4. The contract of bottomry is usually, in, form a bond (termed a bottomry bond) conditioned for the repayment of the money lent, with the interest agreed upon, if the ship safely accomplishes the specified voyage or completes in safety the period limited by the contract. Sometimes it is in that'of a ball of sale, and sometimes in a different shape; but it should always specify the principal lent and the rate of maritime interest agreed upon ; the names of the lender and borrower; the names of the vessel and of her master; the subject on which the loan is effected, whether of the ship alone, or of the ship and freight; whether the loan is for an entire or specific voyage or for a limited period, and for what voyage or for what space of time; the risks the lender is contented to bear ; and the period of repayment. It is negotiable. 5 C. Rob. Adm. 102.
In case a highly extortionate or wholly un justifiable rate of interest be stipulated for in a bottomry bond, courts of admiralty will enforce the bond for only the amount fairly due, and will not allow the lender to recover an unconscionable rate of interest. But in mitigating an exorbitant rate of interest they will proceed with great caution. For the course pursued where the amount of interest was accidentally omitted, see 1 Swab. Adm. 240. Fraud will induce a court of equity to set aside a bottomry bond, in England. 8 Sim. Ch. 358; 3 Mylne & C. Ch. 451, 453, n.
5. Not only the ship, her tackle, apparel, and furniture (and the freight, if specifically pledged), are liable for the debt in case the voyage or period is completed in safety, but the borrower is also, in that event, personally responsible. See 2 Blackstone, Comm. 457, 458 ; Marshall, Ins. b. 2, c. 1; Code de Comm. art. 311.
The borrower on bottomry is affected by the doctrines of seaworthiness and deviation, 3 Kent, Comm. 360 ; Phillips, Ins. sec. 988, 989; and if, before or after the risk on the bottomry bond has commenced, the voyage or adventure is voluntarily broken up by the borrower, in any manner whatsoever, whether by a voluntary abandonment of the voyage or adventure, or by a deviation or otherwise, the maritime risks terminate, and the bond becomes presently payable. 2 Sumn. C. C. 157; 3 Kent, Comm. 360. But maritime in terest is not recoverable if the risk has not commenced.
6. But in England and America the esta blished doctrine is that the owners are not personally liable, except to the extent of the %rid pledged which has come into their hands. 8 Pet. 538, 554; 1 Hagg. Adm. 1, 13. If the ship or cargo be lost, not by the enu merated perils of the sea, but by the fraud or fault of, the borrower or master, the hy pothecation bond is forfeited and must be paid.
I. The risks assumed by the lender are usually such as are enumerated in the ordi nb.ry policies of marine insurance. If the ship be wholly lost in consequence of these risks, the lender, as before stated, loses his money; but the doctrine of constructive total loss does not apply to bottomry contracts. 1 Arnould, Ins. 115.
It is usual in bottomry bonds to provide that, in case of damage to the 'ship (not amounting to a total loss) by any of the enumerated perils, the lender shall bear his proportion of the loss, viz.: an amount which will bear the same proportion to the whole damage that the amount lent bears to the whole value of the vessel prior to the damage. Unless the bond contains an express stipula tion to that effect, the lender is not entitled to take possession of the ship pledged, even when the debt becomes due ; but he may enforce payment of the debt by a proceeding in rem, in the admiralty, against the ship ; under which she may be arrested, and, in pursuance of a decree of the court, ultimately sold for the payment of the amount due.
And this is the ordinary and appropriate remedy of the lender upon bottomry.
S. In entering a decree in admiralty upon a bottomry bond, the true rule is to consider the sum lent and the maritime interest as the principal, and to allow common interest on that sum from the time such principal became due. 3 MU. C. C. 255 ; 2 Arnould, Ins. 1340. Where money is necessarily taken up on bottomry to defray the expenses of re pairing a partial loss, against which the vessel is insured, the underwriter (although he has nothing to do with the bottomry bond) is liable to pay his share of the extra expense of obtaining the money, in that mode, for the payment of such expenses. 12 Pet. 378.
9. The lien or privilege of a bottomry bond holder, like all other maritime liens, has, ordinarily, preference of all prior and subsequent common-law and statutory liens, and binds all prior interests centring in the ship. It holds good (if reasonable diligence be exercised in enforcing it) as 'against sub sequent purchasers and common-law incum brancers; but the lien of a bottomry bond is not indelible, and, like other admiralty liens, may be lost by unreasonable delay in asserting it, if the rights of purchasers or incumbrancers have intervened. 9 Wheat. 409; 16 Bost. Law Rep. 264 ; 17 id. 93, and authorities there cited ; 2 Woodb. & M. C. C. 48 ; 1 Swab. Adm. 269. The rules under which courts of admiralty Marshal assets claimed to be applicable to the pay ment of bottomry and other maritime liens and of common-law and statutory liens, will be more properly and fully considered in the article Maritime Liens, which see. But it is proper hereto state that, as between the holders of two bottomry bonds upon the same vessel in respect to different voyages, the later one, as a general rule, is entitled to priority of payment out of the proceeds of the vessel. 1 Dods. Adm. 201 ; Ole. Adm. 55 ; 17 Bost. Law Rep. 93 ; 1 Paine, C. C. 671.
10. Seamen have a lien, prior to that of the holder of the bottomry bond, for their wages for the voyage upon which the bat tomry is founded, or any subsequent voyage; but the owners are also personally liable for such wages, and if the bottomry-bond holder is compelled to discharge the seamen's lien, he has a resulting right to compensation over against the owners, and has been held to have a lien upon the proceeds of the ship for his reimbursement. 8 Pet. 538; 1 Abb. Adm. 150 ; 1 Hagg. Adm. 62. And see 1 Swab. Adm. 261; 1 Dods. Adm. 40.
The act of congress of July 29, 1850, de claring bills of sale, mortgages, hypotheca tions, and conveyances of vessels invalid against persons other than the grantor or mortgagor, his heirs and devisees, not having actual notice thereof, unless recorded in the office of the collector of the customs where such vessel is registered or enrolled, ex pressly provided that the lien by bottomry on any vessel, created during her voyage by a loan of money or materials necessary to repair or enable such vessel to prosecute a voyage, shall not lose its priority or be in any way affected by the provisions of that act. See Parsons, Maritime Law ; Abbott, Shipping, with Story and Perkins's notes ; Hall's translation of Emerigon's Essay on Maritime Loans, with the Appendix ; Mar I shall, Insurance, book 2 ; 1 Bouvier, Insti tutes, 504-509 •, 3 Kent, Comm. Lee. 49 ; 8 Pet. 538; 1 Flagg. Adm. 179; 2 Pet. Adm. 295.