1. When, during the late civil war, portions of the insurgent
territory were occupied by the national forces, it was within the
constitutional authority of the President, as commander-in-chief,
to establish therein provisional courts for the hearing and
determination of all causes arising under the laws of the state or
of the United States, and the Provisional Court for the State of
Louisiana, organized under the proclamation of October 20, 1862,
was therefore rightfully authorized to exercise such
jurisdiction.
2. When, upon the close of the war, and the consequent
dissolution of the court thus established, Congress, in the
exercise of its general authority in relation to the national
courts, directed that causes pending in the Provisional Court, and
judgments, orders, and decrees rendered by it, which, under
ordinary circumstances, would have been proper for the jurisdiction
of the circuit court of the United States, should be transferred to
that court and have effect as if originally brought, or rendered
therein, a decree in admiralty rendered in the Provisional Court,
as upon appeal from the district court, became at once, upon
transfer, the decree of the circuit court, and an appeal was
properly taken from it to this Court.
3. Liens for repairs and supplies, whether implied or express,
can be enforced in admiralty only upon proof made by the creditor
that the repairs or supplies were necessary, or believed, upon due
inquiry and credible representation, to be necessary in a foreign
port.
4. Where proof is made of necessity for the repairs or supplies,
or for funds raised to pay for them by the master, and of credit
given to the ship, a presumption will arise, conclusive in the
absence of evidence to the contrary, of necessity for credit. The
cases of
Pratt v. Reed and
Thomas v. Osborn
explained.
5. Necessity for repairs and supplies is proved where such
circumstances of exigency are shown as would induce a prudent
owner, if present, to
Page 76 U. S. 130
order them, or to provide funds for the cost of them on the
security of the ship.
6. The ordering by the master of supplies and repairs on the
credit of the ship is sufficient proof of such necessity to support
an implied hypothecation in favor of the materialman, or of the
ordinary lender of money to meet the wants of the ship, who acts in
good faith.
7. To support hypothecation by bottomry, evidence of actual
necessity for repairs and supplies is required, and, if the fact of
such necessity be left unproved, evidence is required of due
inquiry and of reasonable grounds of belief that the necessity was
real and exigent.
This case, which in its original form was a libel in the
District Court of Louisiana on a bottomry bond, and as such
involved nothing but the correct presentation of the principles of
maritime law relating to that matter, and the examination of a good
deal of contradictory evidence, to see how far the particular case
came within them, presented subsequently, and in consequence of the
rebellion and the occupation by our army of the mere City of New
Orleans, while the region surrounding it generally was still held
by the Confederate powers and troops, a great question of
constitutional law, the question namely, how far, with that clause
of the Constitution in force which declares that:
"The judicial power of the United States shall be vested in one
Supreme Court, and in such inferior courts as the
Congress
may from time to time
ordain and establish,"
the President could establish a Provisional Court, and how far
Congress, on the suppression of the rebellion, could, by
its enactment, validate the doings of such a court,
transfer its judgments, and make them judgments of the now
reestablished former and proper federal courts, from one of which,
the Circuit Court of the United States for the District of
Louisiana, the cause purported to be brought here.
The case -- which in this Court consisted accordingly of three
parts -- to-wit:
1. The matter of jurisdiction,
2. That of the principles of maritime law in regard to bottomry
bonds,
Page 76 U. S. 131
3. The one of their application to the particular case, on the
evidence, is all stated in the opinion of the Court, not all
consecutively in the opening of it, but all completely enough and
with distinctness from the opinion itself, in three different
parts, as the three respective topics arise to be treated of.
THE CHIEF JUSTICE delivered the opinion of the Court.
The first question to be examined in this case is one of
jurisdiction.
The suit, shown by the record, was originally instituted in the
District Court of the United States for the District of Louisiana,
where a decree was rendered for the libellant. From this decree an
appeal was taken to the circuit court, where the case was pending,
when, in 1861, the proceedings of the court were interrupted by the
civil war. Louisiana had become involved in the rebellion, and the
courts and officers of the United States were excluded from its
limits. In 1862, however, the national authority had been partially
reestablished in the state, though still liable to be overthrown by
the vicissitudes of war. The troops of the Union occupied New
Orleans, and held military possession of the city and such other
portions of the state as had submitted to the general government.
The nature of this occupation and possession was fully explained in
the case of
The Venice. [
Footnote 1]
Whilst it continued, on the 20th of October, 1862, President
Lincoln, by proclamation, instituted a Provisional Court for the
State of Louisiana, with authority, among other powers, to hear,
try, and determine all causes in admiralty. Subsequently, by
consent of parties, this cause was transferred into the Provisional
Court thus constituted, and was heard, and a decree was again
rendered in favor of the libellants. Upon the restoration of civil
authority in the state,
Page 76 U. S. 132
the Provisional Court, limited in duration, according to the
terms of the proclamation, by that event, ceased to exist.
On the 28th of July, 1866, Congress enacted that all suits,
causes, and proceedings in the Provisional Court, proper for the
jurisdiction of the Circuit Court of the United States for the
Eastern District of Louisiana, should be transferred to that court,
and heard and determined therein; and that all judgments, orders,
and decrees of the Provisional Court in causes transferred to the
circuit court should at once become the orders, judgments, and
decrees of that court, and might be enforced, pleaded, and proved
accordingly. [
Footnote 2]
It is questioned upon these facts whether the establishment by
the President of a Provisional Court was warranted by the
Constitution.
That the late rebellion, when it assumed the character of civil
war, was attended by the general incidents of a regular war, has
been so frequently declared here that nothing further need be said
on that point.
The object of the national government, indeed, was neither
conquest nor subjugation, but the overthrow of the insurgent
organization, the suppression of insurrection, and the
reestablishment of legitimate authority. But in the attainment of
these ends, through military force, it became the duty of the
national government, wherever the insurgent power was overthrown,
and the territory which had been dominated by it was occupied by
the national forces, to provide as far as possible, so long as the
war continued, for the security of persons and property, and for
the administration of justice.
The duty of the national government, in this respect, was no
other than that which devolves upon the government of a regular
belligerent occupying, during war, the territory of another
belligerent. It was a military duty, to be performed by the
President as commander-in-chief, and entrusted as such with the
direction of the military force by which the occupation was
held.
Page 76 U. S. 133
What that duty is, when the territory occupied by the national
forces is foreign territory, has been declared by this Court in
several cases arising from such occupation during the late war with
Mexico. In the case of
Leitensdorfer v. Webb, [
Footnote 3] the authority of the
officer holding possession for the United States to establish a
provisional government was sustained and the reasons by which that
judgment was supported apply directly to the establishment of the
Provisional Court in Louisiana. The cases of
Jecker v.
Montgomery, [
Footnote 4]
and
Cross v. Harrison, [
Footnote 5] may also be cited in illustration of the
principles applicable to military occupation.
We have no doubt that the Provisional Court of Louisiana was
properly established by the President in the exercise of his
constitutional authority during war, or that Congress had power,
upon the close of the war and the dissolution of the Provisional
Court, to provide for the transfer of cases pending in that court,
and of its judgments and decrees, to the proper courts of the
United States.
The case then being regularly here, we will proceed to dispose
of it.
The object of the original suit was the enforcement of a lien
upon the bark
Grapeshot created by a bottomry bond
executed by her master, one Joseph S. Clark, in favor of
Wallerstein, Massett & Co., at Rio Janeiro upon the 15th of
April, 1858.
The libel, filed by Wallerstein, Massett & Co., on the 3d of
July, 1858, alleged that the bark
Grapeshot, lying in the
port of Rio, during the month of April, 1858, was in great need of
reparation, provisions, and other necessaries to render her fit and
capable of proceeding thence on her intended voyage to the port of
New Orleans; and Joseph S. Clark, the master of the bark, not
having any funds or credit there, and the owner of the said bark
not residing in Rio, and having no funds or credit there, that the
libellants, at
Page 76 U. S. 134
the request of Clark, advanced and lent to him $9,767.40, on the
bottomry and hypothecation of the bark, at the rate of 19 1/2
percent maritime interest; that Clark, as master, did really expend
the sum borrowed for the repairing, victualling, and manning of the
bark in order to enable her to proceed to New Orleans; that the
bark could not possibly have proceeded with safety upon her voyage
without such repairs, and other necessary expenses attending the
refitting of her; that she sailed and arrived safe at New Orleans
on or about the 7th of June, 1858; and, that the bond was, at the
proper time, presented for payment to Clark, who refused to
discharge it.
Upon this libel, process was issued, and the vessel and her
freight were seized. Subsequently the vessel was sold under an
order of the court, and the proceeds, together with the freight
money, amounting, in the whole, to $13,805.85, were deposited in
the registry on the 2d of September, 1858.
On the 1st of November, 1858, George Law, the claimant of the
vessel and freight, filed his answer, denying the necessity of the
repairs and supplies, alleged to have been paid for by the money
raised upon the bottomry bond, and alleging fraudulent collusion
between the master and the lenders, to the prejudice of the
claimant. The answer set out at large the history of the Grapeshot,
from the time she left New York, on or about the 9th of February,
1857, to the date of her arrival in New Orleans, on or about the
7th of June, 1858. It represented that the bark, when she left New
York, was stout and staunch, well fitted, and supplied for her then
intended voyage to Constantinople, and for the return voyage to New
York; that instead of returning from Constantinople to New York,
the master, Clark, embezzled the freight earned in the voyage out,
and engaged the vessel in voyages for his own benefit, until he
caused her to be stripped at Rio of her copper, which was replaced
by secondhand and indifferent metal, owned by Clark, and put on her
in fraud of the claimant; that the dishonest practices of Clark
were well known at Rio, and that the libellants were fully
cognizant of them. The answer further denied the charge
Page 76 U. S. 135
of the libel that the claimant had no funds or credit at Rio,
and averred that he had credit to procure and obtain the necessary
funds, and that the master was under no necessity to resort to the
bottomry upon the vessel. The answer further alleged that there was
no inspection or survey of the vessel with reference to the
necessity for repairs, and that the alleged expenses for repairs
and provisions far exceeded the sums actually expended, of all
which the libellants had notice.
Before proceeding to examine the evidence, taken under these
pleadings, it will be proper to consider the principles of maritime
law applicable to the case.
A bottomry bond is an obligation, executed, generally, in a
foreign port, by the master of a vessel for repayment of advances
to supply the necessities of the ship, together with such interest
as may be agreed on; which bond creates a lien on the ship, which
may be enforced in admiralty in case of her safe arrival at the
port of destination, but becomes absolutely void and of no effect
in case of her loss before arrival. [
Footnote 6]
Such a bond carries usually a very high rate of interest, to
cover the risk of loss of the ship as well as a liberal indemnity
for other risks and for the use of the money, and will bind the
ship only where the necessity for supplies and repairs, in order to
the performance of a contemplated voyage, is a real necessity, and
neither the master nor owners have funds or credit available to
meet the wants of the vessel.
Sometimes bonds, bearing only the ordinary rate of interest, or
executed under circumstances more or less different from those just
stated, are called bottomry bonds, and are enforced as such,
[
Footnote 7] but the general
description just given embraces most instruments known under that
name, and is sufficiently accurate for the case presented by the
record.
Page 76 U. S. 136
There is no question in this case as to the character of the
bond; nor as to the safe arrival of the ship; nor as to the
validity of the bond if the lien can be held valid. The controversy
turns on the question of necessity for repairs and supplies, and
for credit.
We are to consider, therefore, what degree of necessity for
supplies or repairs, and what degree of necessity for credit in
that form, will warrant a master in borrowing upon bottomry.
Where the claim of the materialman is against the owner only,
and no privilege is given upon the vessel, no necessity need be
shown affirmatively. The master, in the absence of known fraud, is
fully authorized to represent the owners in all matters relating to
the ship, and it will always be presumed that supplies and repairs,
ordered by the master, were reasonably fit and proper, unless there
is clear proof to the contrary, and also proof of collusion by the
materialman.
But something more is required when the claim is against the
ship itself. Such a claim can be asserted only as a lien or
privilege upon the vessel. And the rule is that such a lien for
supplies and materials, or for money advanced for the ship, since
it is created and exists without record, or other public notice,
can only be established upon circumstances of actual necessity.
Proof of absolute and indispensable necessity, however, is not
required in order to the establishment of such a lien, where
supplies and materials are furnished on the credit of the ship, or
of the ship and owners, in a foreign port. In such cases, courts of
admiralty do not scrutinize narrowly the account against the ship.
They will reject, undoubtedly, all unwarranted [
Footnote 8] charges, but upon proof that the
furnishing was in good faith, on the order of the master, and
really necessary, or honestly and reasonably believed by the
furnisher to be necessary for the ship while lying in port, or to
fit her for an intended voyage, the lien will be supported
[
Footnote 9] unless
Page 76 U. S. 137
it is made to appear affirmative that the credit to the ship was
unnecessary, either by reason of the master having funds in his
possession applicable to the expenses incurred, or credit of his
own or of his owners, upon which funds could be raised by the use
of reasonable diligence, and that the materialman knew, or could,
by proper inquiry, have readily informed himself of the facts.
[
Footnote 10]
It has been supposed that a more stringent rule than that just
stated was sanctioned by this Court, at the December Term, 1856, in
the case of
The Sultana, reported under the title of
Pratt v. Reed. [
Footnote 11]
In that case, coal for generating steam was supplied to the
Sultana, of Buffalo, in New York, at Erie, in
Pennsylvania. The master was sole owner, and known as such by the
furnisher of the coal. The supplies were furnished from time to
time during a period of nearly two years, and formed the subject of
a running account of debit and credit extending through that time.
The evidence warranted the impression, confirmed by the fact of
sole ownership in the master, that the credit was given to the
master and not to the ship. It was held that no lien attached to
the steamer for the supplies thus furnished.
We have no doubt that the case was rightly decided. There are,
however, expressions in the opinion which, separated from the case,
appear to sanction the doctrine that, in order to the creation of a
lien on the vessel, express proof is necessary of an unforeseen
emergency creating a necessity for supplies, and also of the
existence of a necessity for credit on the ship.
But that it was not intended by the court to establish any other
rule than that previously recognized, sufficiently appears from an
opinion pronounced in the case of
The Neversink, [
Footnote 12] by the learned judge
who delivered its judgment in the case of
The Sultana.
What was said in the former case sufficiently shows that the latter
judgment was intended only
Page 76 U. S. 138
to affirm that there must be an apparent necessity for the
credit as well as an actual necessity for the supplies, and that in
the case before the court there was, in fact, no such necessity as
was essential to the creation of a lien upon the steamer. It was
not intended to deny that this apparent necessity might be presumed
from the necessity for supplies, from the general authority of the
master, and from general good faith in the particular
transaction.
It has been supposed also that the judgment of this Court in the
case of
The Bark Laura, reported as
Thomas v.
Osborn, [
Footnote 13]
required affirmative proof of the necessity of credit to the ship,
in order to the creation of a lien on the vessel. The court said,
that
"the limitation of the authority of the master to cases of
necessity, not only of repairs and supplies, but of credit to
obtain them, and the requirement that the lender or furnisher
should see to it that apparently such a case of necessity exists,
are as ancient and well established as the authority itself."
There is nothing in the language which necessarily denies that
proved necessity for repairs may be received as presumptive
evidence, sufficient, in the absence of other information, to
establish a case of apparent necessity upon which the lender or
furnisher may safely act. And the citations from the Digest and the
Consolato del Mare, made to show the antiquity of the doctrine,
seem to have reference only to the condition of the ship, and not
to the condition of the credit of the owners or master.
We are satisfied that neither of the two cases just referred to,
when properly considered in connection with the proofs before the
court, can be regarded as in conflict with the rule we have stated,
which, prior to these decisions, had been undoubtedly received upon
the general consent of authorities as the true rule on the subject
of implied hypothecation for repairs and supplies, or for advances
having the same relation to the ship.
We have been induced to state this doctrine of implied
hypothecation somewhat fully not only because it seemed
Page 76 U. S. 139
desirable to correct a common misunderstanding of these cases,
but because of the close analogy in origin, effect, and incidents
between implied hypothecation and express hypothecation by
bottomry.
It is indeed difficult to trace, either in reason or in the
authorities, any marked line of discrimination between them. In the
case of
The Aurora, decided in 1816, this Court said:
"To make a bottomry bond executed by the master a valid
hypothecation, it must be shown by the creditor 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 effecting
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 on reasonable terms with the credit of
the owner, independent of such hypothecation. [
Footnote 14]"
And it was further said in the same case that
"it is incumbent on the creditor who claims an hypothecation to
prove the actual existence of those things which gave rise to his
demand, and if it appear on his own showing or otherwise that he
has funds of the owners in his possession which might have been
applied to the demand, and he has neglected or refused to do so, he
must fail in his claim. [
Footnote 15]"
And this, undoubtedly, is the general rule also in respect to
implied hypothecation. The principles on which it rests were fully
explained and illustrated by Mr. Justice Story in 1838, in the case
of
The Fortitude. [
Footnote 16]
It has been thought that a distinction between the lien for
repairs and supplies or ordinary advances to pay for them and the
lien of bottomry may be found in that "superadded necessity" of
which the learned judge speaks in the case last cited as
distinguishing the former from the latter. There must, he said in
substance, not only be a necessity for the repairs, but a necessity
for resorting to a bottomry loan. [
Footnote 17] But this ruling must be taken with the
qualification previously established by this Court in the case of
The
Page 76 U. S. 140
Virgin, [
Footnote
18] where it was held that
"the necessity of the supplies and repairs being once made out,
it is incumbent on the owners who assert that they could have been
obtained upon their personal credit without bottomry to establish
that fact by competent proofs unless it is apparent from the
circumstances of the case."
It is only when such competent proofs have been adduced or the
practicability of raising funds on credit has been made to appear
from circumstances that the lender is held responsible for failing
to make due inquiry.
In the absence of such proofs or circumstances, an apparent
necessity for credit by bottomry must be regarded as established
when the necessity for repairs is proved.
A more substantial distinction between the implied and the
express hypothecation may perhaps be found in the greater diligence
required of the lender on bottomry than of the materialman in
inquiry concerning the necessity for repairs. The authorities on
this subject are not easily reconciled, but they may be best
harmonized, perhaps, in the proposition that if no necessity for
repairs is established, a bottomry bond will not be supported in
the absence of proof that the lender, after using reasonable
diligence to ascertain the facts, had good reason to believe and
did believe that the necessity really existed. And this is
warranted by good reason. The maritime law seeks equally the
general promotion of commercial intercourse and the most complete
security in private transactions, and neither can well be
reconciled with the support of hypothecations which partake largely
of the nature of hazard, made where the owner cannot be consulted,
at extraordinary rates of interest, agreed upon by the master and
the lender, and under circumstances favorable to collusion and
fraud, unless the lender be held to reasonable diligence in
inquiring as to the existence of the facts of distress and
necessity for repairs, which alone warrant such transactions.
The doctrine on the subject of maritime hypothecation, so far as
it seems useful to consider it in this case, may be summed up, we
think, in these propositions:
Page 76 U. S. 141
1. Liens for repairs and supplies, whether implied or express,
can be enforced in admiralty only upon proof made by the creditor
that the repairs or supplies were necessary, or believed, upon due
inquiry and credible representation, to be necessary.
2. Where proof is made of necessity for the repairs or supplies,
or for funds raised to pay for them by the master, and of credit
given to the ship, a presumption will arise, conclusive, in the
absence of evidence to the contrary, of necessity for credit.
3. Necessity for repairs and supplies is proved where such
circumstances of exigency are shown as would induce a prudent
owner, if present, to order them, or to provide funds for the cost
of them on the security of the ship.
4. The ordering, by the master, of supplies or repairs upon the
credit of the ship, is sufficient proof of such necessity to
support an implied hypothecation in favor of the materialman, or of
the ordinary lender of money, to meet the wants of the ship, who
acts in good faith.
5. To support hypothecation by bottomry, evidence of actual
necessity for repairs and supplies is required, and, if the fact of
necessity be left unproved, evidence is also required of due
inquiry and of reasonable grounds of belief that the necessity was
real and exigent.
These principles are now to be applied to the case before us.
The pleadings make distinct issues upon the necessity for repairs,
the necessity for credit, and exercise of due diligence in inquiry
by the lender.
On examining the proofs we find great contrariety in evidence,
but we think it sufficiently established that Clark, the master of
the
Grapeshot, if not guilty of actual fraud, was very
negligent of his duties as master.
It is alleged in the answer, and the allegation is supported by
credible testimony, that the voyage for which she was originally
destined was from New York to Constantinople, and back. The bark
sailed from New York in February, 1857, and the voyage to
Constantinople was accomplished
Page 76 U. S. 142
in due time, but instead of obtaining a return freight for New
York, the master engaged the bark in a new voyage. He purchased a
cargo of salt, partly at Ivica and partly at the Isle de Sal, one
of the Cape de Verde Islands, and carried it to Rio, where he lay
for some time, then returned to the islands for another cargo of
salt, with which he arrived at Rio early in January, 1858, and
remained there until April, when he finally took a cargo for the
United States; not then, however, for New York, but for New
Orleans.
There is some evidence that the new voyages were for purposes of
private speculation by the master, and this theory receives partial
confirmation from a letter written by him to the owner from
Constantinople, in which he admits that he could obtain a paying
freight for New York but states that he had determined to seek more
profitable employment for the vessel, in a voyage to Rio with salt.
On the other hand, it appears that nothing was kept secret from the
owner, unless it be the fact of private speculation, for the
letters of the master show that he was advised from time to time of
all the movements of the vessel.
These transactions are adverted to only because, though having
no direct bearing upon the case, they cast some light upon the
subsequent conduct of the master.
The liabilities, except those charged under date of October 31,
1857, which form the basis of the bottomry bond, were incurred, if
incurred at all, while the ship remained at Rio, from January 2 to
April 19, 1858. They consist of charges for supplies and
repairs.
As to the necessity for repairs, the libellants have put in the
depositions of Clark, the master, and of the furnishers at Rio. The
respondent, on his side, has put in the depositions of several
seamen who made part of the crew of the
Grapeshot.
The evidence of these witnesses cannot be reconciled. The
witnesses for the libellants are positively contradicted by the
witnesses for the respondent. Clark, for example, says that on the
last voyage to the Cape de Verde Islands and back to Rio, the
Grapeshot leaked badly, and that she lost
Page 76 U. S. 143
nine hundred bushels of salt by the water from the leaking. And,
as to the leaking, his testimony is to some extent corroborated by
that of the repairer. But three of the crew, examined on this
point, testify positively that there was no damage from leaking. As
to injuries to the bottom of the vessel, and the necessity for
recoppering, Clark says nothing in his deposition; he merely states
that the accounts of the materialmen are just and correct, and they
testify that the repairs and supplies were necessary. On the other
hand, some of the crew testify that the repairs were quite
unnecessary, that the copper put upon her was inferior to the
copper taken off, and that the vessel when nominally repaired was
less staunch than before. There is more to the same effect.
It is said that the evidence of the seamen is unworthy of
credit. It was certainly taken in a very loose and unsatisfactory
way. But this was the fault of the commissioner, and not of the
witnesses. On the main points at issue their testimony is clear and
distinct enough, and we perceive no reason for discrediting it.
We have examined it with care, and, taken in connection with the
whole evidence on both sides, it has satisfied us that we cannot
hold the necessity for repairs as established.
And this view is confirmed by the absence of any survey or
examination by public authority or by competent and disinterested
persons for the purpose of ascertaining the necessity for repairs.
In the case of
The Cognac, the bottomry bond was
authorized by the French Tribunal of Commerce at the port of repair
and also by the British vice-consul there, and yet the British
Court of Admiralty disallowed some of the items covered by the
bond. [
Footnote 19] And in
the case of
The Fortitude, the bottomry bond was supported
by evidence of a survey, called by the master and conducted by
persons skilled in nautical affairs. This was, as the learned judge
observed, "what every prudent master ought to do under the like
circumstances."
Page 76 U. S. 144
We do not say that such a survey is indispensable. No doubt
proof of the necessity and of the extent of the necessity may be
otherwise made. But where the repairs alleged to be made are
extensive and the necessity otherwise left in doubt, the absence of
such an examination will go far to warrant the conclusion that no
real necessity existed.
The evidence in respect to the bills for supplies covered by the
bottomry bond is not so strong as to the absence of necessity for
them. But there are some items included in these bills, and
particularly a very considerable item stated as a general balance
found due on a former account of the consignee of the ship, which
can hardly be regarded as subjects of bottomry.
Under these circumstances, if there were any proof affecting the
lenders with actual knowledge of the facts, it would be our duty to
pronounce the bottomry wholly invalid. For there is no evidence
that they made any inquiry whatever, and the maritime law holds
them to reasonable diligence in this respect.
But mere omission to make inquiry will not invalidate the bond
altogether. It may be good in part and void in part. And where, as
in this case, part of the repairs and supplies have been shown to
be necessary, and there is no reason to impute fraud or collusion
to the lenders, the bond, though void as to the items of which the
necessity is disproved or not shown, may properly be held valid as
to those items the necessity of which is shown.
Under the view which we have taken of this case, it is not
necessary to consider the evidence as to the necessity for credit.
It may be of use, however, to observe that while there is evidence
to show that the respondent, Law, was a man of large means and
known as such by some persons in Rio, the proof does not satisfy us
that the sum named in the bond could have been raised on his credit
at rates more advantageous than were actually obtained, much less
that the lenders in this case could by any diligence of inquiry
have learned that this might be done. It is matter of history of
which the Court will take notice, that the year 1857 was
Page 76 U. S. 145
a year of financial revulsion and distress throughout the
greater part, if not the whole, of the commercial world, the
effects of which were still felt in the spring of 1858. In such a
time, proof of the practicability of obtaining funds, in a port so
remote, upon the credit of the owner, should be clear indeed in
order to affect a lender upon bottomry with the duty of
inquiry.
On the whole, the decree of the circuit court must be reversed
and the cause must be remanded to that court with directions to
refer the accounts for repairs and supplies to one or more
commissioners experienced in commerce and of known intelligence and
probity, to ascertain, under the instructions of the court, what
portion of the repairs and supplies, actually furnished to the
ship, were really necessary, and for the amount thus ascertained
and approved by the court to enter.
Decree for the libellants.
[
Footnote 1]
69 U. S. 2
Wall. 259.
[
Footnote 2]
15 Stat. at Large 366.
[
Footnote 3]
61 U. S. 20 How.
176.
[
Footnote 4]
54 U. S. 13 How.
498, and
59 U. S. 18 How.
110.
[
Footnote 5]
57 U. S. 16 How.
164;
See also United States v.
Rice, 4 Wheat. 246; and
Texas v.
White, 7 Wall. 700.
[
Footnote 6]
Carrington v.
Pratt, 18 How. 67;
The Atlas, 2 Haggard
57-58.
[
Footnote 7]
The Trident, 1 W.Robinson 29;
Brig Draco, 2
Sumner 157; 1 Parsons on Shipping 116, 120.
[
Footnote 8]
The Cognac, 2 Haggard 387.
[
Footnote 9]
The General
Smith, 4 Wheat. 443;
Peyroux v.
Howard, 7 Pet. 324;
Brig Nestor, 1 Sumner
73.
[
Footnote 10]
The Fortitude, 3 Sumner 246-247.
[
Footnote 11]
60 U. S. 19 How.
359.
[
Footnote 12]
Southern District of New York, November, 1867.
[
Footnote 13]
60 U. S. 19 How.
29.
[
Footnote 14]
14 U. S. 1 Wheat.
96.
[
Footnote 15]
Ib., 14 U. S.
105.
[
Footnote 16]
3 Sumner 232.
[
Footnote 17]
The Fortitude, 3 Sumner 234.
[
Footnote 18]
33 U. S. 8 Pet.
554.
[
Footnote 19]
2 Haggard 377, 387.