The articles hypothecated on a bottomry contract may be, the body, tackle, furniture, provisions, or car go of the ship, or any part thereof; or both the ship and cargo may be pledged. On respondentia, indeed, money may be borrowed without hypothecating any thing ; and the 'borrower may take specie on board with him, for the purpose of employing it in trade during the course of the voyage. But it is essential to the nature of these contracts, that either the money lent, or something equivalent to it, should be exposed to the perils of the sea, otherwise there is no risk, on the part of the lender, to entitle him to an higher than the legal rate of interest ; and if the money be lent, not upon the ship or goods, but upon the mere hazard of the voyage, the contract becomes of the nature of a wager. The same principles, however, which militate against gaming insurances, apply equally to wagers in the form of bottomry loans ; and accordingly such prac tices have been, in some degree, restrained by different acts of the legislature : 16 C. II. c. 6 ; 22 C. II. c. 11. § 12 ; 7 Geo. I. c. 21. § 2 ; 19 Geo. II. c. 37. § 5. Freight may be hypothecated upon a bottomry contract ; and seamen may borrow money on any goods which they have on board, but not upon their wages.
The hazard to be run by a lender on bottomry, or at respondentia, consists of the perils of the sea in general ; comprehending all those accidents and mis fortunes to which ships at sea are liable, and which cannot be prevented by human foresight or precau tion. These arc, for the most part, specified in the condition of the bond, and are nearly the same with those to which the underwriter is liable upon a poli cy of insurance ;—tempests, pirates, fire, capture, and every other misfortune, excepting only such as arise either from the defects of the thing itself, on which the loan is made, or from the misconduct of the bor rower. Nothing, however, but a total loss will dis charge the borrower. The obligation continues, notwithstanding any damage which the goods may sustain from the perils of the sea ; nor is there any deduction on account of such damage. According to the opinions of Lords Mansfield and Kenyon, (Vid. Joyce V. Williamson, B. R. Mich. term, 23 Geo. III. and Walpole v. Ewer, Sitt. after Trim 1789) there is, by the law of England, neither aver age nor salvage upon a. bottomry bond. This doc trine is also supported by Mr Park, on the authority of the statute 19 Geo. II. c. 37. § 5. which al lows the benefit of salvage to lenders upon ships or goods going to the East Indies ; clearly sheaving, as that author observes, that there was no such thing at the common law, otherwise there was no occasion to make such a provision. The soundness of this doctrine, however, has been called in question by Mr Serjeant Marshall, who is of opinion, that the statute above mentioned introduced no new principle into the law either of insurance or of bottomry contracts, but merely restored them to their original and proper use, from which a spirit of gaming had perverted them.
And the same author observes, that he has not been able to discover any decided ease, or authority in the law, to warrant the doctrine laid down by the learn ed judges, that the lend.:.r of money on bottomry was not entitled to the benefit of salvage at common law.
We have already said, that the lender is not liable for any loss arising from the defects of the thing upon which the loan is made, or from the misconduct of the borrower. Thus, if the ship be not sea worthy, and perish by age, rottenness, or any such cause, or if the goods perish of themselves, or if the voyage be changed by order ol the owners, or any loss happen by the barratry ol the master, or by the misconduct of the merchant, in such cases the borrower is not discharged, unless there be an express stipulation, which shall render the lender liable for every loss not occasioned by the act of the borrower. The lender is only answerable for losses that occur within the time and place specified in the contract ; and if the ship deviate from the course of her voyage, without necessity, he will not be liable for any loss that may subsequently happen. if the period of the com mencement and end of the risk be not specified in the bond, the risk, as to the ship, shall commence from the time of her setting sail, and continue till she an chors in safety at the port of her destination ; and as to the goods, from the time of their being shipped, until they are safely landed.
The rate of marine interest allowed to be reserved on bottomry contracts was, by the old Roman law, left indefinite, until the time of Justinian, who, in these and certain other special cases, permitted the larger interest, called usura centesima, or one /ier cent. monthly, to be taken. (Voct ad Pandect. Lib. 22. Tit. 1. SE 2.) In modern times, the rate of marine interest has not been regulated according to any precise standard ; but is always allowed, by course both of law and equity, however exorbitant it may seem, provided the money lent be bona fide put in risk. The interest commences and terminates with the risk ; and, upon the cessation of the risk, if the borrower delays the payment, common interest be gins, ipso jure, to run on the principal, exclusive of the marine interest. See H. Bodini, Diss. de Code meria. Halae, 1697. Cocceii, Diss. de Codemeria, 1683. Magen's Essay on Insurances. Park's Sys tem of the Law of Marine Insurances. Marshall's Treatise on the Law of Insurance. (x) Borromny, Bill or Bond of, is the deed or wri ting between the parties in a contract of bottornry. (Sec the preceding article.) For the form of such a deed, see Jacob's Law Diet. and Marshall on Insu rence,vol. ii. Append. p. 718. (x)