Code Section Group

Harbors and Navigation Code - HNC

DIVISION 3. VESSELS [399 - 786]

  ( Division 3 enacted by Stats. 1937, Ch. 368. )

CHAPTER 2. Civil Actions and Liens [450 - 509]

  ( Heading of Chapter 2 amended by Stats. 1970, Ch. 1341. )

ARTICLE 1. Bottomry [450 - 462]
  ( Article 1 enacted by Stats. 1937, Ch. 368. )

450.
  

Bottomry is a contract by which a vessel or its freightage is hypothecated as security for a loan, which is to be repaid only if the vessel survives a particular risk, voyage, or period.

(Enacted by Stats. 1937, Ch. 368.)

451.
  

The owner of a vessel may hypothecate it or its freightage, upon bottomry, for any lawful purpose, and at any time and place.

(Enacted by Stats. 1937, Ch. 368.)

452.
  

The master of a vessel may hypothecate it upon bottomry only for the purpose of procuring repairs or supplies which are necessary for accomplishing the objects of the voyage, or for securing the safety of the vessel.

(Enacted by Stats. 1937, Ch. 368.)

453.
  

The master of a vessel can hypothecate it upon bottomry only when he can not otherwise relieve the necessities of the vessel, and is unable to reach adequate funds of the owner, or to obtain any funds upon the personal credit of the owner, and when previous communication with the owner is precluded by the urgent necessity of the case.

(Enacted by Stats. 1937, Ch. 368.)

454.
  

The master of a vessel may hypothecate freightage upon bottomry, under the same circumstances as those which authorize an hypothecation of the vessel by him.

(Enacted by Stats. 1937, Ch. 368.)

455.
  

Upon a contract of bottomry, the parties may lawfully stipulate for a rate of interest higher than that allowed by the law upon other contracts. But a competent court may reduce the rate stipulated when it appears unjustifiable and exorbitant.

(Enacted by Stats. 1937, Ch. 368.)

456.
  

A lender upon a contract of bottomry, made by the master of a vessel, as such, may enforce the contract, though the circumstances necessary to authorize the master to hypothecate the vessel did not in fact exist, if, after due diligence and inquiry, the lender had reasonable grounds to believe, and did in good faith believe, in the existence of such circumstances.

(Enacted by Stats. 1937, Ch. 368.)

457.
  

A stipulation in a contract of bottomry, imposing any liability for the loan independent of the maritime risks, is void.

(Enacted by Stats. 1937, Ch. 368.)

458.
  

If there is a total loss of the thing hypothecated, from a risk to which the loan was subject, the lender upon bottomry can recover nothing; if a partial loss, he can recover only to the extent of the net value to the owner of the part saved.

(Enacted by Stats. 1937, Ch. 368.)

459.
  

Unless it is otherwise expressly agreed, a bottomry loan becomes due immediately upon the termination of the risk, although a term of credit is specified in the contract.

(Enacted by Stats. 1937, Ch. 368.)

460.
  

A bottomry lien is independent of possession, and is lost by omission to enforce it within a reasonable time.

(Enacted by Stats. 1937, Ch. 368.)

461.
  

A bottomry lien, if created out of a real or apparent necessity, in good faith, is preferred to every other lien or claim upon the same thing, excepting only a lien for seamen’s wages, a subsequent lien of material-men for supplies or repairs indispensable to the safety of the vessel, and a subsequent lien for salvage.

(Enacted by Stats. 1937, Ch. 368.)

462.
  

Of two or more bottomry liens on the same subject, the latter in date has preference, if created out of necessity.

(Enacted by Stats. 1937, Ch. 368.)

HNCHarbors and Navigation Code - HNC1