The Grapeshot

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 re-established 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.^[19]

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,

Ou 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 aud 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.^[19]

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 re-establishment 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 intrusted as such with the direction of the military force by which the occupation was held.'

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 ease then being regularly here, we will proceed to dispose of it.

The object of the original suit was the enforcement of a lien upon thp 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

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.^[19]

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;^[15] but the general description just given embraces most instruments known under that name, and is sufficiently accurate for the case presented by the record.

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 material-man 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 material-man.

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^[19] 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 lieu will be supported;^[15] unless

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. Peed.^[15]

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 ease 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,^[16] 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 judgmeut was intended only

It has been supposed also that the judgment of this court in the case of The Bark Laura, reported as Thomas v. Osborn,^[19] 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

It is, indeed, difficult to trace, either iu 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 iu the ease that such repairs or supplies could be procured mi reasonable terms with the credit of the owner, independent of such hypothecation.”^[19]

Aud it was further said, in the same case, that “ it is iucumbent 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. ”^[15]

And this, undoubtedly, is the general rule also iu respect to implied hypothecation. The principles on which it rests were fully explained aud illustrated by Mr. Justice Story, in 1838, in the case of The Fortitude.^[16]

It has been thought that a distinction between the lien for repairs aud supplies, or ordinary advances to pay for them, and the lien of bottomry, may be found in that “super-added necessity” of w'hich 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.^[17] But this ruling must be taken with the qualification previously established by this court in the case of The

In the absence of such pi’oofs 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 material-man 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:

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.^[19] And in the ease 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.”