Bottomry

A bottomry bond is a contract entered into in order for the master to secure a loan of money on the ship upon maritime risks which are to be borne by the lender. It takes effect at the termination of the voyage and at the port or place specified in the document. One of the conditions of the bond is that in the event of the loss of the vessel before reaching port to which it is bound, the bond cancels itself; but this risk may be provided against by the lender of the money insuring the bond. Oftentimes the freight and the cargo are included in the bond, and in such a case the bond is called a Respondentia Bond or Bond of Bottomry and Respondentia. In the latter case the holder's lien is first on the ship, next on the freight, and last on the cargo. The prerequisites to the validity of the bottomry bond given by the master of a vessel are, that it is given in the absence of the ship owner and at such a distance from his home, combined with such circumstances as to make it impossible to consult him in relation to it without injurious delay; that the money, repairs, or supplies for which the bond is given are necessary for the ship to complete her voyage. In the case of two or more bonds given on the same voyage, the last one takes precedence for payment, and so on in retrograde order.