The Virgin - 33 U.S. 538 (1834)
U.S. Supreme Court
The Virgin, 33 U.S. 8 Pet. 538 538 (1834)
33 U.S. (8 Pet.) 538
Bottomry. On an appeal from the decree of the circuit court, of Maryland on a libel on a bottomry bond, originally filed in the district court, it appeared that commissioners appointed by the circuit court had reported that a certain sum, being a part of the amount of the bond, was absolutely necessary for the ship as expenses and repairs in the common course of her employment. No exception was taken to this report by either party in the circuit court, and it was accordingly confirmed by that court. The report is not open for revision in this Court, there being nothing on its face impeaching its correctness.
It is no objection to a bottomry bond that it was taken for a larger amount than that which could be properly the subject of such a loan, for a bottomry bond may be good in part and bad in part, and it will be upheld by courts of admiralty as a lien to the extent to which it is valid, as such courts, in the exercise of their jurisdiction, are not governed by the strict rules of the common law, but act upon enlarged principles of equity.
It is notorious that in foreign countries, supplies and advances for repairs and necessary expenditures of the ship constitute, by the general maritime law, a valid lien on the ship, a lien which might be enforced in rem in our courts of admiralty even if the bottomry bond were, as it certainly is not, void in toto.
An objection was taken to the bond that the supplies and advances might have been obtained on the personal credit of the owners of the ship without an hypothecation. Held that the necessity of the supplies and advances being once made out, it is incumbent upon the owners, who assert that they could have been obtained upon their personal credit, to establish that fact by competent proofs, unless it is apparent from the circumstances of the case.
It was objected that the supplies and repairs were, in the first instance, made on the personal credit of the master of the ship, and therefore could not be afterwards made a lien on the ship. Held that the lender on the bottomry bond might well trust the credit of the master as auxiliary to his security, and the fact that the master ordered the supplies and repairs before the bottomry was given can have no legal effect to defeat the security if they were ordered by the master upon the faith and with the intention that a bottomry bond should be ultimately given to secure the payment of them. In cases of this sort, the bottomry bond is in practice ordinarily given after the whole supplies and repairs have been furnished, for the plain reason that the advances required can rarely be ascertained with exactness until that period.
It was objected that the advances were for a voyage not authorized by the
owners; that the original orders were for the master to get a freight for Baltimore or New York, and if he could not then to proceed to New Orleans, whereas the master broke up his voyage, and without any freight returned to Baltimore. By the court:
"It may be admitted that if a bottomry lender, in fraud of the owners and by connivance with the master for improper purposes, advances his money on a new voyage, not authorized by the instructions of the owner, his bottomry bond may be set aside as invalid. But there is no pretense to say that if the master does deviate from his instructions, without any participation or cooperation or fraudulent intent of the bottomry lender, the latter is to lose his security for his advances, bona fide made for the relief of the ships necessities."
Seamen have a lien prior to that of the holder of a bottomry bond for their wages, but the owners are also personally liable for such wages, and if the bottomry holder is compelled to discharge that lien, he has a resulting right to compensation over against the owners in the same manner as he would have if they had previously mortgaged the ship.
Graf, one of the owners, had the ship delivered up to him upon an appraisement at the value of $1,800, and he gave a stipulation according to the course of admiralty proceedings to refund that value, together with damages, interest and costs, to the court. He is not at liberty now to insist that the ship is of less than that value in his hands, or that he has discharged other liens diminishing the value for which the owners were personally liable in solido in the first instance.
To the extent then, of the appraised value of the ship delivered upon the stipulation, the owners are clearly liable, for she was pledged for the redemption of the debt, and they cannot take the fund except cum onere. But beyond this .there is no personal obligation upon the owners.
In this case, the value of the ship, the only fund out of which payment can be made, fell far short of a full payment of the amount due upon the bottomry bond. But this is the misfortune of the lender, and not the fault of the owners. They are not to be made personally responsible for the act of the master because the fund has turned out to be inadequate, since, by our law, he had no authority by a bottomry bond to pledge the ship and also the personal responsibility of the owners. The consequence is that the loss, ultra the amount of the fund pledged, must be born by the libellant.
The ship Virgin sailed in August, 1822, from Baltimore to Amsterdam, where she arrived on 12 October of that year under command of John Cunnyngham. By the plan of the voyage, she was to return from Amsterdam to Baltimore if she could procure a freight; otherwise she was positively directed to proceed to New Orleans. She was owned, when she sailed, by John C. Delplat, who, during her passage to Amsterdam became insolvent, and on 4 September sold one-third of her to Frederick C. Graf.
The vessel, on her way to Amsterdam, encountered severe weather, and arrived there in want of sails and a cable and of various repairs. At her departure from Baltimore, her owner directed that at Amsterdam, as the most economical place for the supply, she should be furnished with a mainsail and topsail and cable, of which it was foreseen she would then be in urgent need. The vessel had a cargo of which, except twenty hogsheads of tobacco, all belonged to Delplat, and all of the cargo was consigned to N. and I. and R. Vanstaphorst, at Amsterdam, to whom Delplat also consigned the vessel. The twenty hogsheads of tobacco belonged to Frederick C. Graf. Agreeably to these consignments, the captain, on arrival at Amsterdam, delivered to the Vanstaphorsts the cargo and committed to them all the concerns of the vessel, in consequence of which they collected and held in their hands all the freight that was actually payable upon any portion of the cargo, and all the proceeds of the tobacco belonging to Mr. Graf.
The captain, desiring to refit the vessel and afford her all the necessaries for her return voyage, applied to the Vanstaphorsts for the requisite means, and ultimately even offered them a bottomry of the ship for the funds. After much delay, they refused all advances, intelligence of the failure of Delplat, asserted by them to be largely their debtor, having meanwhile reached them. To provide for the event of this refusal, the captain set on foot a negotiation through brokers for raising the means by bottomry, and the application to the Vanstaphorsts, and this provisional negotiation, were pending for about three weeks -- the captain knowing no friends of the owner except the Vanstaphorsts to whom he could apply for the aid. During this period, the captain contracted on his own responsibility for various supplies, which he designates in his evidence as all those that were furnished before 1 November. The payment for these and for the other necessaries of the ship was made out of the moneys received from the appellee Vyfhius. On 12 November, after the Vanstaphorsts had finally declined making the advances, the captain contracted with Vyfhius for the loan upon bottomry of eight thousand guilders, at an interest of ten percent, all which, he shows, was appropriated for the indispensable uses of the ship.
About 3 November, the captain received from Mr. Graf a letter dated in September, 1822, announcing his purchase of one-third of the Virgin, and referring to a certificate of his purchase as enclosed in the letter, which in fact appears not to have been enclosed. About the same time, by another letter from Mr. Graf and perhaps also from other quarters, information was given to the captain of Mr. Delplat's failure, and in consequence the captain, on consultation, determined that it was his duty to proceed with the vessel home to Baltimore, and not to dispatch her to New Orleans. After undergoing repairs, and receiving all her supplies paid for by the appellee Vyfhius, the Virgin sailed from Amsterdam to Baltimore, and arrived there in March, 1823.
The owners refusing to pay the appellee his advances, the libel in this cause was filed, which prays citation against the owners by name as well as the captain, and condemnation of the vessel for paying the loan, and also further relief such as the court may deem adequate and just. The owners, Delplat and Graf, appeared and answered; their answers called into question the fact and the necessity of expenses at Amsterdam, insisting too that the Vanstaphorsts had property enough of the owners, and which should have been applied for the wants of the ship, and charging that the bottomry was really taken by the Vanstaphorsts though colorably in Vyfhius' name, and maintaining, finally, that all requisite funds could have been raised on the credit of the owners, or of the captain.
A commission for evidence was sent to Holland, the chief object of which was to prove the Vanstaphorsts to be really the owners of the bottomry. The circuit court determined that the bottomry was invalid, but that the owners are personally liable for all the necessary supplies furnished by the means of Vyfhius for the vessel, and that to that extent he was entitled in this cause to recover against them. The cause was then referred to the clerk of the court to ascertain, calling to his aid two merchants, the amount of the necessary supplies referred to. The clerk and his assistants reported their ascertainment. Exceptions by Delplat and Graf were filed to it. The case was remanded to the clerk, who called two other merchants to co-operate with him, and they reported their statement of the
necessary expenses, which the court confirmed. Thereupon the court passed its final decree awarding payment to Vyfhius by Delplat and Graf of the sum of $2,900, with interest from 26 November, 1830, the date of the decree, the principal of the ascertained expenses being $2,900.
Both parties appealed to this Court.