Hypothecation by bottomry is at once one of the most ancient and one of the most common transactions of shipping. It is almost, if not quite always, effected by an instrument known as a bottomry bond. The word Bottomry is founded upon an ancient usage still in some force, which considers the bottom or keel of the ship as the ship. (r)

(n) Ex parte Matthews, 2 Ves. Sen. 272; Atkinson v. Mating, 2 T. R. 462; Portland Bank v.Stubbs, 6 Mass. 425; Tucker v. Buffington, 15 Mass. 480; Badlam v. Tucker, 1 Pick. 389; The Sch. Romp, Olcott, Adm. 196.

(o) Miln v. Spinola, 4 Hill, 177; Tucker v. Bufflngton, 15 Mass. 477; Dean v. M'Ghie, 4 Bing. 48; Champlin v. Butler, 18 Johns. 169.

(oo) The Troubadour, Law Rep. 1 Adm. & Ecc 302.

(p) Myers v. Willis, 17 C. B. 77, 33 Eng. L. & Eq. 204, affirmed in Exchequer Chamber, 18 C B. 8S6, 36 Eng. L. & Eq. 850; Hackwood v. Lyall, 17 C.B. 124, 33 Eng. L. ft Eq. 211; Howard v. Odell, 1 Allen, 85; Blanchard v. Fearing, 4 Allen, 118; M'lntyre v. Scott, 8 Johns. 159; Window v. Tarbox, 18 Maine, 182; Cutler v. Thurlo, 20 Maine, 213.

(q) See Fish v. Thomas, 5 Gray, 45.

(qq) Macy v. Wheeler, 30 N. Y. 230.

Originally, the contract was made and the bond executed chiefly, perhaps only, by the master in a foreign port, to raise funds to enable the ship to return to her home port. And while it has been repeatedly asserted that admiralty has complete * jurisdiction of every bottomry bond, wherever made or however made, we are not entirely certain that this is true of any other bonds than those made as they originally were made. (s) It is, however, true that common-law courts do not usually take cognizance of bottomry bonds, nor is it easy to see how they could enforce their peculiar provisions. And, therefore, as a matter of necessity, admiralty might take jurisdiction over all bottomry bonds. They are certainly and eminently maritime contracts. A bottomry bond transfers the ship to the bottomry creditor, as a security for advances made by him. In this respect it is similar to a mortgage or a pledge. It differs from a pledge, however, in this: that possession is not transferred to the creditor. A change of possession is of the essence of a pledge, (t) and this possession seldom if ever is given to the creditor in a case of bottomry. (u)

But a contract of bottomry differs wholly from a mortgage or a pledge, in one particular, wherein it differs also from all other contracts of security. That particular is this. All contracts for security are void if, or so far as, the debt or loan which they are intended to secure is illegal and therefore void. Nearly all civilized nations have what are called usury laws; that is, they place a limit to the amount which can legally be promised for the use of money, or the forbearance of a debt. Now, bottomry bonds are valid, although they go far beyond these limits. They may indeed

(r) The Atlas, 2 Hagg. Adm. 53 ; Scarborough v. Lyras, Latch, 252, Noy, 95.

(s) The jurisdiction where a bond is made by the owner in a home port, has been doubted or denied in Blaine v. The Charles Carter, 4 Cranch, 328; Forbes v. Brig. Hannah, Hopk. 99, Bee, 348; Knight v. The Attilla, Crabbe, 326; Hurry v. Ship John & Alice, 1 Wash. C. C. 298; Hurry v. Hurry, 2 Wash. C. C. 145. The jurisdiction has been sustained in Wilmer v. The Smilax, 2 Pet. Adm. 295, n.; The

Sloop Mary, 1 Paine, C. C. 671; The Brig Draco, 2 Sumner, 157.

(t) Ryall v. Rolle, I Atk. 165; Reeves v. Capper, 5 Bing. N. C 136; Homes v. Crane, 2 Pick. 607; Brownell v. Hawkins,

4 Barb. 491.

(u) There is no jus in re in such a case, but merely a jus ad rem, a right to the thing hypothecated, which can be enforced for the payment of the debt. The Tobago, provide for the payment of any amount of interest which the parties choose to agree upon. (v)

5 Rob. Adm. 222; The Young Mechanic, 2 Curtis C. C. 404.

The interest payable by a bottomry bond is called by the lawmerchant maritime interest. The reason of the rule and of the name is this: that the bond always provides, that if the ship be lost before the bond becomes payable, no part of the debt, whether principal or interest, is payable. Or, as it is often said, the debt is paid and the bond discharged by the loss of the ship. (w) It is obvious, therefore, that the interest payable on a bottomry bond is composed of two elements. One is the amount to be paid for the use of the money; the other is a compensation to the lender for the risk of the loss of the ship, which risk he assumes. These two elements are distinct, but are never discriminated in a bottomry bond, which simply declares the amount of the whole interest.

It is absolutely essential to a bottomry bond, that the lender should assume this risk. At the same time, mortgages of other property, or any other securities, may be given to the lender to assure to him the payment of the bond when it becomes payable, including the maritime interest; provided that all these mortgages or securities are discharged, as the bond itself is, by the loss of the ship. (x)

A practice has grown up in modern times, by which bottomry bonds are in some instances changed from their original purpose, and used as a means of lending and borrowing money upon illegal interest. It is done in this way. A party lends money at fifteen per cent, or any other amount, as maritime interest on the bottomry of a ship; he gives three per cent, or some other premium, for an insurance of the whole amount of the bottomry, principal and interest, the debt being an insurable interest; then if the ship comes home in safety his bond is paid, and if it is lost his insurance is paid. Bonds and bargains of this description are usually made in a home port. (y) In its theory the bottomry bond is a means of raising money to save the ship, and send her home with the cargo; and it creates a lien on the ship, which admiralty enforces in preference to all other liens, because it is considered as saving the ship for the benefit of the * other liens. (z) The only certain exception to this rule * 28ft is that of sailors' liens for their wages, for these take precedence of all liens. (a) There is some authority for another exception, in favor of the lien of material men, for supplies or repairs indispensable to the safety of the ship. (b) For a similar reason, if there be many successive bonds, a later bond takes precedence of an earlier bond, because the later bond saves the ship for the earlier; (c) thus reversing the rule applied to mortgages. It may be added, that bottomry bonds are always construed very liberally. (d) If, indeed, a master borrows money abroad for the necessities of the ship, and the money is so applied, although no instrument of bottomry is given, the law-merchant gives to the lender a lien on the ship therefor, and his remedy against the owner as debtor. But he can then recover only his legal interest. (e)