This action, technically at a time of peace with Spain, was one of the most controversial of the Napoleonic War. Four Spanish frigates with a rich shipment of gold, silver and other high value cargo from Montevideo were making for Cadiz. The value carried was ultimately destined for France and therefore potentially for use against the British. Four British frigates were sent to intercept and the two squadrons met off Cape Santa Maria, southern Portugal, on 5 October. The senior British captain, Graham Moore of the 44-gun 'Indefatigable', asked the Spanish admiral, Don Jose Bustamenta y Guerra, to surrender. When he refused, action commenced and within ten minutes the Spanish ‘Nuestra Senora de las Mercedes’ (36 guns) had blown up with the loss of all but one officer and 45 men. Half an hour later the Spanish ‘Medea’ (40 guns and their flagship) and ‘Santa Clara’ (40) both surrendered. The Spanish ‘Fama’ (34) tried to escape but also surrendered after she was chased by the British ‘Lively’ (38, Captain Graham Eden Hamond). The total value of the prize taken, at sale, was about £900,000 in 1804 value, one of the largest of the period and equivalent to over £35 million today.

British losses were minor: two men killed and four wounded in 'Lively' and three men wounded in 'Amphion' (32, Captain Samuel Sutton). The Spaniards had 388 casualties: two men killed and 10 men wounded in 'Medea', 11 killed and 50 wounded in 'Fama'; seven killed and 20 wounded in 'Santa Clara' and 238 killed in the explosion of the 'Mercedes.
All three captured ships were taken into the Navy, 'Medea' becoming the 'Imperieuse' and 'Santa Clara' the 'Leocadia': 'Fama' retained that name as anew British 'Fame' was already being built.

Considered an act of piracy in Spain, but a 'necessity of war' in England, the action made all four captains wealthy men but hastened Carlos IV of Spain's formal declaration of war against Britain as an ally of Napoleon on 12 December 1804. Sartorius has arranged the eight ships of the two opposing squadrons across the canvas in pairs. In the right foreground the ‘Lively' fires into the ‘Santa Clara’. Ahead of them is the exploding ‘Mercedes’ with men avoiding the blast out on her bowprit and the stern of the British ‘Amphion’ beyond her. To the left and ahead the British ‘Indefatigable’ and Spanish ‘Medea’, on the right, are in close action. Beyond them the British ‘Medusa’ (32, Captain John Gore) and Spanish ‘Fama’ are also firing at each other. The painting is signed and dated ‘F. Sartorius 1807’, in red, lower right.