Bottomry

2 definitions found

From The Collaborative International Dictionary of English v.0.48 [gcide]:

  Bottomry \Bot"tom*ry\, n. [From 1st {Bottom} in sense 8: cf. D.
     bodemerij. Cf. {Bummery}.] (Mar. Law)
     A contract in the nature of a mortgage, by which the owner of
     a ship, or the master as his agent, hypothecates and binds
     the ship (and sometimes the accruing freight) as security for
     the repayment of money advanced or lent for the use of the


     ship, if she terminates her voyage successfully. If the ship
     is lost by perils of the sea, the lender loses the money; but
     if the ship arrives safe, he is to receive the money lent,
     with the interest or premium stipulated, although it may, and
     usually does, exceed the legal rate of interest. See
     {Hypothecation}.
     [1913 Webster]

From Bouvier's Law Dictionary, Revised 6th Ed (1856) [bouvier]:

  BOTTOMRY, maritime law. A contract, in nature of a mortgage of a ship, on 
  which the owner borrows money to enable him to fit out the ship, or to 
  purchase a cargo, for a voyage proposed: and he pledges the keel or bottom 
  of the ship, pars pro toto, as a security for the repayment; and it is 
  stipulated that if the ship should be lost in the course of the voyage, by 
  any of the perils enumerated in the contract, the lender also shall lose his 
  money but if the ship should arrive in safety, then he shall receive back 
  his principal, and also the interest agreed upon, which is generally called 
  marine interest, however this may exceed the legal rate of interest. Not 
  only the ship and tackle, if they arrive safe, but also the person of the 
  borrower, is liable for the money lent and the marine interest. See 2 Bl. 
  Com. 458; Marsh. Ins. B. 21 c. 1; Ord. Louis XIV. B. 3, tit. 5; Laws of 
  Wishuy, art. 45 Code de Com. B. 2, tit. 9. 
       2. The contract of bottomry should specify the principal lent, and the 
  rate of marine interest agreed upon; the subject on which the loan is 
  effected the names of the vessel and of the master those of the lender and 
  borrower whether the loan be for an entire voyage; for what voyage and for 
  what space of time; and the period of re-payment. Code de Com. art. 311 
  Marsh. Ins. B. 2. 
       3. Bottomry differs materially from a simple loan. In a loan, the money 
  is at the risk of the borrower, and must be paid at all events. But in 
  bottomry, the money is at the risk of the lender during the voyage. Upon a 
  loan, only legal interest can be received; but upon bottomry, any interest 
  may be legally reserved which the parties agree upon. See, generally, Metc. 
  & Perk. Dig. h. t.; Marsh. Inst. B. 2; Bac. Abr. Merchant, K; Com. Dig. 
  Merchant. E 4; 3 Mass. 443; 8 Mass. 340; 4 Binn. 244; 4 Cranch, 328; 3 John. 
  R. 352 2 Johns. Cas. 250; 1 Binn. 405; 8 Cranch, 41 8; 1 Wheat. 96; 2 Dall. 
  194. See also this Dict. tit. Respondentia; Vin. Abr. Bottomry Bonds 1 Bouv. 
  Inst. n. 1246-57.