in the case of a British ship.

Bills of exchange, given for monies advanced for the necessities of the ship, will not amount to instruments of hypothecation; though, of course, good as collateral securities (c).

If the money be advanced not upon the ship, but on the cargo or goods on board her, the contract to repay the sum advanced and the stipulated interest is more properly termed respondentia ; though it is sometimes also termed bottomry.

(a) The D. H. Bills, 4 P. D. 32.

(6) For Forms of both Bottomry Bonds and Bills, see Maclachlan & Abbott on Shipping - Appendix; The Cecilie, 4 P. D. 210; see “ Cases" (1) at end of this $ ; The Elpis, L. R., 4 A. & E. 1; The

Great Pacific, L. R., 2 P. C. 516 ; and see Lord Stowell's judgment in The Zodia, 1 Hagg. 320.

(c) Ex parte Halkett, 19 Ves. 473; The Augusta, 1 Dods. 283; The Staffordshire, L. R., 4 P.C. 194;

“Cases" (2) at end of this s.

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The claim of a bottomry or respondentia bondholder will prevail over that of a subsequent purchaser of the ship or goods, even though the latter had no notice of the hypothecation (d).

The terms bottomry and respondentia are also used to denote contracts to repay money borrowed, not on the ship or cargo, but on the mere hazard of the voyage. Such a

, contract is sometimes also termed fanus nauticum, or usura maritima. For instance, if an advance be made to a merchant, to be employed in some particular voyage, consideration of the borrower agreeing to repay it with interest at 50 per cent., or at any other extraordinary rate, if the voyage in which it is to be used be safely concluded, the mere hazard of the voyage will be the only security for the repayment of the sum advanced and interest.

No one can lend money on bottomry, who is, at date of The parties the loan, a debtor in an equal or larger sum to the ship (e). If the lender be a debtor in a less amount, the bottomry bond will be invalidated pro tanto (e).

e A bottomry bond given to the consignee of the cargo, or even by a substituted shipmaster to the person who appointed him, is perfectly good; the borrowing being shown to have been necessary, and the transaction to have been fair and reasonable (J). A bottomry bond has even been held good when given to the agent of the owners of the ship, but only under very strong circumstances of necessity (9).

CASES. 1. The master of a Danish ship being without funds or credit at Hamburgh, in order to obtain necessaries to enable his ship to proceed to Africa, and then to London, obtained a loan on security of instruments, by which he pledged his ship and bound himself for the repayment of the advance within six days after her arrival

thereto.

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(d) The Catherine, 15 Jur. 231;

“Cases” (3) at end of this s. (e) The Hebe, 2 W. Rob. 146, 412.

(f) The Alexander, 1 Dods. 278; The Nelson, 1 Hagg. 169; The

Rubicon, 3 Hagg. 9.

The Staffordshire, L. R., 4 P. C. 194; see “Cases" (2) at end of this § ; The Hero, 2 Dods. 139, 144, per Sir Wm. Scott.

in London. Held, that the instruments were valid bottomry bonds (h).

2. A bottomry bond on a ship and freight was given to the ship's agent by the master for the repairs of the ship, subject to an agreement by the bondholder, that if a bill of exchange drawn by the master on a mortgagee of the ship should be duly honoured the bond should not be enforced. The mortgagee died before the bill was presented. Neither probate of his will nor administration had been taken out when the holder of the bill, not knowing of the drawee's death, presented the bill for acceptance. Held, that the bond was valid, and that it was not necessary, in order to enforce it, that the bill of exchange should have been dishonoured (i).

3. A British ship, on which a bottomry bond had been given, payable on her arrival in England, was sold as unseaworthy, at Bahia, by the master. She was purchased by a foreigner, who, after repairing her, changed her name and sent her back to England. No notice of the bottomry bond was given at the sale. Held, that the ship was still subject to the bond (k).

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$ 82. Peculiarities There are two main differences between a bottomry or of bottomry

respondentia contract and a common loan; the first is that dentia bonds. the money advanced is at hazard during the voyage (1),

and the repayment thereof will depend on the arrival of the ship in safety. The expression of maritime risk is essential to the validity of a bottomry bond; therefore, in cases where the loan is by the terms of the deed to be repaid in any event, the contract will be invalid as a bottomry or respondentia bond (m), though, of course, collateral security, making the owner liable in any event, can be given, e.g. a bill of exchange (n). The second difference referred to is that the lender on a bottomry or respondentia contract could always stipulate for any rate

(h) The Cecilie, 4 P. D. 210.

(i) The Staffordshire, L. R., 4 P. C. 194.

(k) The Catherine, 15 Jur. 231.

(2) Stainbank v. Fenning, 11 C. B. 51; Stainbank v. Shepard, 13 C. B. 418; 22 L. J., Exch. 341; The

Indomitable, 5 Jur., N. S. 632 ;
Swa. 446.

(m) The Indomitable, supra; The Serafina, Br. & L. 277.

(n) Stainbank v. Shepard, 22 L. J., Exch. 341; 13 C. B. 418; and see § 81, p. 134.

of interest, even before the repeal of the usury laws (o). However, the court has power to reduce a premium unreasonably high (p).

Consequently, if the ship or cargo be lost during the voyage, the lender on the bottomry or respondentia contract will lose his money. The ship must be actually lost; therefore if the ship be captured but re-captured, the lender will not lose his right to claim the money (9); while if the ship return in safety, he will be entitled to the principal and interest (however exorbitant) which was agreed on. Interest at the rate of four per cent. will be allowed where no rate has been specially fixed (r).

The money will, also, become due if the voyage be abandoned by the shipowner or master, or if the ship be sold without the consent of the lender (8). So, where the completion of the voyage is prevented by an impossibility beyond the lender's control, for instance, by the ship being condemned as unseaworthy (t), or in consequence of a collision (u), the amount secured by the bond will be payable.

In cases where a part only of the goods hypothecated by a respondentia bond reach their destination, that part will only be liable to satisfy a proportionate part of the respondentia debt, viz., according to the proportion that their value bears to the total value of the goods on which the bond was given (v).

Where additional interest is stipulated for by way of a penalty, if default be made in payment of the bond and the interest thereon, such additional interest must not

(6) Molloy, De Jur. Mar. II. C. v. Williamson, 3 Doug. 164. 11; 2 Bl. Com. c. 5, p. 91 ; The (r) The Cecilie, 4 P. D. 210. Cecilie, 4 P. D. 210.

(8) The Helgoland, Swa. 491 ; (P) The Heart of Oak, 1 W. Rob. The Catherine, 15 Jur. 231; The 204, 215; The Huntley, Lush. 24; Great Pacific, L. R., 2 P. C. 516; The Cognac, 2 Hagg. 377.

see “Cases" (3) at end of this s; (9) The Great Pacific, L. R., The Armadillo, 1 W. Rob. 251, 256. P. C. 516; see “Cases" (3) at end (t) The Dante, 2 W. Rob. 427; of this ; Thompson v. Royal Ex- “Cases” (2) at end of this g. change Ass. Co., 1 M. & S. 30; seo (u) The Empusa, 5 P. D. 6. “ Cases" (4) at end of this ; Joyce (v) Cargo ex Sultan, Swa. 504.

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exceed the rate of four per cent. Though a higher rate be stipulated for, only four per cent. can be recovered (u).

A bottomry bond given under compulsion or duress will be void; though a bond voluntarily given by a master while under arrest is good (x).

The ship, if it exist in specie, cannot be considered a total loss within the meaning of a bottomry bond or bill, though it be entirely disabled (y). The doctrine of constructive total loss does not apply to bottomry bonds or bills; consequently, if the bottomry bondholder has insured his interest in the ship, he cannot recover against the underwriter unless there has been an actual total loss of the ship (s).

CASES. 1. A bottomry bond on ship, freight, and cargo, provided for the payment of a loan and interest thereon at eight per cent. within five days from the arrival of the ship at her port of discharge, and in default for the payment of an additional premium at ten per cent. On default being made : held, that the bondholder could not recover the additional premium of ten per cent., but only interest at four per cent., from the date when the bond became payable till its payment (a).

2. A bottomry bond, granted in London on an American ship, was to be paid within twenty-four hours after the ship's arrival in a port of the United States. After the ship left London, she was compelled to put into Plymouth, and was there condemned as unseaworthy. Payment of the bond was decreed, the ship existing in specie (6)

3. The master, to raise money for necessary repairs, hypothecated his ship and freight. The bond contained a clause that it should be void, if the obligors should pay in consequence of the loss of the

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(u) The Sophia Cook, 4 P. D. 30;

“Cases" (1) at end of this s; The Cecilie, 4 P. D. 210.

(2) The Heart of Oak, 1 W. Rob. 204 ; The Gauntlett, 3 W. Rob. 82.

(y) Thompson v. R. E. A. Co., 1 M. & S. 30; see “Cases" (4) at end of this ; The Great Pacific, L. R., 2 P. C. 516; see “ Cases" (3) at end of this $; Broomfield v.

Southern Insurance Co., L. R., 5 Ex.
192; The Dante, 2 W. Rob. 427;

“Cases" (2) at end of this s;
The Catherine, 15 Jur. 231; The
Elephanta, 15 Jur. 1185.

(3) Thompson v. Royal Exchange
Ass. Co., 1 M. & S. 30; see “Cases''
(4) at end of this g.

(a) The Sophia Cook, 4 P. D. 30.
(6) The Dante, 2 W. Rob. 427.

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