Grant v Owners of the Yacht St George; The St. George; Douglas v Owners of the Yacht St. George; The St. George
| Jurisdiction | England & Wales |
| Judgment Date | 27 July 1926 |
| Date | 27 July 1926 |
| Court | Probate, Divorce and Admiralty Division |
Probate, Divorce, and Admiralty Division
Lord Merrivale, P.
Grant v. Owners of the Yacht St George; The St. George; Douglas v. Owners of the Yacht St. George; The St. George
The GratitudineENR 1801, 3 C. Rob. 240, at 266
The Royal Arch 18 Swa. 269, 277, 278
The CarnakELR 3 Mar. Law Cas. (O.S.) 103, 276 21 L. T. Rep. 159 (1869) L. R. 2 P. C. 312
The MerseyENR 1837, 3 Hagg. Adm., 404
Australasian Steam Navigation Company v. MorseDID=ASPMELR 1872, 1 Asp. Mar. Law Cas. 407 27 L. T. Rep. 257 L. R. 4 P. C. 222
The BonaparteENR 1853, 8 Moo. P. C. 459
The AlexanderENR 1812, 1 Dods. 278
The Helgoland 1859, Swa. 491
The Duke of BedfordENR 1829, 2 Hagg. Adm. 234
Smith v. Bank of New South Wales; The StaffordshireDID=ASPMELR 1872, 1 Asp. Mar. Law Cas. 365 27 L. T. Rep. 46 L. R. 4 P. C. 194
Collins v. Lamport 1864, 1 Mar. Law Cas. (O.S.) 153 11 L. T. Rep. 497 13 W. R. 273
Law Guarantee Society v. The Russian Bank for Foreign TradeDID=ASPMELR 10 Asp. Mar. Law Cas. 41 92 L. T. Rep. 435 (1905) 1 K. B. 815
The ManorDID=ASPMELR 10 Asp. Mar. Law Cas. 446 96 L. T. Rep. 871 (1907) P. 339
The Ripon CityDID=ASPMELR 8 Asp. Mar. Law Cas. 304 77 L. T. Rep. 98 (1897) P. 226
Merchant Shipping Act 1894 (57 & 58 Vict. c. 60), s. 34.
Bottomry bonds Mortgage existing at the time of making bonds Authority of master
164 ASPINALL'S MARITIME LAW CASES. Adm.] Grant v. Owners of the Yacht St. George ; The St. George (Adm. June 16, July 14, 27, 1926. (Before Lord Merrivale, P.) Grant v. Owners of the Yacht St. George ; The St. George ; Douglas v. Owners of the Yacht St. George ; The St. George, (a) Bottomry bonds - Mortgage existing at the time of making bonds - Authority of master - Bonds not authorised by mortgagee - No notice to mortgagee - " Owner " - Whether security of mortgagee prejudiced by the bonds- Necessity-Advances made prior to making of bonds - - Advances for insurance allotment moneys and for expenses of owners in England -Merchant Shipping Act 1894 (57 & 58 Vict. c. CO), s. 34. By sect. 34 of the Merchant Shipping Act 1894 it is provided that except as far as may be necessary for making a mortgaged ship or share available as a security for the mortgage debt, the mortgagee shall not by reason of the mortgage be deemed to be the owner of the ship or share, nor shall the mortgagor be deemed to have ceased to be the owner thereof. Bottomry bonds were given to the plaintiffs by the master of the St. G. to secure necessary advances made by the plaintiffs to the St. G. in the port of B., At the time of giving the bonds the St. G. was mortgaged to the interveners. Held, that, assuming that the bonds in fact prejudiced the security of the mortgagees, nevertheless sect. 34 did not deprive the master of his power to bottomry the ship without the authority of the mortgagee. Held, further, that if the lender knew of the existence of the mortgage, he should if practicable communicate with the mortgagee, but upon the facts of the case, reasonable means were taken to inform the. mortgagee of what was being done, and the lenders had reasonable ground for belief that the mortgagee consented, although notice of the bonds had not actually reached him. One of the plaintiffs was a director of the company which owned the St. G., and was himself the registered managing owner of the vessel. Held, that he was not thereby prevented from lending upon bottomry. Of the sum of 1000/. secured by one of the bonds, 450l. had been advanced three months before the bond was given, without promise of bottomry. Field, that the bond was valid for 550/. only. Of the sum of 2000l. secured by the other bond, 1000/. was expended in England in payment of insurance and allotment moneys and other purposes of the owners in London, and 113/. was paid to the master in repayment of sums advanced by him. Held, that the bond was not valid in respect of these amounts, and was valid only for the sum of 761/. identified as having been spent upon necessaries for the impending voyage. (a) Reported by GEOFFERY HUTCHINSON, Esq., Barrister-at-Law. ASPINALL'S MARITIME LAW CASES. 165 Adm.] Douglas v. Owners of the Yacht St. George ; The St. George. [Adm. Actions upon Bottomry Bonds. In the first of these actions which were tried together, the plaintiff, William Alexander Grant, claimed the sum of 1000/. upon a bottomry bond dated the 4th Nov. 1924, and made at Balboa, Panama, by the master of the yacht St. George. In the second action the plaintiff, Major Archibald John Angus Douglas, claimed the sum of 2000l. upon a similar bond. By a mortgage dated the 31st March 1924 the St. George was mortgaged to Ernest Harry Gates to secure the sum of 25,000/. advanced by him. The owners of the St. George, Research Expeditions Limited, did not appear, but the executors of Mr. Gates intervened and contested the validity of the bonds. It appeared that in 1922 an association called the Scientific Expeditionary Research Association was formed for the purpose of conducting an expedition to various places in the Pacific, making cinematograph films and carrying passengers for cruising trips in return for passage money. In Feb. 1923 the defendant company, Research Expeditions Limited, was formed by members of the association, and in due course acquired the yacht St. George for the purpose of conducting their expedition. The plaintiff, Major Douglas, was a director of Research Expeditions Limited, and became registered managing owner of the St. George. Funds were provided from various sources, but chiefly by means of overdrafts which were guaranteed by Mr. Gates to the extent of 2500/., in return for which he received by way of security the mortgage above referred to. On the 9th April 1924 the St. George set out upon a voyage to Teneriffe, the West Indies, Panama, Galapagos, Pitcairn, the Cook Islands, Tahiti and the Marquesas, with a return voyage via Panama and the Azores. The expedition was intended to last some 304 days. The St. George carried five passengers, of whom the plaintiff, Mr. Grant, was one. The passage money for the trip was 700/., but several passengers were conveyed at reduced rates. By the terms of its contracts with the passengers, the company was under no liability if the proposed cruise was cancelled or altered. In Aug. 1921 the St. George was at Balboa, unable to proceed upon her voyage for lack of funds, and therefore the plaintiff, Mr. Grant, advanced the urn of 200/. which enabled the ship to make a cruise to Corba. In September the St. George was again at Balboa in need of funds, and a further 250/. was advanced by Grant to enable her to proceed upon a cruise to Gorgona. In October the St. George, returned to Balboa, where she was again without funds. Correspondence by letter and cables proceeded with the directors in England, who suggested that the money should be raised by means of bottomry bonds. It appeared that communications passed between the directors and a Mr. Siggs, a solicitor, who was at the same time solicitor for the defendant company and Mr. Gates, and that Siggs suggested that money might be obtained on bottomry. Siggs in his evidence stated that Mr. Gates was unaware that the bonds were going to be given. The plaintiff, Mr. Grant, then made a further advance of 550/., and the plaintiff, Major Douglas, advanced a sum of 2000/., which he obtained from his bankers in London. Of the sum of 2000/. advanced by Major Douglas, 1000/. was placed to the credit of the defendant company's account in London, and was. expended by them upon insurance of the St. George, allotment moneys of the crew, and general expenses in London. Of the balance expended in Balboa, 113l. was paid to the master of the St. George in repayment of sums advanced by him: it appeared that a sum of 701/. only was expended upon necessary stores and disbursements. On the 14th Nov. 1924 the master of the St. George gave the plaintiffs the bottomry bonds sued upon to secure their respective advances. Upon the return of the St. George to this country the plaintiffs commenced the present actions. The executors of Gates intervened, and by their defence alleged that it was unnecessary for the St. George to prosecute her voyage, but that she was engaged upon a cruise. Further they alleged that under and by virtue of the mortgage the mortgagee was the owner of the St. George, and for the purpose of making the bonds sued upon the mortgagee was to be deemed to be the owner, and that the master of the St. George was not the agent of the mortgagee and had not his authority to enter into the bonds and failed to...
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