1893. The general effect of these Acts may (so far as this question of liability is concerned) be stated as being to prevent such companies (regarded as common carriers) from entering into special contracts limiting their common law liability with respect to the receipt, forwarding, and delivery of goods, unless the conditions of the special contract are reasonable (c), and the contract is a written contract, signed by or on behalf of the consignor. The reasonableness of the conditions is determined by the judge, before whom the action comes to be tried, in which the special contract is raised as a defence by the company (d). But, of course, as regards passengers' luggage, the contract of carriage being for the carriage of the passenger himself as well, if he interfere with the luggage, he may himself be taken to have contributed to the loss. of it, and when, e.g., he takes it into the carriage with him, he may reasonably be deemed to have assumed the entire custody of it; and the liability of the carrying company in such cases is very difficult to determine, being dependent on the particular facts in each case of loss (e). There are also, as regards the carriage of such substances as petroleum and dangerous explosives generally, specific statutory provisions which it does not fall within the scope of this discussion to refer to.

With regard to carriers BY SEA:-It is to be observed, that the liability of a ship-owner-though he is in contemplation of law a common carrier, if the ship be ordinarily hired to carry goods-does not usually rest on the common law rule, but on a special contract created between the parties, by the bill of lading or charterparty

(c) Shaw v. Great Western Railway, [1894] 1 Q. B. 373.

(d) Peek v. The North Staffordshire Railway (1863), 10 H. L. C. 473; Great Western Railway Company v. McCarthy (1887), L. R. 12 App. Ca. 218.

(e) Bergheim v. G. E. Rail. Co. (1873), 3 C. P. D. 221; G. W. Rail. Co. v. Bunch (1888), L. R. 13 App. Ca. 31; Meux v. G. E. Railway, [1895] 2 Q. B. 387.

Such contract

which usually attends a shipment of goods. is commonly framed so as to exempt the carrier by sea from loss or injury occasioned by the act of God, or of the king's enemies, or by the perils of the sea. The Merchant Shipping Act, 1894, s. 502, provides, that no owner of any sea-going ship, or of any share therein, shall be liable to make good any loss or damage, occurring without his own actual fault or privity, to goods or things on board, by reason of fire breaking out on board; or to any gold, silver, diamonds, watches, jewels, or precious stones, occasioned by robbery or embezzlement, unless the true nature and value of such articles shall have been declared

in writing to the master or owner. By s. 503 of the Act of 1894 it is further provided that, in respect of any loss or damage to goods which occurs without his own actual fault or privity, no shipowner shall be answerable to an aggregate amount exceeding 81. for each ton of the ship's tonnage, such tonnage in the case of sailing vessels being their registered tonnage, and in the case of steam vessels their gross tonnage, without deduction of engine

room.

CHAPTER V.-SECTION V.

THE CONTRACT OF LOAN.

THE Contract for the loan of money (which was called mutuum by the civilians in order to distinguish it from the commodatum already spoken of) differs from the ordinary contract of bailment, inasmuch as the money which forms its subject is not to be re-delivered to the lender, or disposed of according to his direction, but is to be applied to the use and according to the wishes or the necessities of the borrower, the borrower yielding afterwards to the lender an equal sum by way of re-payment; in addition to which re-payment, there is commonly also yielded an increase, by way of compensation for the use of the sum advanced, which increase is called interest. [In former times, it was considered by many good and learned men, that all increase of money by way of interest was against conscience, for that it was forbidden by the law of Moses ;] but the objection has been at all times little regarded, and perhaps has been the least regarded of all people by the very people to whom the law of Moses is an object of the supremest regard. [And the practice of taking interest on loans has in general been sanctioned by all legislators both antient and modern, and there has prevailed at the most a desire to restrict by positive enactment the exorbitancy of the interest which might be lawfully taken. For example, the Romans, whose law of the Twelve Tables prescribed fanus unciarium (or about 8 per cent. per annum) afterwards allowed centesima, that is to say, 12 per cent. per annum; but Justinian reduced the general rate to 4 per cent., allowing higher interest (rising even to 12 per

[cent.) to be taken where the hazard was greater (a). Lord Bacon was desirous of introducing a similar policy into England (b), where in general the amount of interest was limited, all interest beyond the legal limit having been prohibited as usury. The legal rate under the 37 Hen. VIII. c. 9, was 10 per cent., which limit was retained by the 13 Eliz. c. 8 ; but the 21 Jac. I. c. 17, reduced it to 8 per cent., and the 12 Car. II. c. 13, to 6 per cent. And lastly, the statute 13 Anne, c. 15, reduced it to 5 per cent., which last-mentioned rate continued the maximum legal rate, in this country,] until all the laws in restraint of .usury were repealed, as will be presently mentioned.

There were, however, at all times certain cases in which the legal rate of interest (even before the repeal of the laws against usury) was subject to no restriction whatever, e.g., First, when the contract was made in a foreign country, in which case the interest was payable according to the law of the country in which the contract was made (e); and secondly, when the right to recover the money lent was, by the terms of the loan, put in jeopardy, which latter species of hazard, being a very different matter from the ordinary risk of insolvency, was esteemed a sufficient consideration for allowing a rate of interest higher than the legal rate.

The peculiar hazard referred to occurred in the case of bottomry (or respondentia) bonds, and in the case of annuities upon lives; and these two peculiar species of loans, it will be convenient to here consider more at large.

First, [BOTTOMRY :-This species of loan is when the owner of a ship takes up money on it to enable him to carry on his voyage, and pledges the keel or bottom of the ship (partem pro toto) as a security for the repayment (d). This pledge may be given, and a valid contract of bottomry entered into, even by the master of the vessel,

(a) Cod. 4, 32, 36; Nov. 33, 34, 35.

(b) Essays, ch. 41.

S.C.-II.

K

(c) 1 Eq. Ca. Ab. 289.

(d) See The Atlas (1827), 2 Hag. Adm. 53.

[in a case of absolute necessity, and to the extent only of the necessity (e). It is one of the terms of this contract of bottomry, that, if the ship be lost, the lender loses also his whole money; but if it returns in safety, then he shall receive back his principal, and also the premium or interest agreed upon, which premium or interest, whatever its amount, has always been allowed by reason of the extraordinary hazard run by the lender (ƒ).

A respondentia bond differs from a bottomry bond (properly so called), in that the former extends not to the ship and tackle, but only to the goods and merchandize; so that, in general, only the borrower himself personally is bound by it.

Contracts of an analogous character are also sometimes effected on the mere hazard of the voyage itself, as when a man lends a merchant 1,000l., to be employed upon a voyage, upon the condition of being repaid with extraordinary interest, in case the voyage be safely performed; the interest or recompense which is payable to the lender on this kind of agreement being formerly called sometimes fonus nauticum, and sometimes usura maritima (g). But since the repeal of the usury laws, the distinction as to interest is, of course, immaterial.

Secondly, ANNUITIES FOR LIVES:-These are contracts in which the borrower of money, being unable to give the lender any tangible security for the return of the money at any given period of time, undertakes or promises (in effect) to repay annually, during his life, some part of the money borrowed, together with interest for so much of the principal as annually remains unpaid, rendering also some additional compensation for the hazard run by the lender of losing the whole or a portion of the principal by the borrower's death. The right to recover the principal being thus in

(e) The Pontida (1884), 9 P. D. 177.

(f) The Atlas, supra; The

Great Pacific (1869), L. R. 2 P. C. 516.

(g) Malynes, Lex Mercat. b. 1. ch. 31.