BOTTOMRY is the hypothecation or pledge of a vessel for the payment of a debt. The creditor has no right to take possession of the ship until the expiration of the time for which the loan is made, and then (under a bottomry contract in the usual form) only by the intervention of an admiralty court. If the loan is not repaid at the stipulated time, the lender applies to an admiralty court, which (the truth of the claim being established) de crees a sale of the ship to satisfy the debt. The conditions of such a contract usually are that, if the ship is not lost or destroyed by those risks which the lender agrees to run, the debt is to become absolute. The risks assumed by the lender are usually the same as are enumer ated in a common policy of insurance. If the ship is wholly lost in consequence of these risks, the lender loses his loan. In case of a partial damage, the bottomry bond usually pro vides that this damage shall be borne by the lender in the proportion of the amount loaned to the value of the ship. If this amount is equal to half the value of the ship, the lender is to bear half the amount of such .loss, etc.
As the lender thus assumes a certain risk, he is justly entitled to a greater interest than if he did not thus take the hazard of the loss of the whole loan; and this is called "marine in terest') He is entitled to the usual rate of interest on his loan, in addition to the usual premium of insurance for the same voyage or period. The stipulation for such a rate of marine interest is not a violation of the laws against usury, for it is not merely a compen sation for the use of the money lent, but also for the risk assumed. The shipowner may borrow money on bottomry whether his vessel be in port or at sea. But the captain of the ship, as such, cannot so borrow when in the port where the owner resides or near enough to consult him on any emergency. In any other port he may pledge the ship on bottomry for the purpose of raising money necessary for repairing, supplying and navigating her, if he can obtain it in no other way. If he borrow thus without necessity the bond is void and the lender can look only to the personal re sponsibility of the captain.