Summary: Courts of admiralty have jurisdiction over ocean going vessels and all shipping on the U.S. Great Lakes and all inland water ways. The five types of admiralty actions are: suits in rem; suits in personam; criminal cases; limitation proceedings; and prize causes (war time, only). Suits in admiralty are the subject of complaints called “libels.” The person who brings the complaint is the “libellant” and the subject of the suit is the respondent or defendant.
Bonds used in admiralty are called “stipulations” (or, stips). The stips used in admiralty are the subject of this treatment.
Stipulation for Costs
STIPULATION FOR LIBELLANT'S (Plaintiff's) Costs – Suit in Rem
WHEREAS, a libel will be filed in this court on or about [date], by [name of libellant] against the [name of ship], her engines, boilers, etc. for the reasons and causes in the said libel mentioned; and praying that process may issue against said [name of ship], and the said libellant and [name of Surety] stipulator, parties hereto, hereby consenting and agreeing that in case costs are awarded against the said libellant or said stipulator, the decree therefore, not exceeding the sum of $___ may be entered against them and each of them, and thereupon execution may issue against their and each of their goods, chattels, lands, and tenements or other real estate.
NOW, THEREFORE, it is hereby stipulated and agreed for the benefit of whom it may concern, that the libellant herein and the stipulator undersigned [Surety Company] shall be and each of them is hereby bound in the sum of $___, conditioned that they shall pay all costs and expenses which shall be awarded against the said libellant, and/or stipulator undersigned, or any one of them, by decree of this court and in case of appeal by any appellate court.
Analysis
This bond is required of a plaintiff to start an action (a libel) in admiralty. Such an action is brought to enforce a claim against a ship. The bond is analogous to an attachment bond.
The indicated bond is for costs only. A slightly different bond is available if the plaintiff is seeking costs and damages.
Stipulation for Value in an Agreed Amount
RELEASE OF SHIP by STIPULATION FOR VALUE — In Agreed or Appraised Amount
WHEREAS, a libel was filed on the _____ day of 20__, by [name of libellant] against [name of ship] for the reasons and causes in said libel mentioned;
AND WHEREAS, a claim to said vessel has been filed by [name], and the value thereof has been fixed by agreement at the sum of $____ for the purpose of bonding, as appears by the subjoined consent, and the parties hereto consenting and agreeing that, if the libellant recover, the decree may be entered against them and each of them for an amount not exceeding the above agreed amount, with interest thereon from this date, and that thereupon execution thereof may issue against their and each of their goods, chattels, lands and tenements, or other real estate.
NOW, THEREFORE, the condition of this stipulation is such, that if the claimant herein, and the stipulators undersigned, residing at _____ shall abide by all orders of the court, interlocutory or final, and pay the amount awarded by the final decree rendered by the court and any appellate court, if an appeal intervene, with interests (and costs) as aforesaid, then this stipulation to be void, otherwise to be in full force and effect. The total liability under this stipulation shall not exceed $_____.
Analysis
This bond allows for the release of a ship if the defendant can post a stipulation in an amount equal to the libel. The value of the ship is fixed by appraisal.
Discharge or Release of Libel
DISCHARGE OR RELEASE LIBEL—SPECIAL BOND TO MARSHAL
KNOW ALL MEN BY THESE PRESENTS, that _____, claimant, and [name of company], stipulator, having its principal place of business in the city of _____, are held and firmly bound unto _____, Marshal of the United Stares for the [district] in the sum of [double the amount claimed in the libel] $_____ to be paid to the said _____, Marshal, his successors, administrators, and assigns, for the payment of which well and truly to be made, we bind ourselves, and each of us, our and each of our heirs, executors, administrators, jointly and severally, firmly by those presents. Sealed with our seals and dated this _____ day of _____.
WHEREAS, a libel has been filed in the District Court of the United States on the _____ day of _____ by _____, Libellant, against the brig [name of ship], her tackle, apparel, and furniture, for the sum of $_____, on which process of attachment has been issued, and the said brig, her tackle, apparel, and furniture, is in the custody of the Marshal, under the said attachment, and
WHEREAS, _____, claimant of said brig, has applied for a discharge of said brig from the custody of the Marshal, and has filed a claim claiming the said brig, as owner, and has filed a stipulation for the claimant's costs, pursuant to the rules and practices of the said court.
NOW, THEREFORE, the condition of this obligation is such, that if the above bound _____, claimant, shall abide by and perform the decree of this court, then. . .
Analysis
A ship owner may make an advance filing of the above bond to cover the release of any libel that might occur. This bond is written on an annual basis. The rate for this bond is subject to adjustment at the end of the year, based on the number of libels brought against the ship during the year.
Stipulation to Appear
BOND FOR APPEARANCE — TO MARSHAL ON ARREST OF PERSON
KNOW ALL MEN BY THESE PRESENTS that we, X.Y.Z, and _____, stipulator, are bound unto _____, Marshall of the [district] in the sum of $___ (dollars).
WHEREAS, a libel has been filed in the District Court of the United States for the [district] on this _____ day of _____ by A.B.C. against the above bound X.Y.Z., in a certain suit, civil and maritime, wherein their is alleged to be due and owing to the said libellant damages amounting to $_____, and
WHEREAS, the said X.Y.Z. has been arrested by the Marshal of this District, under process issued pursuant to the prayer of the said libel;
NOW, THEREFORE, the condition of this obligation is such, that if the above bound X.Y.Z. shall appear in the said suit before the said District Court of the United States for the [district], on the day of _____, at the Federal Building in the city of _____, and shall at all times render himself amenable to the process of the court during the pendency of the action, and to such process as may be issued, then. . .”
Analysis
This bond guarantees that the subject of a suit in admiralty (typically a ship owner or captain) will appear in court if sued.
Limitation Proceedings
STIPULATION FOR LIMITATION OF LIABILITY
WHEREAS, a libel and petition was filed on the _____ day of _____, by _____ and others, owner of the schooner Marie, praying for a limitation of their liability on account of any loss, damage or injury arising out of a certain collision between said schooner Marie and the steamer Little James, and the value of the interest of the petitioners in said schooner, and her freight pending, has been duly fixed at the sum of _____ Dollars for the said schooner, and _____ for said freight, in all _____ Dollars, as appears from the report of the appraiser, now on file in this court; and the parties hereto herby consenting and agreeing that, in case of default or contumacy on the part of the petitioners or their sureties, execution for the above appraised amount, with interest thereon from this date, may issue against their goods, chattels and lands;
NOW, THEREFORE, the condition of this stipulation is such, that if the petitioners herein and _____ [surety] _____, whose principal place of business is in the City of _____, the stipulator undersigned, shall abide by all orders of the court, interlocutory or final, and pay into the court the above sum of _____ Dollars, with interest, whenever ordered by this court or by any appellate court if any appeal intervene, this stipulation to be void, otherwise to remain in full force and effect.
Analysis
When a claim for damages is filed against a ship, its owners may do one of three things:
1. they may transfer their interest in the ship to a trustee for the benefit of the claimants. If they do this, then the claimants have no further right of action against the owners.
2. they may file for a limitation of their liability to a value to be determined by an appraiser.
3. they may file the above bond in order that a court may “stipulate” to the value of the ship.
Suretymaster relates the following historical anecdote regarding the sinking of the Lusitania in 1915:
”Probably the largest and most interesting Limitation of Liability petition was filed by the Cunard Line of London in connection with the sinking of the Lusitania by a German torpedo May 1, 1915. At time of petition, claims filed amounted to $5,883,479. Since the vessel was a total loss, Cunard sought to have its liability limited to $100,000, as recovery items were only about $93,000, consisting of value of lifeboats saved ($768), passenger fares ($86,624), and freight moneys of $5,904. The $100,000 was pro-rated among claimants.”
General Average or Average Contribution
“Average” is the marine term for “loss.” The principle of “general average” or “average contribution” is a reimbursement guarantee. When a ship is threatened by the “perils of the sea,” it is very possible that the crew of the ship will have to jettison some of the cargo in order to save the ship. When this happens, those whose property was saved (including the owners of the ship) must contribute toward the reimbursement of those who were not so fortunate. The loss — or average — of the jettisoned property is a “general average.”
Jenne's Suretymaster says that the principle of “general average” dates back to the time of the ancient Greeks. It can be documented as far back as 900 B.C. to the Greek island of Rhodes (thus, the “Rhodian Code”). In 200 A.D., Roman lawyer Paulus recorded the following sentence from the Rhodian Code: “If for the sake of likenings a ship a jettison of goods has been made, what has been made for all shall be made up by contribution of all.”
General Average Guarantee
GENERAL AVERAGE GUARANTEE
WHEREAS, certain merchandise was shipped by ABC Carloading Company on the Steamship Empress of Casanovia, sailing from the Port of New York to Galveston and Houston, Texas, and
WHEREAS, in the prosecution of her voyage, engine trouble developed during a storm, and upon grounding on a reef she suffered a list, necessitating a jettison of a portion of said cargo, and other expenses, and
WHEREAS, said merchandise is subject to certain general claims by way of General Average, or otherwise;
NOW, THEREFORE, in consideration of the delivery from the said Steamship to said ABC Carloading Company of the said merchandise without requirement of a deposit, the undersigned hereby guarantees the payment of all the proper General Average, Salvage, and/or Special Charges for which the said goods are liable, not exceeding the sum of _____ Dollars.
Analysis
When a shipper arranges for transport of cargo, he or she is required to sign a “general average agreement.” Then, the shipper must make a cash deposit or post a bond guaranteeing payment of his/her share of any general average. In the above bond, the surety guarantees that the shipper, ABC Carloading Company, will contribute toward any general average.
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