Bottomry
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A bottomry, or bottomage, is when the master of a ship borrows money upon the bottom or keel of it, so as to forfeit the ship itself to the creditor, if the money is not paid at the time appointed with interest at the ship's safe return.
This occurs in cases where the ship needs urgent repairs during the course of its voyage or some other emergency arises and it is not possible for the master to contact the owner to arrange funds, allowing him to borrow money on the security of the ship or the cargo by executing a bond. Where both cargo and ship are hypothecated, the bond is called a bottomry bond. Due to the bond's relatively low priority as against other liens in the event of a libel against the ship, the use of bottomry bonds declined greatly in the 19th century and the subject is today of interest only to legal historians.
The Code of Hammurabi describes a form of bottomry that was a type of insurance. A bottomry would be taken, but the repayment would be contingent on the ship successfully completing the voyage.
This article incorporates content from the 1728 Cyclopaedia, a publication in the public domain.
