Bottomry

A contract in the nature of a mortgage on a ship: when the owner ' borrows money to enable him to carry on his voyage, and pledges the keel or bottom of the ship as security for the repayment.^ "Bottom " was formerly used for ship or vessel.

Bottomry bond

The instrument which evidences a contract of bottomry. In the sense of the general maritime law, and independent of the peculiar regulations of the positive codes of different commercial nations, a contract for a loan of money on the bottom of a ship, at an extraordinary rate of interest, upon maritime risks, to be borne by the lender for a voyage, or for a definite period.^ Blackstone and others speak of bottomry contracts of the owner only, omitting those of the master, which are now the more common, and are strictly for the necessities of the ship.^ A contract by which the owner of a ship hypothecates or binds the ship as security for the repayment of money advanced for the use of the shij>.6 The contract creates a lien on the ship enforceable in admiralty on arrival at the port of destination, but void in the event of loss before arrival. The hazard being extraordinary, the rate of interest is high.' To Justify giving the bond, it is essential that there be a necessity, as, for repairs, and a necessity for resorting to the bond to procure the proper funds. There is no such necessity when the master has funds or can get funds on the credit of the owner.s The vital principle is that the case is one of unprovided and real necessity, and that neither master nor owner has funds or credit available.' 1 [4 Bl. Cora. 133; 16 Mass. 93; 44 N. H. 16. '' U. S.v. Demijohns of Rum, 8 F. E. 485 (1880). = Commonwealth v. Gavin, 1^1 Mass. 54 (1876). * [2 Bl. Com. 457. * The Draco, 2 Suran. 186, 173-89 (1835), cases. Story, J. « Braynard v. Hoppook, 33 N. Y. 573 (1885), Wright, J. 'The Grapeshot, 9 Wall. 135 (1869), Chase, C.J.; 26 Such contracts seem to have been first recognized among the ancient Bhodians. They are allowed for the benefit of commerce. When bona flde, they will be upheld by the com'ts with a strong hand. They cover accruing freight, as well as the ship itself. They are to be liberally construed.^ There is no prescribed form for a bond. Any words indicating the amount of the loan, the interest to be paid, the names of the contracting parties, the name of the vessel, the limits of the voyage as to ports and time, the nature of the risks, and the period for repayment, will ordinarily be sufficient. The lien created takes precedence over other liens, except liens for seaman's wages. The bonds are usually negotiable instruments. See Hypothecation; Ekspondentia.