THE DORA. MOORE
11. THE DORA.
(DiBtrl'ct Gourt, E.]). LottiBiaM. May 25, 1887.) 1.
SmrPIl\'G-BOTTOMRY AND BEsrONDENTU-WlUTCONSTITUTES.
The master of a ship. having need of money in a 'foreign port. executed two Instruments to secure loans, the tenor of which was that the master, for necess.ary disbursements of the vessel, pledged the vessel a.nd freight for the payment of the amount expressed, to be made 10 days after the arrival of the Bel at the port of destination, any other draft or obligation to be secondary. Except by implication there was no renunciation of the claim for repayment ofthe loan, unless the ship arrived at her port of destination. Hela,that.these had the force anll validity of bottomry bonds.
SAME-'RANK-As BETWEEN BONDS ON SAME
, In a question as to the rank of two bottomry bonds upon the. same ship,the fact allpeared to be that the obligations, though dated one one day, and the other the next day, were for moneys expended during the same period and to relieve.the same necessit,.. Held, since the priority must be determined accordmg'to the necessIty at the time of the advances, and these advances were contemporaneous.an,d furnished relief from the same wants, the obligations must rank as of the same date. , .
A ship made jettison6f part of her cargo, and upon her arrival In a foreign port was libeled and .sold. Held, that the claims' of the agents of the ship for money .advanced in paymllnt of lIer pari of the geneJ;'al average should be paid out of'.the proceeds of the sale, before the bottomry bonds. . The lien of a ship's agents in a foreign port for money advanced in payment of her part of a general average arising out of a jettison of part of the carg<\ is a lien enforcealile by a proceeding m ,.em in admiralty. ' A ship deviated from her course, and, after making jettison of part of her cargo" reached a foreign port. Hela that, upon a libel and sale of the vessel, for the preseryationof the a claim of the ship's agents f()r ship' after she reached the harbor, and after she was condemned. to place her in a condition where she ,could be sold as a condemned vessel, should be first paid,before the bottomry bonds.
OF AGENTS' LIEN.
8. SAMllJ-ADvANcES BY SHIP's AGENT FOR GENERAL AVERAGE.
SAME:""ExPENSES IN PREPARING SHIP FOR SALE.
In Aqmiralty. E. W. Huntington, for J ..& C. Moore & Co. H. DffYI,is, for Hope Ins.. Qo. anli claimants. T. Sernme8, for S. A. Coslllich.
BILLINGS. J. These threecauseflj consolidated and tried as one, preeent the fQIlowing state of facts: On the 10th and 11th days of March, 1886, Austrian ship Dora was at Pensacola,Fla., laden for a voyage to Genoa, Italy, with a cargo of lumber. Having need of money and being without funds, the master. made and deliv.ered, tWQ instruments,-the one, for.6,OOO francs, on March 10th; and for 617 pounds sterling, upon March 11th. The tenor of these instruments was that the master, for necessary disbursements oUhe ves,sel, vessel and freight for the .payolent of the amount.;.ex-
pressed to be made 10 days after the arrival of the vessel at the port of destination, any other draft or obligation to be secondary. On March 14th the vessel set sail on her voyage, and proceeded to sea. She encounteredt()ugh weather, and sprung aleak. Theniaster, after consulta'tion with the other officers, to save the :vessel and the residue of the cargo, caused a jettison to be made of a portion of the lumber, and, for safety of life, vessel, and cargo, determined to and did turn aside from his voyage, and seek New Orleans as a port of refuge, at which port she arrive4 on ¥ar9h 24th. On sarile:day tne Austrian consul apppintedsurveyors, who on 2'9th. made an exrilninatiQQ, and ordered cargo to be unladen, to March3l st allowoffurther survey· The cargo was unload ed and April 22d. On Apri129th thesUJ;veyors recommended th;lt the vesfle1 be condemned and sold. The master was about to have the vessel sold, when, on May 18th, the libel ill the first of the causes was filed. Upon her arrival the vessel had been placed in the hands ofJ. A. Cosulich & Co., who had made the disbursements, and a£terwards libeled her in the third suit. These libelants knew the owner of the vessel, and that he was a man of wt;llllth.· There is no other evidence that the disbursements weJ:enot made upon their reliance upon the vessel 'and the cargo for the amounts respectively required for them. Messrs. & advanced in sum of $3,20().88. 'A general average was adjusted by the jettison, and the expenditures at this the port of the of refugej&nd for the part of this loss and these expenditures, put by the adjusttri'ent upon the ship', clairnismade by Cosillicli& Co. upon thevessel and its proceeds. The vessel was sold, and brought $2,400, which is in the registry of the court. .The questions are as to the validity and priority of these alleged claims upon the ship. . First. What is the character of those two hypothecations made at sacola? The proctors for those who hold them contend that they are bottomry instruments. Bottomry is defined to bea maritime contract by which a (or bottom) is hypqthecated in eecurity for money borrowed for the:purposes of her voyage,under the condition that, if the ship. arrive at the port of her destination, the borrower, personally, as well as, the ship, shall be liable for the repayment of the loan, together with such premium thereon as may have been agreed on; but that, if the ship be lost, the lender' shall have no claim against the borrower, either for the· sum advanced or the premium, (which is often termed "maritime interest," since it may be fixed withont necessary limit from the legal rate of interest in the country where the loan is made, or where it is to be paid.} The earlier oottomry contracts were executed under seal,· and contained a special clause renouncing all cla:hh for repayment of the loan, unless, the ship arrived. at her port of destination. The later usage has dispensedwith the seal. As tothe absence of the old clause of renunciation of claim of repayment unless the ship arrived: In Simonds v. Hodgson, 3 Barn. & Ado!' ,C. J t50, the court of king's bench, presided oVer by Lord reversing the judgment of the common pleas, (6 Bing. 114,) held that wherefrom the whole instrumellt it was manifest that the lender takes.
upon himself the peril of the voyage, the instrument is one of bottomry. In The Nelson, 1 Hagg. Adm. 169, Lord STOWELL held that when the instrument simply provided that "the money was to be paid at a certain time after the arrival of the ship at her porti" that that was a sufficient description of. a sea risk, and made the instrument one of bottomry. .I 'Consider it to be settled by authority that these instruments have the validity and force of bottomry bonds. Second. As to their rank with reference to each other. The fact appears to be that those obligations, though dated one one day, and the other the next day, were for moneys expended during the same period, and to relieve the same necessity of the ship. In The Virgin, 8 Pet. 551, the court say, it is the practice to execute the bond after the money has been furnished on an agreement for a bottomry, as· the precise amount cannot soener be ascertained. It is settled law that the holder of a bottomry bond must show that there was a necessity for the hypothecation, and that a bottomry bond may be good for a portion of the loan, and bad for another portion. It would follow that the priority must be determined l\ccording to the necessity at the time of the advances, and, as the advances were contemporaneous, and for a single necessity, the obliga;. tions must rank as of the saine date. 'l'hird. There remains the question as to the rank of these bonds coosideredas one obligation, and the claims of Oosulich & 00. for thdl,' advances at this port. A study of the elements and grounds. of the appor., tionment made by the adjusters shows this: That before the case came into the hands of the proctors for the ship's agents at this port, they had· caused a general average to be made, to which the owners of the cargo hadsllbmitted, and their proportion of which they had paid. Thereis a further question as to expenditures in this port by the ship's agents, not in«luded in the general average, amounting to $346.31. I shall firstcansider the question as if the lien upon the proceeds of the ship arosefrou1 a general average. The elements which make up the total which is apportioned are: $128.40, value of the cargojettisoned;$193.34, the value of the yawl and tackle of the ship thrown overboard and strayed to saVe cargo; and upwards of $6,000, expended by the ship's agents here. This total is apportioned upon cargo valued at $8,686.40, and one-half value of vessel, making $1,884.17. So that the chief question strictly is as to the right to enforce a lien against the .bottomry obligations arising from expenditures made by the ship through its agents in a foreign port, a large portion of which has been s::ltisfied by the owners of the cargo. As to the amount of the cargo jettisoned, the question is as to the validity and effect of a general average as against the bottomry holders. The general doctrine as laid down by the text writers, and as concurred in by the judges, is that money loaned upon bottomry is not affected by average or salvage. This language has led to some perplexity. In Oologaardt v. The Anna, in the United States district.court in Rhode Island, reported in 9 Amer. Law Reg; (N. S.) 475,the court, :after stating four reasons in favor of the claim of the libelants, which was for the enforcement of a claim for bottomry .money. against a geQeral·av-
eragejmaintaius libelant's claim. But I think it fair to infer that the court held that no general average could operate against bottomry. this case stands alone as. an adjudication of that conclusion. In cargo 'tlJ,cGalam, Brown & L. (1863-65) p. 184, the court interpreted this often-quoted maxim as to bottomry obligations not Reing liable to average; and held it was, true only as between the owner of potbecated and the owner of the bottouHy bond; but tbat, as between the holder of the bottomry bondnnd those whose lien arises in respect of services by which the thing hypothecated had beenlJenefited, this maxim did. not hold. This case maintained the lien arisingfrom agen" for rescuing a portion of the cargo against the ship and rest ofthecargo,as having a priority over a former respondentia. There be no doubt but that this.last decisif)n is based upon appreciation: of the subject of maritime liens; and is correct. In Cope v. Dock, 00., 10 Fed. Rep. 142, 144,isgiven the reason for maritimeliens upon ships,as follows: · "Tbeship.a,nd all things are, in the law of admiralty. so far is concerne<!, qlotjled with personality. Those who repairher,,; or loan money UP!>D her, oreqltipor man her, or who work for her, those who are injured by her, and those who save her, may-look to her for' jUdgment as thedebtor. The reason for this is that ships are often distant far from home 'and their owners,and commerce was vastly facilitated, and the interest of concerned therein vastly promoted, by their being endowed by law with the attributes or faculties of a personal ·. Tbis reason is the originoUp,e whole doctrine of liens; and by this reason maritime liens to be ascertained and lDeasured and ranked." Whoever lends money upon a ,bottomry obligation for the ordinary transactions of her voyage, has a lieu upon the vessel which outranks all lienholdersl save the mariners for their wages. But where maritime iees or sacrifices or expenditures.are .rendered necessary which carry with them maritime liens, the holder of the bottomry bond,like any othelr mort. gagee or pledgee" has his conditional interest burdened precisely as if he were to that extent anownet: Indeed, the bottomry holder can be no more than absolute owner, sociar as third persons are concerned. To hold any more doctrine would, prejudice the interests of the holder himself. It is for his interest as well as for that of all solute or owners that the whole should be saved by a fiee of a part,and that the whole thus saved should contribute to make good the sacrifice, and that salvors and all others who render benefits which save' or render available the bottom pledged to him, should hjl.ye a lien upon that bottom, even Itgainst him. See Williams & B'. Adm. JUl'. 64; 65; and Mac!. Shipp. 702-705. I think. that, upon reason and authority, the general average should be paid before the bottomry honds. The transacuons out of which the general average arose were subsequent 10 these borids1and aided.in providing and making available the bottom ,which these'bonds contingently '. But it is, urged by the learned proctors for the bottomry that the eralaverage does not carry with it any maritime lien which can subject the ship to admiralty jurisdiction." It will be conceded that all juristl1
have held that the general average carried with it a lien; either at com,mon Jawor in admiralty. Those who, under certain circumstances, have denied that it constituted a privilege enforceable in the courts of admiralty have admitted that it gave a lien which was good in the commonlaw courts. This would be sufficient to dispose of this point in favor of the claimants as to the jettison and later disbursements. The three con,solidated cases may be treated as one case initiated by the bottomry holders, and, the res being in the possession of the court, the lienhold,ers other than those of an admiralty character might be decreed to be satisfied out of the res or its p'roceeds. This is the point decided in The Lottawanna, 21 Wall. 558, 1>81, 582. But the weight of authority is in favor of the general average in this case carrying with it such a lien as would of itself give and maintain admiralty jurisdiction. It would be idle to review all the cases in which the question has been passed upon. It may be said that in England this lien is treated as purely of a while the weight of American aUthorities is decidedly in favor of its carrying an admiralty lien capable of being enforced in a proceeding in rem in a court of admiralty. Nor is it necessary to examine the earlier decisions in the United States supreme court bearing upon this subject, because this precise question was presented,to that court in Nf/lTtOUr8v. Vance, 19 How. 162, 171. It was there that the owner of a cargo has a maritime lien on the vessel for the contributory share due from the vessel on an adjustment oia general average, which lien may be enforced by a proceeding in rem' in, the admiralty. Lai:ltly, as to the claim of Cosnlich & Co. for the, $362 expended by them as the ship's agents, after she was brought into this port, and which was not included in the general average. For the most part, or to the extent of a great part, these expenditures were made for,the preservation of the ship, and, after she was condemned, to place her in a condition where she could be sold asa condemned vessel. They were therefore expenditures made in a foreign port, which tended directly to enabh'l'the bottomry-men to realize out of the vessel in a port where she had to be sold. Those which are valid against the ship rank before the bottomry holders, precisely as would the expenses of an auctioneer in making the sale; they were a necessity or there could have been no realizing out of the vessel for the bondholder. There is a series of cases in which the supreme court of the United States have defined the liens of those who expend moneys upon ships in foreign parts, which, in their own language, have" had the effect to place these liens upon a more substantial footing." Those decisions maintain the general doctrine that ture which benefits the res creates a lien. These cases are The GrapeSlwt, 9 Wall. 129; The Lulu, 10 Wall. 192; The Patapsco, 13 Wall. 329; The Emily Souder, 17 Wall. 666. Those cas.es also dispose of the point taken that, because the parties making the expenditures know the OWners, and know them to be persons of wealth, that therefore they gave the credit to the owners, and not to the ship; for they hold, among other tions, (Patapsco, 13 Wall. 334,) that the burden of displacing the lien
from the vessel, where expenditures were necessary, was upon the claimants. In that case the charge upon the books of the libelants was against -the owner personally, and still the court held the credit was given to the vessel. The conclusion is that Cosulich & Co. must first be paid the amount adjusted by the general average as the contributory share ofthe vessel's loss and expense, $1,308.40, and for such portion of the expenditures of $346 as were necessary in order to preserve the vessel, (and to ascertain these items there may be a reference.) The balance of the proceeds must go to the holders of the two bottomry obligations pro
HOPE INs. Co. SAME.
COirouit Oourt, E. D. Louisiana. February 25,1888.)
MARITIME LIlmS-PRIORITIEs-A!>VANClllS TO PAY SEA.l\lEN'S WAGES-BOTTOMRY BONDS.
An Austrian ship boUnd ftom Pensacola, Fla., to Genoa, Italy, deviated from her conrse, and, arriving at New Orleans, was libeled and seized. Two of the libels were for bottomry bonds, and a third for money advanced for the payment of mariners' wages. Held. that the money advanced by third libel· an.t for such payment having been soused, he acquired a lien of equal rank with that extinguished, and his claim ranked above the bottomry bonds.
In Admiralty. On appeal from district court. See The Dora, ante, 343. E. W. Huntington, for J. & -C. Moore & Co. H.Denw,c(oJ; Hope Ins. Co. and claimants. T. J. Semmes, for S. A. Cosulich. PARDEE,J. The elaborate opiniori given in these cases by Judge Bn.. satisfactorily settles all the questions considered. There remains, however, to be disposed of a claim of S. Cosulich & Co., of $1,208.30, alleged to have been paid to the captain of the Dora to pay seamen's wages. In the account attached to the libel made up May 21, 1886, and indorsed, "Approved, M. Premuda, Master," the said item is charged 'as fo]]ows:"P'dcash to captain to payoff the ship's crew for provisions, ete., $1,208.30." The claim is supported by the evidence of Cosulich that he paid !ll1 the sums of money specified in his bill, and by the evidence of Capt. Premuda, "Question. I find an item in Mr. Cosulich's bill for $1,208, for paying provisions and expenses? Answer. Yes,sir. That is right. Q. Did you expend that money for that purpose? A. Yea) sir." On the first submission of the case, this was all in relation to the said item. Subsequently the evidence of the Capt. Pr.emtrda was taken under commission, and he then testifiesthlit