If the ship be abroad, by the statute of Massachusetts the record is not necessary, if the mortgagee takes possession as soon as possible after her return to that State; and this would seem to be almost an inference of law, even without express provision. For if the ship be where possession cannot be taken, and possession is taken as soon as that is possible, it would hardly seem to come within the meaning or within the reason of a mortgage without possession. Hence we should say that this principle would apply to a mortgage of goods at sea; for, in general, all the principles which apply to the sale of the ship at sea, apply to the sale of her cargo. The question whether the sale of a vessel was fraudulent as against creditors, it has been held cannot be raised by third persons who have no interest in the question.*

SECTION III.

OF THE SALE OF A SHIP BY THE BUILDER.

The builder of a ship is its first owner. It is true, that a party might contract with a builder to perform all the labor upon materials which that party would supply, and then the ship would belong to him for whom it is built, from the beginning, and would never be the builder's. But this is never done in practice. The ship-builder constructs the vessel either upon an order, or a contract for building or sale, or to sell it to any purchaser who may offer, or to own it himself. But it is possible that the contract for building and sale may be such as to make the ship become the property of the future owner, by instalments, paid in the course of the building. The cases are not quite clear on this subject; there is in

purchaser or attaching creditor, must prove that the latter had actual notice or knowledge of such deed." See Calais Steamboat Co. v. Scudder, 2 Black, 372. 1 Rev. Stats. 1836, ch. 74, § 6 ; Gen. Stats. 1860, ch. 151, § 2.

This question of possession will be more fully considered in a subsequent section.

'Gardner v. Howland, 2 Pick. 599, 602; Pratt v. Parkman, 24 Pick. 42; Gallop v. Newman, 7 Pick. 282; D'Wolf 2. Harris, 4 Mason, 515; Conard v. Atlantic Ins. Co. 1 Pet. 389, 449.

The Sch. Lion, 1 Sprague, 40.

them some reference to provisions in the English statutes as to builder's certificates, etc., which do not exist in our own; but on general principles we should say, that, where the owner is to pay for her by instalments, if the instalments are merely on time, without reference to the state of forwardness of the ship, the property remains in the builder until the ship is finished and delivered; and if she be lost or destroyed in the mean time, it is the builder's loss, and he is still bound to build, finish, and deliver a ship at the appointed time. But if the instalments, although on time, are graduated, expressly or impliedly, upon the condition of the ship, and are intended to pay the builder for work and labor and materials to the time of payment, and to purchase the fabric as it then existed, each payment is in full for a purchase of the ship at the time it is made, and has the effect of passing the property absolutely to the vendee, subject only to the lien of the builder for the purpose of finishing the ship.

It will be seen in the note below, that the cases on this subject are quite irreconcilable. We think, however, the law must be this: A may sell his lumber, out of which a ship is to be made, to B, and B may buy it, whenever they please, and wherever the lumber may be. And if, from all the facts, it is plain that it was the intention of the parties that one should sell and the other buy the fabric before it was completed, there is nothing in the law to prohibit or avoid the bargain. But such a bargain is not proved by the mere fact of instalments, however graduated, nor by the employment by the payer of a superintendent (on which fact great stress is laid in some of the cases), although these facts may go far towards identifying the structure, and sustaining an action for a breach of the contract in not finishing or not selling that very ship; and they may have an important bearing on the amount of damages. But they may, nevertheless, be insufficient to prove an actual sale and transfer of the property.1 The effect of the decis

1 The general principle, that a sale cannot be executory, and that there can be no sale of a thing not in existence at the time, but merely a contract to sell, which passes no property in the object itself until it is finished and delivered, but gives a mere personal right of action, applies to a ship as to any other chattel, although payment be made in advance. Mucklow v. Mangles, 1 Taunt. 318.

In Woods v. Russell, 5 B. & Ald. 942, the circumstances of the case were somewhat peculiar. "This ship," said Abbott, C. J., in delivering the opinion of the court, "is built upon a special contract, and it is part of the terms of the contract

ions seems to be, that the time when the property passes in a vessel on a contract for building, is a question of intent, to be gathered from that given portions of the price shall be paid according to the progress of the work; part when the keel is laid, part when they are at the light plank. The payment of these instalments appears to us to appropriate specifically to the defendant the very ship so in progress, and to vest in the defendant a property in that ship, and that, as between him and the builder, he is entitled to insist upon the completion of that very ship, and that the builder is not entitled to require him to accept any other." Although the case itself was decided on a different ground, namely, that the builder having signed his certificate to enable the purchaser to have the ship registered in his own name, the property vested in the latter from the time of the registry, the authority of this dictum was recognized in Battersby v. Gale, cited 4 A. & E. 458, and in Atkinson v. Bell, 8 B. & C. 277, 282, by Bayley, J., who in alluding to Woods v. Russell, said: "As by the contract given portions of the price were to be paid according to the progress of the work, by the payment of those portions of the price, the ship was irrevocably appropriated to the person paying the money. That was a purchase of the specific articles of which the ship was made." And also, though with considerable doubt and hesitation, in Clarke v. Spence, 4 A. & E. 448, where the court seem to have rested their acquiescence in the doctrine of Abbott, C. J., more upon the ground of precedent and expediency than principle. The case itself was similar to Woods v. Russell, with the omission of the registration, and the additional fact that an agent was employed by the purchaser to superintend the building and approve the materials employed. Whence "it follows," said Williams, J., “that, as soon as any materials have been approved by the superintendent, and used in the progress of the work, the fabric consisting of such materials is appropriated to the purchaser, otherwise the superintendent might be called upon, when one vessel had been nearly constructed, to begin his work de novo, and superintend the building of a second; and, in this point of view, the appointment of a superintendent by the contract appears to be of considerable importance."

In Moody v. Brown, 34 Maine, 107, there is a dictum, which admits that where payment is to be made by instalments the property will pass. In New York, however, a different rule of law is laid down, and it is there held that in such a case the property will not pass until the vessel is completed and delivered. Merritt v. Johnson, 7 Johns. 473. See also Johnson v. Hunt, 11 Wend. 135. It was so held also in a case where, in addition to the price being paid by instalments, a person was appointed by the vendee to superintend the work, though the court admitted that in such a case the builder would be bound to deliver the identical vessel. Andrews v. Durant, 1 Kern. 35. See, to the same effect, Haney v. Schooner Rosabelle, 20 Wisc. 247. In Scotland, the law as it is in England was settled by a very early case. Smith v. Duncanson, decided in 1786, Bell on Sales (1844), p. 17. Bu twhere payment is to be made in a specific manner, without reference to the progress of the work, the property will not pass. Laidler v. Burlinson, 2 M. & W. 602. In the late case of Wood v. Bell, 5 Ellis & B. 772, 34 Eng. L. & Eq. 178, the vessel was to be paid for by instalments, the first four on certain days named, and unconditionally; with no express reference

all the circumstances of the case. Although a contract to build a ship is inoperative to pass the property therein, yet a conveyance of the keel after it has been laid vests the property in that in the vendee, and draws after it all subsequent additions, according to the maxim of the civil law, "proprietas navis, carinæ causam sequitur." "1 An agreement to pledge a vessel then building to cover certain advances, and that the pledgee may purchase her at a certain rate, is to the stage in her building to which she might be advanced on the arrival of those days, and it was not apparent that the sums specified for each payment were to be commensurate with her probable progress on the days named. The next three instalments were also made payable on days certain; but the first two of these payments were made to depend on her having been carried on to certain specific stages in her building on those days respectively. The payment of the third depended on her being, on the day named, built according to contract. The next circumstance was, that the vessel was to be built under the direction of a person appointed by the future purchaser. It also appeared in evidence that the builder, at the instance of the plaintiff, punched his name on the keel, for the express purpose of securing the vessel to the plaintiff, and, although he refused after this to execute a formal assignment to the plaintiff, yet at the same time he admitted her to be the plaintiff's property. It was held that whether the property passed, was to be shown by the intention of the parties, as gathered from all the circumstances of the case. In regard to the payment by instalments, no decided opinion was expressed. As to the appointment of a person to superintend the work, the following language is used: "It certainly could not be contemplated that he was to superintend the building of more than one vessel under this contract, or that he was to superintend the building of any vessel which Joyce could, at his pleasure, transfer to another person. Still, it must be admitted, that this is by no means conclusive as to the question of property; it may be that it would have been a breach of contract not to deliver the specific vessel to the plaintiff as soon as she was completed, and yet the property, until she was completed, might have remained in Joyce." But it was held, that, however ambiguous these circumstances might be, still the punching of the name, and the declaration of the builder, were conclusive to show that it was the intention of the parties that the vessel should pass to the plaintiff. Affirmed in the Exchequer Chamber, 6 Ellis & B. 355, 36 Eng. L. & Eq. 148. In Baker v. Gray, 17 C. B. 462, 34 Eng. L. & Eq. 387, payments were to be made by instalments from time to time, and it was stipulated that if the vessel was not finished within a certain time the vendee might enter and take possession of her, and that the property in her should be deemed, from the payment of the first instalment, to be in the vendee. It may, therefore, be considered as doubtful whether the mere fact of payment being made by instalments, although commensurate with the progress of the vessel, is of itself proof that the parties intended the property to pass, and a contract similar to the one in Baker v. Gray has at least simplicity and safety to recommend it.

1 Glover v. Austin, 6 Pick. 209. See also Sumner v. Hamlet, 12 Pick. 76, 82.

neither a sale nor a mortgage nor pledge, and transfers no property in the vessel, although the advances are made.1 Where the property does pass before the completion of the ship, the builder has a common-law lien, or right of possession to finish her and earn the full price.2

The builder transfers the ship to the first purchaser by the original bill of sale, which is called in England the grand bill of sale, to distinguish it from the bills of sale made on subsequent transfers of the ship. But, as we have already remarked, this distinction does not exist, or not for any practical purpose, in this country.3

The builder should deliver to the first owner his certificate, that the owner may give it to the collector, as required by the statute of registration.*

in

1

Bonsey v. Amee, 8 Pick. 236. But in Reid v. Fairbanks, 13 C. B. 692, 24 Eng. L. & Eq. 220, where, under an agreement to build a ship, the defendant, to secure the plaintiffs, as well for the advances they had previously made to him as for those which they should be called upon to make to complete the vessel, made them a bill of sale thereof, which stated that he transferred to them a certain ship progress of building (describing it), and also six hundred tons of timber to finish the vessel, "to have and to hold the said ship or vessel, etc., to the said J. Reid, when the said ship or vessel shall be complete and finished, in as full, ample, and perfect a manner as if the said ship or vessel were ready for sea, and ready to be delivered to the said J. Reid at the time of executing these presents," it was held by the court that the property passed to the plaintiffs by the bill of sale, and that the habendum had not the effect of postponing the vesting thereof to the time when the ship should be completed. Jervis, C. J. said: "There is no doubt the whole question is one of construction of contract. There may be cases in which such a contract would have the effect of transferring the property only at a future period, or it may have the effect of transferring the property at once; but it seems to me that here it was intended to pass the property at once, because the object of the instrument was to give the plaintiffs security for advances. It has been contended that it is no security, but merely a contract between the parties; but it professes to be a security, and it cannot be so unless it operate as a present sale, and it does not signify what happens afterwards. It is, therefore, unimportant to consider the effect of the registration of the vessel. I think it very likely that if there had been no bill of sale there would still have been enough to bind the property in the ship. But it is unnecessary to consider that part of the case."

2 Woods v. Russell, supra.

See ante, p. 60, note 2.

Act of 1792, c. 1, § 8, 1 U. S. Stats. at Large, 291. As to the effect of the transfer of the builder's certificate to the purchaser under the English Registry Acts, see Woods v. Russell, 5 B. & Ald. 942.