. Council, respecting Danish ships. This was decided by the King's Bench against the insured.1 This case, which is of importance in its bearing on the insurable interest of captors, is Routh v. Thompson, 11 East, 426. In pursuance of an order in Council of September, 1807, by which all Danish ships were directed to "be detained and brought into port," a Danish ship was captured by a British privateer and carried into Lisbon, where her original cargo was sold, and some repairs on her were made. She was then loaded with another cargo and sent to London by the captors. She sailed from Lisbon on the 3d of November, and insurance was effected on her by the plaintiff as agents of the captors, on the 12th of the same month. On the day the ship sailed, a formal declaration of war had been made by Great Britain against Denmark. The vessel being lost on her homeward voyage, this action on the policy was brought, the plaintiffs averring the interest, in the first count, to be in the captors, in the second, to be in the crown. The sole question was, whether the captors, as such, had, under the circumstances, an insurable interest. It was contended that they had: first, because they had a possession coupled with a well-grounded expectation of a grant from the crown; and second, because such possession rendered them liable, either to the crown or to the foreign owner, for the safe custody of the ship, and therefore gave them an interest in her safety. "As to the first point," said Lord Ellenborough, "as the ship had been taken, not as a prize of war after a declaration of hostilities, but merely under an order in Council to detain and bring into port," the captors had no claim, as in the Omoa case; that, under these circumstances, they could claim nothing as of right from the crown, and even if the ship had arrived in safety would have had nothing "but the chance of a grant." It was accordingly held, that they had no insurable interest, because, as his lordship concisely remarked: “A man has no right to an indemnity because he has lost the chance of receiving a gift." The second ground was held inapplicable, because here a formal declaration of hostilities had intervened before the loss, "which at once vested the right of ownership in the crown, put an end to all claim on the part of foreign owners, and freed the captors, as agents for the crown, from all liability for acts done within the scope of their authority, which it did not appear that they had in any degree exceeded." But where a ship is taken as a prize of war, and the captors have a right under the prize acts, it is held in Stirling v. Vaughan, 11 East, 619, that they have an insurable interest on that ground. We have dwelt on these cases, because they are exceedingly instructive upon the difficult question, what will render an expectancy sufficient to create an insurable interest in the property to which the expectation is attached. But the main question raised in those cases would seem to be settled in the United States against an insurable interest in prizes, unless there be a law giving a share in them, or an actual grant from the government.1 SECTION VII. The Insurable Interest of a Lender on Bottomry and Respondentia. LOANS on bottomry, or respondentia, are in the strictest sense maritime loans. They are governed by rules which were originally the usages of ship-owners and merchants, and have been adopted and confirmed by courts, and systematized by such principles of the general law of contracts as were found applicable to them. A loan on bottomry 2 is a loan on the security of the ship. A loan on respondentia 3 is a loan on the security of the goods. The Joseph, 1 Gall. 545; S. C. 8 Cranch, 451, in which Mr. Justice Story says: "The sole and exclusive right to all prizes rests in the government, and no individual can acquire any interest therein, unless under its grant and commission; and all captures, therefore, made without such grant and commission enure to the use of the government, by virtue of its general prerogative." 2 The Atlas, 2 Hagg. Adm. 48, 53; Scarborough v. Lyrus, Latch. 252, Noy, 95. In Blaine v. The Charles Carter, 4 Cranch, 328, Chase, J., said: "A bottomry bond made by the master vests no absolute indefeasible interest in the ship on which it is founded, but gives a claim upon her, which may be enforced with all the expedition and efficiency of the admiralty process." See also Johnson v. Shippen, 2 Ld. Raymond, 982; Johnson v. Greaves, 2 Taunt. 344; U. S. v. Delaware Ins. Co., 4 Wash. C. C. 418. 8 This instrument is sometimes in the form of a bill of sale, more usually in the form of a bond, and is almost the same thing in respect to the goods which a bottomry bond is to the ship. See The Gratitude, 3 Rob. Adm. 240, 260; The Osmandi, 3 W. Rob. 198, 214; The Nostra Senora del Carmine, 29 Eng. L. & Eq. 572. The master has no authority to give a bond on the cargo alone. If he does, the ship and freight are first liable, and then the cargo, because it is the same as if he had given a bond on the ship, freight, and cargo. La Constancia, 4 Notes of Cases, 285. And, where a bond was given on the ship and cargo, it was held that the freight was also liable. The Prince Regent, cited 2 W. Rob. 83. But in both cases it is of the essence of these maritime loans that the debt is not recoverable if the ship be lost, or if the goods be lost. So far as it is a loan on security, it may be likened to a pledge or a mortgage. But a pledgee must have and keep possession of the pledge; while a lender on bottomry or respondentia never takes possession of the ship or goods, the very purpose of such loans being to enable the ship to go on her way and carry the goods to their destination. A mortgagee may or may not take possession of his security. But the essential difference between these contracts is that already intimated. Whether the property pledged or mortgaged be or be not destroyed, the borrower is still liable. But if the ship or goods hypothecated under these maritime contracts are destroyed, the borrower loses his debt. It is in fact, by the terms of the contract, paid by their loss. It is obvious, therefore, that the lender on bottomry or respondentia has an insurable interest in the ship 1 1 The Atlas, 2 Hagg. Adm. 48; Jennings v. Ins. Co. of Penn., 4 Binney, 244; Greeley v. Waterhouse, 19 Maine, 9; Leland v. The Ship Medora, 2 Woodb. & M. 92, 107; Rucher v. Conyngham, 2 Pet. Adm. 295, 303; The Brig Draco, 2 Sumn. 157; Bray v. Bates, 9 Met. 237; The William and Emmeline, Blatchf. & H. Adm. 66; The Brig Atlantic, 1 Newb. Adm. 514; The Emancipation, 1 W. Rob. 124; Stainbank v. Fenning, 11 C. B. 51. In The Nelson, 1 Hagg. Adm. 169, the sum was to be paid within one month "after the ship arrived at her port." This was held to be a sufficient description of a sea risk. In Simons v. Hodgson, 3 B. & Ad. 50, the bond, after reciting that the vessel had received damage, and that the master had borrowed £1,077, proceeded as follows: "I bind myself, my ship, her apparel, tackle, &c., as well as her freight and cargo, to pay the above sum with £12 per cent. bottomry premium; and I further bind myself, said ship, her freight, and cargo, to the pay ment of that sum with all charges thereon, in eight days after my arrival at the port of London; and I do hereby make liable the said vessel, her freight and cargo, whether she do or do not arrive at the port of London, in preference to all other debts or claims, declaring that this pledge or bottomry has now, and must have, preference to all other claims and charges, until such principal sum, with £12 per cent. bottomry premium,. and all charges are duly paid.” Held,. reversing the judgment of the Court of Common Pleas, 6 Bing. 114, that this was an instrument of bottomry, that the words "my arrival" must be understood to mean "my ship's arrival," and that the words, "I make liable the said vessel, &c., whether she do or do not arrive at London," were intended only to give the lenders a claim on the ship, in preference to other claims, in case of the ship's arrival at some other than the destined port, and not to provide for the event of the loss of the ship. or the goods, for even stronger reasons than those which would give this interest to the pledgee or mortgagee.1 It is, however, equally obvious, that, if the contract be invalid, it gives the lender no hold upon the ship or the goods, and he has therefore no insurable interest in them, whether the contract still leaves the borrower liable or not.2 It becomes. important therefore to look at those rules of the law-merchant which determine whether these contracts are valid or void. This topic belongs more particularly to the law of shipping; and it will be enough if we now indicate these rules and principles without attempting to present them fully. It was once a question, whether a bottomry bond could be made by the owner in the home-port. They were originally made only by the master in a foreign port, when no other means were left to supply the urgent necessities of the ship. As where the ship if not repaired could not proceed on her voyage, and there was no way to raise the means of repair except by borrowing on bottomry. Practice, however, sufficiently sanctioned by adjudication, has established the rule, in this country at least, that the owner may make a bottomry bond in the home port, and this without any necessity, and before the ship has ever sailed. The law-merchant, which is now a part of the common law, permits the lender to receive any amount of interest which the parties may agree upon, unless its exorbitancy 1 See Harman v. Vanhatton, 2 Vern. 717; Williams v. Smith, 2 Caines, 13; S. C. 2 Caines, 110; 1 Emerigon, 237, c. 8, § 11; Kenney v. Clarkson, 1 Johns. 385; Glover v. Black, 3 Burr. 1394, 1 W. Bl. 396. * See Maude & Pollock on Ships and Seamen, 216; Glover v. Black, 3 Burr. 1394; 1 W. Bl. 396. Wilmer v. The Smilax, 2 Pet. Adm. 295, note; The Brig Draco, 2 Sumn. 157; Thorndike v. Stone, 11 Pick. 183; Greeley v. Waterhouse, 19 Maine, 9. In The Duke of Bedford, 2 Hagg. Adm. 294, the bond was given by the owner of the ship, who was on board, at a foreign port. The master was also on board, and received the supplies as necessary, but refused to sign the bond. A suit to dispossess the captain had previously been instituted. The court held that the bond was valid. See also The Barbara, 4 Rob. Adm. 1; The Mary, 1 Paine, C. C. 671. And if in such a case the owner is also master, although he professes to contract as master, he confers the same rights as if he gave the bond as owner. The Ship Panama, Olcott, Adm. 343. * Greeley v. Waterhouse, 19 Maine, 9; The Mary, 1 Paine, C. C. 671; The Brig Draco, 2 Sumn. 157. But see Greeley v. Smith, 3 Woodb. & M. 236, 254. So of a respondentia bond. Conrad v. Atlantic Ins. Co., 1 Pet. 386; The Brig Bridgewater, Olcott, Adm. 35; The Ship Panama, Olcott, Adm. 343. indicates either fraud or oppression, without subjecting the contract to the laws against usury. It has been even said, that, unless more than legal interest is charged by the contract, it is not a loan on bottomry; but this has been denied by Marshall, C. J. If, 1 Thorndike v. Stone, 11 Pick. 187; Conrad v. Atlantic Ins. Co., 1 Pet. 386, 437. Leland v. The Medora, 2 Woodb. & M. 92, 107; The Mary, 1 Paine, C. C. 671. In The Emancipation, 1 W. Rob. 124, 140, Dr. Lushington said: "I am aware that it is not absolutely necessary that a bottomry bond should carry maritime interest, and that a party may be content with ordinary interest; but when the character of an instrument is to be collected from its contents, and where the argument in support of the bond is, that the advance of the money was attended with risk, it is a material circumstance that only an ordinary rate of interest should be demanded. It is impossible to conceive that any merchant, carrying on his business with ordinary care and caution, would be content to divest himself of all security for the loan of his money but a bottomry bond, and ask no greater emolument than the ordinary interest of £6 per cent., if the repayment of such loan was to depend upon the safe arrival of the vessel at the port of her destination after performing such a voyage." In this case only legal interest was stipulated for, and the repayment of the loan did not depend on the safe arrival of the vessel. The bond was held invalid. See also Stainbank v.. Fenning, 11 C. B. 51; Jennings v. Ins. Co. of Penn., 4 Binney, 244. It does not appear very distinctly from the case of Selden v. Hendrickson, 1 Brock. C. C. 396, whether the bond was given on legal or maritime interest, though the former seems to be the more correct view, the decree being for the amount of the bond with seven per cent interest, that being the legal interest at the port where the bond was given; and Marshall, C. J., said: "In fact I can conceive no reason why a master may not, for the success of the voyage, hypothecate the vessel to secure a debt carrying only legal interest, in any case where he might bind the owner personally." See also The Brig Atlantic, 1 Newb. Adm. 514. In the case of The Hunter, Ware, 249, money was advanced, on the personal credit of the owner, for refitting the ship, and a bond subsequently given. The court held that the bond was invalid, but, on the libel being amended, rendered a decree for the sum advanced, with legal interest. Mr. Justice Ware said: "If the court has authority to separate the good from the bad, and to reduce the maritime premium, when an oppressive advantage has been taken of the necessities of the borrower, is it quite certain that it may not, in the exercise of its equitable powers, render judgment in a case like the present for the principal sum advanced with land interest? See also the remarks of Mr. Justice Story in the case of The Virgin, 8 Pet. 538, 550. But in the case of The Brig Ann C. Pratt, 1 Curtis, C. C. 340, where a sum of money was advanced on the faith of a bond, and subsequently a bond was made out in which a much larger sum was inserted, in order to deceive the underwriters, and two sets of accounts and vouchers were made out, Mr. Justice Curtis held the bond invalid, on the ground of fraud, and |