The Aurora

by Joseph Story

United States Supreme Court

14 U.S. 96

The Aurora

APPEAL from the circuit court for the district of Pennsylvania. 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 Manilla; 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 Merssrs. 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 favour of Messrs. Lord & Williams, for the sum of 1,482l. 6s. 1d., and interest at nine per cent.: 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 farther 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 per cent. interest. In pursuance of this agreement, on the 17th of 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 the 23d, and a charter party on the 26th 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 pretence, that, with this advance freight, it was his intention to prosecute the plan of his original voyage, and to endeavour 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 apprized 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.

Harper, for the appellants and libellants. 1. As to the first hypothecation at Port Jackson: a bottomry bond may be taken after debts are incurred necessarily, in order to secure the person advancing the moneys. 2. The hypothecation at Calcutta was to discharge the first loan, and for further repairs. The master was not, in effect, changed before the second bond was executed. But, suppose he was, how is that to affect the first hypothecation? It attached until discharged by the new loan. The instrument passes by delivery, and the new lenders became invested with all the rights of the former holders of the bond. The present holders ought, at least, to receive so much of their money. All that lenders upon bottomry are bound to do, is, to see that a necessity actually exists at the time. How came the ship enabled to prosecute her voyage and earn freight? By the loan. The payment of the freight in advance to the master, subsequently, could not, by relation back, affect the lien acquired by a previous loan.

Sergeant, for the respondents and claimants. The power of a master to hypothecate the vessel, though necessary for the purposes of commerce, would, without limitations, be ruinous to the owner, and destructive of the purposes it was intended to subserve. It is conferred by no express delegation, but is the offspring of necessity. This necessity must be shown, to warrant the master's conduct. The owner's interest is the object of the power; the master has no authority to bind the owner or his property, contrary to his orders and his interest. 1. The master can hypothecate only in case of clear necessity, which must be clearly shown.a It is incumbent upon the party who claims to have a right under the bond, to show this necessity. A contrary doctrine would make the bond, which is nothing unless the master has the power, evidence of that power. To allow it the force even of prima facie evidence, would be to invert the law; for, then, instead of saying, that the state of necessity must be clearly shown, we should be obliged to say, the absence of necessity must be shown. 2. The master can hypothecate only when the hypothecation is the condition of the loan. The money ought to be advanced solely on the faith of the bond, and the hypothecation cannot be taken after the advances are made, without stipulating for such security. If the loan has been once made on personal credit, for the use of the ship, it cannot be afterwards secured by hypothecation; for there is, then, no existing necessity. A menace against the master, or the power

 a
  
2 Marshall on Insurance, (Condy's edit.) 741, d. Ross v. The Active. Bee's Adm. Rep. 159. Putnam v. Polly. 2 Marshall, 741, c. The Lavinia. of attaching the ship, by the creditor, will not legalize such a contract.b If the master can obtain funds by any other means, he is not authorized to hypothecate. The master can hypothecate only for the interest of the owner, and for the purpose of prosecuting the voyage.c This is a case which requires the application of the strictest principles of law; and, at the same time, illustrates the wisdom and policy of those principles, as essential to the security of trade. The hypothecation at Calcutta, so far as it is founded upon that at Port Jackson, was given, in part at least, for a pre-existing debt; and it is not for us to separate what the obligees have confounded and mixed together. As to the expenditures at Calcutta, the freight received ought to have been applied to pay them.

 b
  
2 Marshall, 741, a. Liebart v. Emperor. Ib. Rucker v. Conyngham. Bee's Adm. Rep. 341.

 c
  
2 Marshall, 741, c. Ross v. Active. Parke on Ins. 413. in rem, or by process of attachment, imply such a condition of the ship? By the universal law of the civilized world, the master is the agent of the owner, unless notice of his special instructions to the party contracting with him, can be proved. The lenders in this case had no such notice.

Harper, in reply. The principles advanced on the other side are too narrow to subserve the interests of trade; and the authorities cited do not warrant them. Any condition of a ship, disabling her from performing her usual service to the owner, if money cannot be raised in any other way to refit her, creates such a necessity as will justify a hypothecation by the master. Do not the claims of material men, of tradesmen who have furnished supplies upon the credit of the ship, of merchants who have advanced moneys for her repair, and who may all proceed

Feb. 29th.

STORY, J., delivered the opinion of the court, and, after stating the facts, proceeded as follows:

Notes