The Aurora - 14 U.S. 96 (1816)
U.S. Supreme Court
The Aurora, 14 U.S. 1 Wheat. 96 96 (1816)
14 U.S. (1 Wheat.) 96
To make a bottomry, executed by the master, a valid hypothecation, it is necessary to show that the master acted within the scope of his authority, or, in other words, that the advances were made for repairs or supplies necessary for effectuating the objects of the voyage, or the safety and security of the ship, and no presumption should arise in the case that such repairs or supplies could be procured upon reasonable terms with the credit of the owner, independent of such hypothecation.
If the master have sufficient funds of the owner under his control or can procure them on the general credit of the owner to make a necessary repair, he has no authority to subject the ship to an hypothecation.
A bottomry bond given to pay off a former bottomry bond must stand or fall with the first hypothecation, and the subsequent lenders can only claim upon the same ground as the former lenders, of whom they are virtually the assignees.
Where money has been advanced, under a stipulation for a bottomry bond, and the vessel is permitted to go to sea without any attempt to enforce the stipulation, it is to be deemed a waiver of the hypothecation and the party cannot on a subsequent voyage insist upon a bottomry bond for his prior advances.
A bona fide creditor who advances his money to relieve a ship from an actual arrest on account of debts incurred on the ship's account may rightfully stipulate for a bottomry interest to secure him for such advances, and the master, if he has no other sufficient funds or credit, may execute a bottomry bond in his favor.
But it is very doubtful if the arresting creditor could entitle himself to such a bottomry bond by agreeing to withdraw his arrest.
If a person making advances for repairs, &c., has in his own hands funds of the owner which he may apply to pay for repairs, he cannot entitle himself to a bottomry bond for advances made for such repairs.
It is incumbent on the lender on bottomry to show the items of his claim, and if various demands are mixed up in his bond, some of which would and some would not support an hypothecation, it is his duty to separate them and exhibit them to the court distinctly before he can claim a decree for any part of his advances.
The brig Aurora, commanded by captain Owen F. Smith and owned by the claimants, sailed in July, 1809, from New York on a trading voyage to the Brazils, and from thence to the South Sea islands for the purpose of procuring a cargo for the market of Canton or Manila, with liberty, after completing this adventure, to continue in this trade or engage in that between Canton and the northwest coast of America. The brig duly arrived at Rio Janeiro, where the principal part of her outward cargo was sold, and from thence proceeded to Port Jackson, in New Holland. At this port, the brig underwent considerable repairs, on account of which advances and supplies were furnished by Messrs. Lord & Williams, who were merchants there. The original objects of the voyage seem here to have
been lost sight of, and the brig was chartered by the master to Messrs. Lord & Williams for a voyage of discovery, and was actually retained in their service for about a year under this engagement. At the end of this time, the brig had returned to Port Jackson, and Captain Smith was here put in gaol by some persons whose names are unknown for debts contracted, as it was asserted or supposed, on account of the vessel, and was relieved from imprisonment by Messrs. Lord & Williams. About this time, viz., in July, 1811, the brig was again chartered to Messrs. Lord & Williams for a voyage from Port Jackson to Calcutta and back to Port Jackson, and a bottomry bond was executed for the same voyage by Captain Smith in favor of Messrs. Lord & Williams for the sum of £1,482 6s. 1d. and interest at nine percent, being the amount, as the bond expresses it, of
"charges incurred for necessaries and stores found and provided by Messrs. Lord & Williams, of, &c., at various times and places, for the use of the said brig."
The vessel duly proceeded to Calcutta and landed her cargo there, but being prevented, as it was alleged, by the British government in Calcutta from returning to Port Jackson, the voyage was broken up. In December, 1811, Captain Smith entered into a contract with the libellants, Messrs. Chamberlain & Co., at Calcutta by which he engaged to charter the brig to them, to carry a cargo on their account to Philadelphia, for the gross freight of 12,000 sicca rupees, to be paid to him in advance in Calcutta, and also to give the charterers the appointment of the master for the voyage.
He further agreed, in consideration of the libellants paying the bottomry bond of Messrs. Lord & Williams and advancing any sums necessary for the repairs and supplies of the ship, to execute a bottomry bond to them for the same voyage for the principal sum thus paid and expended and 20 percent interest. In pursuance of this agreement, on 17 December, a certain captain George Lee, with the assent of Smith, was appointed by the libellants to superintend the repairs, equipments, and loading of the brig, and afterwards sailed as master on the voyage. A bottomry bond, for 18,000 sicca rupees was formally executed by Captain Smith on 23 and a charter party on 26 December. In the latter part of January, 1812, Captain Smith resigned his nominal command of the ship to Captain Lee and delivered to him the ship's papers and letters for the owners. The ship duly sailed on the voyage and arrived at Philadelphia and there safely delivered her cargo. The advance freight was paid to Captain Smith, according to the contract, and he remained behind at Calcutta under the pretense that, with this advance freight, it was his intention to prosecute the plan of his original voyage and to endeavor to repair the losses sustained by his former conduct. It also appeared in evidence that Captain Smith was, during the whole voyage, much addicted to intoxication, both at sea and on shore, and Messrs. Lord & Williams and the libellants seem to have been fully apprised of his incapacity to manage the concerns of the voyage. The owners refused to pay the bottomry bond executed at Calcutta, and the
present libel was brought to enforce it. The district court, at the hearing, decreed the full amount of the principal and interest of the bond, deducting the 12,000 sicca rupees advanced at Calcutta. Upon an appeal, the circuit court reversed this decree, and upon the merits dismissed the libel.