.

LOANS ON BOTTOMRY AND

RESPONDENTIA

LOAN ON BOTTOMRY,
DEFINED

It is a contract in the nature of a

mortgage, by which the owner of
the ship borrows moneyfor the
use, equipment and repair of the
vessel for a definite term, and
pledges the ship as asecurity for
its repayment, with maritime or
extraordinary interest on account
of themaritime risks to be borne
by the lender, it being stipulated
that if the ship be lost in thecourse
of the specific voyage or during
the limited time, by any of the
perils enumerated inthe contract,
the lender shall also lose his
money.

LOAN ON RESPONDENTIA,
DEFINED

It is a contract made on the goods

laden on board the hsip, and
which are to be sold or
exchanged in the course of the
voyage, the borrowers personal
respo
nsibility being deemedthe
principal security for the
performance of the contract. The
lender must be paid hisprincipal
and interest, though the ship
perishes, provided that the goods
are saved.
CHARACTER OF LOAN, ART.
719

ARTICLE 719

A loan on bottomry or
respondentia shall be considered
that which the repayment of
thesum loaned and the premium
stipulated, under any condition
whatsoever, depends on thesafe
arrival in port of the goods on
which it is made, or of their value
in case of accident.

FORMS AND REQUISITES

ARTICLE 720

Loans on bottomry or
respondentia may be executed:

1. By means of a public
instrument.
2. By means of a bond signed by
the contracting parties and the
broker who took parttherein.3. By
means of a private instrument.

Under whichever of these forms

the contract is executed, it shall
be entered in the certificateof the
registry of the vessel and shall be
recorded in the commercial
registry, without whichrequisites
the credits originating from the
same shall not have, with regard
to other credits,the preference
which, according to their nature,
they should have, although the
obligationshall be valid between
the contracting parties.

The contracts made during a

voyage shall be governed by the
provisions of Articles 583
and611, and shall be effective
with regard to third persons from
the date of their execution, if they
should be recorded in the
commercial registry of the port of
registry of the vessel beforeeight
days have elapsed from the date
of her arrival. If said eight days
should elapse withoutthe record
having been made in the
commercial registry, the contracts
made during thevoyage of a
vessel shall not have any effect
with regard to third persons,
except from the dayand date of
their entry. In order that the bonds
of the contracts celebrated in
accordancewith No. 2 may have
legal force, they must conform to
the registry of the broker who
tookpart therein. In those
celebrated in accordance with No.
3 the acknowledgment of
thesignature must precede.
Contracts which are not reduced
to writing shall not be the basis
fora judicial action.
ARTICLE 721

In a bottomry or respondentia
bond there must be stated:

1. The kind, name, and registry of

the vessel.

2. The name, surname, and

domicile of the captain.
3. The names, surnames, and
domicile of the person giving and
of the person receiving theloan.

4. The amount of the loan and the

premium stipulated.

5. The time for repayment.

6. The goods pledged to secure

repayment.

7. The voyage for which the risk

is run.
ARTICLE 722

The bonds may be issued to order,

in which case they shall be
transferable by indorsement,and
the assignee shall acquire all the
rights and run all the risks
corresponding to theindorser.

AMOUNT

ARTICLE 723

Loans made be made in goods

and in merchandise, fixing their
value in order to determinethe
principal of the loan.

ARTICLE 726

If the lender should prove that he

loaned a larger amount than the
value of the article liablefor the
bottomry loan, by reason of
fraudulent measures employed by
the borrower the loanshall only be
valid for the amount at which said
object is appraised by experts.
The surplusprincipal shall be
returned with legal interest for the
whole period of the duration of
thedisbursement.

ARTICLE 727

If the full amount of the loan

contracted to load the vessel
should not be made use of for
thecargo, the surplus shall be
returned before clearing. The
same procedure shall be
observedwith regard to the goods
taken as a loan if they could not
all have been loaded.

ARTICLE 728
The loan which the captain takes
at the point of residence of the
owners of the vessel shallonly
affect that part of the latter which
belongs to the captain, if the other
owners or theiragents should not
have given their express
authorization thereto or should
not have takenpart in the
transaction. If one or more of the
owners should be requested to
furnish theamount necessary to
repair or provision the vessel, and
should not do so within twenty-
fourhours, the interest which the
parties in default may have in the
vessel shall be liable for theloan
in the proper proportion. Outside
of the residence of the owners the
captain maycontract loans in
accordance with the provisions of
Articles 583 and 611.

BY WHOM

ARTICLE 611

In order to comply with the

obligations mentioned in the
foregoing article, the captain,
whenhe has no funds and does not
expect to receive any from the
agent, shall procure the same
inthe successive order stated
below:

1. By requesting said funds of the

consignees or correspondents of a
vessel.

2. By applying to the consignees

of the cargo or to the persons
interested therein.