1. Definitions.—
A vessel mortgage is a conveyance of the ship as security. A bottomry bond is a contract in the nature of a mortgage by which the ship is pledged as security for the repayment of money borrowed and the lender assumes the risk of loss if the ship does not survive in consideration of maritime interest, usually at a high rate. Respondentia is a loan on the cargo, to be repaid if the goods arrive, but, if lost, the borrower is exonerated. Like bottomry, it is essentially a loan without personal liability beyond the value of the property mortgaged. Vessel bonds are a modern form of security in the form of debentures of the owner, carrying interest coupons and secured by a trust deed or mortgage of the ship.