bottomry and respondentia

When studying legal matters it often takes an "outsider"-- someone who is not an attorney--to shed fresh light on a legal problem. Dr. George Steckley, professor of history at Knox College in Galesburg, IL since 1973, has done that for the subject of bottomry bonds. These bonds were legal instruments executed by masters or owners of ships obliging them to pay a hefty premium on lenders' money if the ships returned safely from their trade voyages (If the ships were completely destroyed, the masters/owners had no liability to the lenders). For 30 years Steckley has studied the workings of the English Admiralty Court, where disputes over payment of these bonds were adjudicated. His 2001 article, "Bottomry Bonds in Seventeenth-Century England," published in the American Journal of Legal History, represents the thorough and painstaking work of someone who has spent his life in the archives of the High Court of Admiralty. His article draws conclusions about the workings of these bonds from close manuscript study of 58 cases brought during sixteen years in the 17th century sampled for his study.

The advantage of studying the work of a scholar who has devoted his life to mastering an archive is that you learn all kinds of special details you would never learn from someone just "surveying" the field. For example, Steckley tells us that Admiralty judges (whom he calls "civil" judges--a term that makes us lawyers cringe, because it suggests a continental legal system) convened early in the 17th century at the abandoned church of St. Margaret's, Southwark, before the Doctors' Commons near St. Paul's became its regular venue later in the century. The 58 decisions were those which referred to explicit pledges (of ships) or bonds under seal, but this suggests to Steckley that lenders may have brought as many as 400 suits on such instruments in these sixteen years--since only about 1/7 of the cases went all the way to judgment. It doesn't take long, by extrapolating, to discover that bottomry actions were really "where the action was" in 17th century admiralty law, and admirality law in the 17th century was often considered "where the action was" in law itself. So significant was the influence of the High Admiralty Court that by the end of the 17th century the common law courts sought successfully to curtail admirality's jurisdiction. Thus, for example, a cause of action resulting from the collision of two ships on the Thames (a rather frequent occurrence in those days) would have been decided in the admirality court in the early 17th century but in the King's Bench or Court of Common Pleas by 1700. In addition, bottomry cases, which were all the rage in the 17th century, gradually faded out by 1700 due to the development of new financial instruments and partnerships arrangements, thus making unnecessary the pledging of the exorbitant premiums in order to secure loans on a ship. Several points from Steckley's helpful study call for mention.

1. In contrast to some significant voices in contemporary scholarship, Steckley argues that for most of the 17th century Admiralty judges permitted mariners to raise and spent money on bottomry bonds whether or not an "emergency" situation could be shown or whether such bond money was spent on "necessities." These limitations may have accurately reflected the admiralty world of the 18th century but not the 17th. Bottomry credit was also available in the 17th century for emergencies, such as enabling a 17th century sea captain to get out of a Tenerife prison in order to return with goods to England to pay off a previous purchase of wheat.

2. The premium rates for bottomry contracts varied widely throughout the century, especially since it was a century rife with wars and privateering. Bottomry lenders were, as it were, providing both capital and casualty insurance for the ships, and therefore demanded high premiums for their loans. A 1691 estimate had the average bottomry rate of 36% on principal, but the figure varied widely, as Steckley argues. Richard Jennings, a London specialist in bottomry lending, insured three separate trips in 1657, to Newcastle, Dundee and Danzig. The 30% interest rate charged for the Newcastle voyage might not seem too exorbitant until one realized that the trip was completed in just three months. A trip from Hull to the Straits of Gibraltar and back to London in that same year charged 42% interest on principal, but since that trip only took six months, an effective annual rate of 84% was charged. This was in the highly dangerous "war decade," however. In 1676, a certain Captain William Dunster borrowed and insured at an annual rate of only 21% for a journey all the way from England to Newfoundland.

3. Lenders most often won their cases on bottomry loans/bonds at the Admiralty Court. As long as there was a written contract with a stipulated premium, and no evidence either of payment or destruction of the vessel, lenders had "slam dunk" cases. Because the action was in an admiralty court, lenders could bring an action in rem (against the ship) and not simply in personam (though they did that, too). Bottomry cases were also decided expeditiously (average of about six months), though the fees paid by the losers generally exceeded those in the common law courts.

4. By the end of the century, however, the common law courts had cast a jealous eye on the Admiralty Court, seeking jurisdiction (and the resultant fees) of claimaints that had earlier brought their cases in admiralty. The major device used by the common law courts was to restrict what we lawyers call the subject matter jurisdiction of the Admiralty Court. In the 1674 case of Coomes v. Jenkinson, the common law court denied Admiralty jurisdiction over the bottomry bond in question and:

"defined the two limits which most civil lawyers would concede in the eighteenth century: that the Admiralty court could enforce a bond only if it were signed by the master in a foreign port and used for necessities of the ship."

These two limitations did not exist earlier in the century. Thus, the scope of the Admiralty Court was significantly reduced, as it related to bottomry bonds. This limitation of the Court's jurisdiction was part of the effort in the late 17th century to center most judicial action in Westminster. What was left at Doctors' Commons were disputes over sailors' wages--important, no doubt to those who were fighting over their wages but not nearly as significant as the bottomry bond cases.

Conclusion

Thus, by 1700, just when the notion of property and fire insurance was beginning to develop, the notion of bottomry begins to fade from the common law consciousness. But once the 18th, and especially the 19th century dawned, with advances in communication and telegraphy, there was no need for masters of ships and owners to hypothecate their boats. All they needed to do was to "wire London." Thus, bottomry slipped out of our societal and legal consciousness, and would have remained nothing more than a curious word to me, had I not taken the effort to, so to speak, get to the bottom of it.

1749