alternative; the suitor in a cause of damage has none. In the case of the bottomry creditor, moreover, the risk that is incurred of losing the security is covered by the amount of the premium he is entitled to demand; and therefore, against a mortgagee or bondholder prior to the period when the damage is done, I think the successful suitor in a cause of damage has a preferable claim to be indemnified" (y). The case in which these observations were made, was one in which the claim of a suitor in a cause of damage was opposed by the lien of a bottomry bondholder for money bonâ fide lent to repair the wrongdoing vessel subsequently to the collision. The judgment was, that the owner of the innocent vessel was entitled to compensation to the extent of the value of the wrong-doing vessel before the repairs were commenced, and of such subsequent accretions to that value as had arisen from the repairs effected at the expense of the owner, but not of such accretions as had arisen from repairs subsequently done at the expense of a bonâ fide lender on bottomry without notice of the lien; and the reasoning by which the decision was supported, will illustrate the nice and discriminating equity, which governs the adjudication of these questions, by the learned Judge who now fills the chair of Lord Stowell. "The lender," continues Dr. Lushington, " at the time the application was made to him for the advances, could not possibly tell whether the vessel in distress had committed damage or not. He would, therefore, have to calculate not merely future contingencies, but to inquire into all past transactions connected with the vessel. The necessary consequence would be a material increase in the amount of the premium. Again, with regard to the case of the person who has received the damage, is not his interest benefited by the vessel being repaired and enabled to proceed to her port of destination? Is he injured in the amount of his indemnity fund? Not at all. His interest is co-extensive with the right possessed by the owners of the vessel at the time when the damage was done, and his claim is paramount to the extent of her value at that period. With respect to any subsequent accretion in the value, arising from repairs in (y) 1 W. Rob. 119. To the same effect, and in reference to the facts of the same case, is the dictum of the Chief Justice Jervis, delivering the judgment of the Judicial Committee of Privy Council the case of The Bold Buccleugh. "The interest of the first bondholder taking effect from the period when the lien attached, he was, so to speak, a part owner in interest at the date of the collision, and the ship in which he and others were interested was liable to its value at the date of the injury done, without reference to his claim. (adds the learned Chief Justice) by the collision, the interest of the claimant attached, So and, dating from that event, the ship in which he was interested having been repaired, was put in bottomry by the master acting for all parties, and he would be bound by that transaction;" that is, to the extent of being excluded from a preference over the lien of a bottomry bondholder in respect of the additional value which had been created by the expenditure of his money on the ship after the collision, but not to the extent of being postponed to a bottomry bondholder in respect of the full value of the ship as it existed at the time of the collision. See Harmer v. Bell. The Bold Buccleugh, 7 Moore's P. C. Cases, 267. done after the period when the damage was occasioned, his claim to participate in the benefit of such increase of value must depend upon the consideration how that increase arises, and to whom in equity it belongs. Against the owner who repairs his vessel at his own expense, the claim of the successful suitor would extend to the full amount of his loss against the ship and the subsequent repairs; where, however, the repairs have been effected by a stranger upon the security of a bond of bottomry, the case is altogether different; and I cannot hold, that, UNIVERSALLY, bonds so granted must give way to prior claims of damage." With respect to a claim for subsequent salvage, in competition with a claim for damage, no decision appears to have taken place. A distinction between the case of salvage, as not supporting an action in personam, and the case of wages, pilotage, and towage, has been suggested by a learned writer (2) as a probable ground of entitling it to more favour than claims for those services when also competing with a lien for damage. But though actions by salvors on the implied contract of a shipowner or goods-owner to remunerate them are now rarely resorted to, they are not unknown to the law, or objectionable in point of principle (a); and should that argument for diversity fail, it would seem difficult to make sure of the ground upon which the lien for damage, founded, like other principles of maritime law, on grounds of general expedience (b), should be admitted to priority over all other claims for subsequent service, but yield to a claim for salvage. The remuneration awarded by public authority in the Court of Admiralty for salvage service is dispensed in a grateful spirit; the risk of the lives of the salvors, their skill and daring, the wear of the machinery employed by them, and the value of the rescued property, are all remembered in the estimate of their deserts; and the possibility that a vessel in distress may be affected with a claim in respect of damage done by her, would, it may be hoped, have little weight in the calculations of men who, assured of a liberal appreciation (when allowed by law), of their hazardous service, are ready, in all emergencies, to brave the chances of success or failure. The ground, therefore, for the supposed exception from the rule is not apparent, and the rule is clear. In the case of the Chimera (c), where the proceeds of the ship and freight were insufficient to meet a decree of damage, and the seamen applied for payment of their wages, Dr Lushington said, "that on the principle that parties sustaining a loss were entitled to be reimbursed out of the proceeds of the ship and freight of the wrong-doer, so far as they extend, and that the seamen had a (z) See the article in the Law Magazine above referred to. And see post, p. 540. (a) See the text of Lord Tenterden, ante, p. 6, c. 1, s. 2. See also Newman v. Walters, 3 B. & P. 612, and 2 Chitt. Plead. 54; Smith's Mercantile Law, c. 3, s. 6; and see ante, p. 490. (b) Ante, pp. 599, 560. (c) 24th Nov. 1852. Flor, Swab. 809. See also the Linda remedy in personam, while by the statute (c) the claim of the Pickwick (the other vessel) was limited to the value of the res," he was bound to pronounce against the mariners. Where claims of towage, wages, and salvage are mixed up by the bankruptcy or insolvency of the shipowner, by whose vessel damage has been done, no certain rule appears to have been adopted by the Court of Admiralty (d). 3. Of Marshalling Assets for their Protection. In the case of competing suits the Court of Admiralty, as a Court of Equity, will marshall the assets, so as to protect one creditor against another, and prevent the election of one from prejudicing the other's claim (e). For this purpose it will compel a suitor, whose lien affects two funds, to proceed against the one to which another suitor would be unable to resort. Thus, when of two bottomry bonds, the earlier was secured on the ship and freight, and the other upon the ship and cargo,-the Court directed the earlier one to be satisfied from the ship and freight, and the later one from the cargo,—thereby securing a fund sufficient to cover both (f). So, where there were three bonds-one upon the ship, the second upon the cargo, and the third upon the ship-the Court directed the latest bond to be paid preferably out of the proceeds of the ship; the other bond upon the ship to be paid out of what remained of such proceeds; and the bond upon the cargo to be paid out of the freight and cargo. And upon a supervening question, viz., out of what funds the wages, pilotage, and towage were to be paid, the Court adhered to the principle of its former decision, but directed the wages to be paid out of the gross freight and the proceeds of the ship rateably, and the balance of the proceeds and freight to be first applied to the third bond (on the ship), and the balance of the freight and so much of the cargo as should be necessary, in satisfaction of the second bond. The effect of this decision in the circumstances of the particular case was to leave the first bond unprovided for; a result from which there was no escape but by making the owner of the cargo,-" who (in the words of the judgment) can never be affected by any bond, till the ship and freight are exhausted, and ought never to be made liable for wages, pilotage, and towage, directly,"-answerable to the claim of bondholders who had lent their money without looking to his pro (c) 53 Geo. 3, c. 159. (d) The Benares, 7 Notes of Cases, 52. (e) Williams on Executors, b. 1, p. 4, c. 2, s. 2. Toller, b. 3, c. 8. (f) The Trident, 1 W. Rob. 35. perty for their security (h). No matter, indeed, what the form of the security on the cargo may be, the Court will not make it available to the bondholder until the ship and freight are exhausted. A bond upon cargo is only valid because with it, by intendment of law, the ship and its incident, the freight, are hypothecated (i). The cargo cannot be liable in law unless the ship is (j); for a cargo, said Dr. Lushington, in the case of the Constancia, cannot be hypothecated for the benefit of the ship, that is, for the purpose of exonerating the ship from any part of the burthen belonging to her (k). As to freight, which is incident to the ship (7), and as such part of the bondholder's security, the Court will, on the petition of the owner of the cargo, when hypothecated solely, although the freight be not proceeded against, direct it to be brought in and applied before resort to the cargo, in satisfaction of the bond; and the same course will be taken on the deficiency in the proceeds of the ship, when ship, freight, and cargo have been jointly hypothecated and arrested (m). The ground upon which this practice rests, appears to be, that the right of the master to hypothecate arises out of the necessities of the ship with which he has been entrusted, for the double purpose of earning freight for her owners, and performing their contract with the charterer or shippers of goods. It is his duty to carry the cargo to its destination. By the sale or hypothecation of any part of it, that object as respects the interest of its owner is pro tanto frustrated, and for the same reason that the proceeds of a sale of cargo applied to the ships's necessities must be made good by the shipowner (n)-the shipowner's property must be first applied to discharge the demand of him who has lent his money for the ship's use. The object, in short, of bottomry, is to protect the interest of the shipowner, and enable him to perform his contract; his property, therefore, should be first liable on the bond by which the loan to him is secured. It is otherwise in the case of salvage, by which owners of ship and cargo are alike benefited, and therefore contributory pari passu to the salvor's remuneration (o). But though the value of the ship and freight must be absorbed before the cargo can be resorted to, it is competent to the bondholder to arrest the cargo in the first instance, in order to secure the whole property over which the bond extends. A principle analogous to that which governs the Court of Admiralty in marshalling assets for the protection of the weaker claimant, is applied also to the protection of the owners of two or more res against a creditor, so that one of them may not profit by the imposition of too large a share of burthen on the other. If a creditor has (h) The Constancia, 4 Notes of Cases, 285. (i) The Constancia, 4 Notes of Cases, 287, 512. (j) The Oswald, 14 Jurist. 96. (k) The Constancia, 4 Notes of Cases, 512. (1) The Dowthorpe, 2 Wm. Rob. 80; and the Prince Regent, ante, p. 125, there cited. Leslie v. Guthrie, 1 Scott, 683; and Stephenson v. Dowson, 3 Beav. 342. (m) The Constancia, 4 Notes of Cases, 520. The Dowthorpe and The Prince Regent, ibid. 84. The Mary Anne, 4 Jurist, 94, 95. The Bonaparte, 7 Notes of Cases, 55, suppl. (n) See ante, p. 141, 142. a double security, e.g. upon freight and ship belonging to different persons, the court will not allow him to elect upon which of the two his claim shall be enforced, but will apportion the weight of debt between them (p). 4. Of their Duration and Extinguishment. There seems to be no certain limit to the duration of a maritime lien. It travels with the res into whosesoever possession it may come. It is not impaired by a voluntary or extrajudicial sale (g); the purchaser takes his bargain with its liability to the liens which affect it. Were it otherwise, a lien would be effectual or become nugatory at the option of him on whose property it attaches. "It is manifest," said Dr. Lushington, " in the case of the Bold Buccleugh (r), that the mere change of property does not exonerate the ship from liability to be sued. No one can reasonably contend that a sale after a collision, with the knowledge of the fact, would produce that effect; because, if so, the owners of a vessel doing damage would have nothing to do but to sell her for the purpose of taking from the party aggrieved his best security for compensation. Therefore, as a general principle, I am prepared to deny, that it is true that a mere transfer of a vessel, which has been guilty of doing damage, can at all diminish the liability of that vessel to be arrested." A lien is extinguished by payment, by bail given in the Court of Admiralty to an action instituted to enforce it (s), and by sale of the res under the authority of a competent court. Delay or want of diligence may also enable a prior petens to obtain a decree in his favour and thereby work a forfeiture of a lien, which, if advanced pendente lite, would have been admitted, on the principles above explained, to compete with that of the earlier suitor; but in all other cases a lien enures, whatever may be the delay of the creditor, so long as the ownership of the res is unchanged (t). Whether, in the case of unreasonable delay before a change of ownership, a lien arising out of damage would be available in Admiralty to compromise the rights acquired by third parties in good faith, may, in the absence of express decisions upon the point, be considered doubtful (u). A maritime lien is not transferable, and cannot be revived for the benefit of one by whom it has been discharged. It has been so (p) The Dowthorpe, 2 Notes of Cases, 264. The Constancia, 4 Notes of Cases, 512. And see The Fortitude, 2 Notes of Cases, 524. (q) Harmer v. Bell, 24th April, 1852. The Sidney Cove, 2 Dod. 500. The Batavia, 2 Dod. 300. The Heart of Oak, 1 Notes of Cases, 115. The Repulse, 4 Notes of Cases, 170. The John and Mary, Swab. 532. (r) 7 Notes of Cases, 451. (8) The Kolamazoo. July, 1851. |