Bottomry, Bond or Contract of,

Bottomry, Bond or Contract of, is a security by which a ship and tackle is expressly mortgaged or hypothecated by the owner or master, for repairs to the ship, or for money advanced for its outfit or some other necessary purpose abroad. It is called a security by bottomry, because the bottom or keel of the ship is figuratively used to express the whole of it. The loan or debt is repayable only in the event of the ship's safe arrival at the port of destination; and in consideration of this risk, the lender or creditor exacts a premium, the amount of which depends on the nature of the adventure. If the ship be totally lost, the lender loses his money; but if she returns safely, he recovers his principal, together with interest at the rate agreed upon. These contracts are not treated as ordinary mortgages, and preferred according to the order of date; but inversely, the latest is preferred to the preceding, because it is presumed that the last loan saved the ship. Bottomry is sometimes granted in the form of a bill, sometimes as a bond, but it must always be in writing, and must state the sum advanced, with the marine interest agreed on (which often amounts to 25 per cent.), the voyage proposed, with the duration of the risk, and whether the security includes cargo as well as ship. The master's authority to grant such a bond arises only in foreign ports, and depends on the question whether the money is necessary to complete the enterprise. The owners of the ship are not personally liable for the advance, as the marine interest generally swallows up their profit, but the master is liable on his own obligation. Where the personal credit of the owner might be obtained by telegraph, the bottomry bond, granted without his authority, is void. The bottomry creditor is not subject to general or particular average. Bottomry was not known to the civil law; the law of the United States is based on that of England. Bottomry contracts, which are subjected to rigid scrutiny, are assignable and negotiable. See the works of Arnold, Parsons, Marshall, Abbott, Park, &c. on Marine Insurance; also INSURANCE, MERCHANT SHIPPING ACT, RESPONDENTIA.