Action of 5 October 1804 The Battle of Cape Santa Maria ( also known as the " Battle of Cape St Mary " ; in Spanish " Batalla del Cabo de Santa María " ) was a naval action of 5 October 1804 ' that took place off the southern Portuguese coast , in which a British squadron under the command of Commodore Graham Moore attacked a Spanish squadron commanded by Brigadier Don José de Bustamante y Guerra , in time of peace , without declaration of war between the UK and Spain . Background . Under the terms of a secret convention Spain had to pay 72 million francs annually to France , until it declared war on Britain . The British had learned of the treaty , and knew it was likely that Spain would declare war soon after the arrival of the treasure ships . Since the British also knew that by law the fleet could only land at Cádiz , as well as its place and approximate time of departure from South America , it was not difficult to position a squadron to intercept it . Bustamante had set sail from Montevideo on 9 August 1804 with four frigate s loaded with gold and silver , as well as much other valuable cargo . On 22 September Vice Admiral Lord Collingwood ordered Captain Graham Moore , commanding the 44 - gun frigate , to intercept and detain the Spanish ships , peacefully , if possible . Moore ' s ship arrived off Cadiz on 29 September and was joined on 2 October by , and by and the day after . In line abreast they patrolled the approaches to Cádiz . The battle . At dawn on 5 October , the Spanish frigates sighted the coast of Portugal . At 7 a . m . they sighted the four British frigates . Bustamante ordered his ships into line of battle , and within an hour the British came up in line , to windward of the Spaniards and " within pistol - shot " . Moore , the British Commodore , sent Lieutenant Ascott to the Spanish flagship " Medea " , to explain his orders . Bustamante naturally refused to surrender , and impatient of delays , at 10 a . m . Moore ordered a shot be fired ahead over the bows of " Medea " . Almost immediately a general exchange of fire broke out . Within ten minutes the magazine of the " Mercedes " exploded destroying the ship , and killing all but 40 of her 240 crew . Within half an hour the " Santa Clara " and the " Medea " had surrendered , and the " Fama " broke away and trying to flee , the " Medusa " quickly followed . However , Moore ordered the faster " Lively " to pursue , capturing the " Fama " a few hours later . The three frigates were taken to Gibraltar , and then to Gosport , England . The results . Some consider the action an act of piracy . Spain declared war on Great Britain on 14 December 1804 , only to suffer a catastrophic defeat less than a year later at the Battle of Trafalgar in October 1805 . Napoleon , having crowned himself Emperor on 2 December , gained Spain as an ally in his war against Britain . In practical terms , the British interception of the four Real Armada frigates represented the end of an era for Bourbon Spain and regular specie shipments from the Empires New World mines and mints . The squadron to which " Mercedes " belonged was the last of its kind that the world would see : a Spanish treasure fleet moving bullion from the New World Viceroyalties to the Iberian kingdoms . Under the terms of the Cruizers and Convoys Act of 1708 ships captured at sea were " Droit s of the Crown " and became the property of their captors , who received the full value of the ships and cargo in prize money . However , since technically Britain and Spain were not at war at the time of the action , the Admiralty Court ruled that the three ships were " Droits of the Admiralty " , and all revenues would revert to them . The four Spanish ships carried a total of 4 , 286 , 508 Spanish dollar s in silver and gold coin , as well as 150 , 000 gold ingots , 75 sacks of wool , 1 , 666 bars of tin , 571 pigs of copper , seal skins and oil , although 1 . 2 million in silver , half the copper and a quarter of the tin went down with the " Mercedes " . Still , the remaining ships and cargo were assessed at a value of £900 , 000 ( equivalent to £ today . ) . After much legal argument an ex gratia payment was made amounting to £160 , 000 , of which the four Captains would have received £15 , 000 each ( around £ at present day values . ) . The " Medea " was taken into the Royal Navy as ( later renamed HMS " Imperieuse " ) , " Santa Clara " as and the " Fama " as . In March 2007 the Florida - based company Odyssey Marine Exploration recovered 17 tons of gold and silver from the " Mercedes " , insisting that it had been found in international waters and therefore beyond the legal jurisdiction of any one country . The Spanish government branded the Odyssey team " 21st century pirates " and in May 2007 launched legal proceedings arguing that the wreck was protected by " sovereign immunity " which prohibits the unauthorized disturbance or commercial exploitation of state - owned naval vessels . In June 2009 the Federal Court in Tampa found against Odyssey and ordered the treasure to be returned to Spain as has been done on 25 February 2012 .