[A registered ship, or any share therein, may be made a security for a loan or other valuable consideration; but the mortgagee must register the instrument, in the form marked I. in the Act, at the Port at which the ship is registered(Section 66, Merchant Shipping Act, 1854); and the registered Owner of any ship or share therein shall have power absolutely to dispose of such ship or share, and to give effectual receipts for any money paid or advanced by way of consideration.-(Section 43.) Shares in ships registered under the foregoing Clause shall be deemed to be included in the word "Stock," as defined by the Trustee Act, 1830, and the provisions of such last-mentioned Act shall be applicable to such shares accordingly.-(Section 10, Merchant Shipping Act, 1855.) Equities may be enforced against Owners and Mortgagees of ships in respect of their interest therein, in the same manner as equities may be enforced against them in respect of any other personal property.-(Section 3, Merchant Shipping Act, 1862.) A registered ship or share therein, when disposed of to persons qualified to be Owners of British ships, shall be transferred by Bill of Sale. -(Section 55, Merchant Shipping Act, 1854.) Any registered Owner, if desirous of disposing by way of mortgage or sale of the ship or share in respect of which he is registered at any place out of the country, or possession in which the ship is registered, may apply to the Registrar for a certiticate of sale or mortgage.-(Section 76, Act 1854.) The Mortgagee of shares in a ship could not, therefore, sell the vessel, but only his interest therein, whether at home or abroad. He could only dispose of his shares or "stock" in the same way that a Mortgagee might sell the shares in a railway or any other Joint Stock Company. The Mortgagee, however, might apply to the Court of Admiralty, under Section 11 of 24th Vic., cap. 10, as the holder of a moiety of interest in the ship, and the Court would make such order as it deemed fit.] MORTGAGE AND SALE OF SHIP. SIR, A had 34-64 shares of a vessel which was mortgaged to B. The vessel sailed some time since with a cargo from the East Coast of England for Ireland, and on her way she put into a Port of the West of England through stress of weather, and received damage. When at the Port of shelter B stopped her, and sold A's 34-64 shares to a disadvantage with C's 30-64 shares. 1st. Is B justified in selling a vessel with her cargo in at a disadvantage to A? 2nd. With selling A's 34-64 with C's 30-64 shares in one lot, with the consent of C, to A's disadvantage, C buying all? 3rd. The ship having no money in hand, who are the right parties to pay the victuals, wages, &c. ?—Yours, &c., Plymouth, Nov. 6, 1876. CONSTANT READER. [1st. If the vessel was unduly sacrificed the Mortgagor might apply to the Court of Admiralty under Section 11 of the 24th Vic., c. 10. 2nd. The whole of the shares of the vessel having been mortgaged, it follows that when the Mortgagee entered into possession he owned the entire ship, ard, therefore, had the power of selling her. A Co-Owner is at liberty to bid at the sale, and may become the purchaser. 3rd. The Co-Owners are liable for all debts incurred previous to the Mortgagee taking possession. If wages are not paid, the Mortgagee is placed in the position of the Mortgagor in regard of suits for wages under the Merchant Shipping Act, 1854.-(The Caledonia, Admiralty Court, Dec. 20, 1855.) Seamen have a lien on the ship for wages.] MORTGAGE. MORTGAGE. MORTGAGED SHARES. SIR,-I am Managing Owner of a ship. Twelve months go the ship received heavy and costly repairs. I paid all accounts and made a call upon the shareholders. One shareholder mortgaged his shares, and was not in a position to pay the call. 1st. Are the remaining shareholders responsible to me for his proportion? 2nd. Have I any claim upon the Mortgagee for loss since the date of the mortgage? The vessel is now lost. 3rd. Have I now any claim upon the holder of said mortgage for his proportion of Crew's wages? 4th. Also his proportion of the disbursements that ship owes me?-Yours, &c., SUBSCRIBER. London, Jan. 19, 1877. [1st. The shareholders are severally and jointly liable to the Manager. 2nd. A Mortgagee not being deemed, by reason of his mortgage, the Owner of the ship or share until he is in possession, would be liable only for the wages and expenses from the time he became the registered Co-Owner.(See Section 70, Merchant Shipping Act, 1854.) 3rd. Our Correspondent would have a claim on the Mortgagee for Crew's wages if he has gone into possession, but not otherwise, and only from the time of possession. 4th. The two last replies relate to this also.] MORTGAGEE AND SHIPBUILDER. SIR,-A short time since I had a vessel placed at my yard for repairs, she having been stopped by the Board of Trade. A short time after having commenced the repairs, the Owner became bankrupt, and I found then that the vessel was mortgaged. The Mortgagee came and looked at the vessel and agreed with me I was to complete the repairs, and when finished to sell her; and if any loss occurred, it was to be equally divided between us, according to the value of his mortgage and to the amount of my bill. The Mortgagee now declines, and says he will not be responsible for any rent or cost of repairs, past, present, or future. What am I to do in the matter, as the vessel is in my way and is an injury to my business? I may state I have all her stores in my lofts, rent incurring every day, and the vessel is in my possession. The Owner of the vessel is offering 18. in the pound.Yours, &c., A SHIPBUILDER. March 23, 1877. [Our Correspondent has a lien on the ship for the repairs done by him, and he should give notice to the Mortgagee and also to the Trustees of the bankrupt, that the vessel will be sold by public auction to pay the expenses incurred.] MORTGAGE AND DEBTS. SIR, A bought a certain share (say one-fourth) of a ship from B, the Mortgagees. As purchasers from them, are they responsible for debts contracted previous to the Mortgagees having entered into possession, or are they only liable for their share of expenses from and after that date? A short period had elapsed between the date of B's having taken possession and that of the transfer to A by bill of sale, which will, perhaps, explain the wording of the latter, viz., "free of incumbrance created by us." It may have occurred that B had left an open question as to A's liabilities with regard to the previous incumbrance. INQUIRER. Oct. 8, 1877. [The Mortgagee B having entered into possession would be liable for all debts contracted from that time, and the purchaser A, who bought the share from B, having been guaranteed free from the liability to pay any incumbrances contracted during the time that B held the share, would only be responsible for debts incurred from the time he entered into proprietorship. The Co-Owner who mortgaged the share would be personally liable for his proportion of expenses up to the time of parting with the same.] MORTGAGE AND FISHING VESSEL'S GEAR. SIR, A fishing smack was mortgaged in the usual way. The assumed Owner fell into difliculties, and a Sheriff's execution was issued, under which the officer seized all the trawling gear, and disposed of it by public auction. Is he justified in doing this? The Mortgagee claims the right of all property on board the vessel under his mortgage. A case of this kind has recently occurred. The solicitor who caused the execution to be issued insists upon it that the trawling gear is not considered appurtenances of the vessel. Lowestoft, April 6, 1876. MORTGAGEE. [The words used in the Parliamentary form of Mortgage (Schedule I.) are as follows:-"In the ship above particularly described, and in her boats, guns, ammunition, smail arms, and appurtenances." We are of opinion that the trawling gear of a fishing smack is an adjunct or appendage to the vessel, and is included in the Mortgage, or in the bill of sale.] MORTGAGE OF FISHING VESSEL. SIR, A fishing vessel is not registered, but licensed. Can the Owner mortgage her? If so, how and where is it to be recorded? How will the Mortgagee stand in the event of the Owner becoming bankrupt? A. B. Ramsey, Isle of Man, March 14, 1876. [If the vessel is over 15 tons she must be registered, and the only mortgage on Shipping recognised by law is the mortgage provided for under the Merchant Shipping Act, 1854. This is the only mortgage on a ship or shares therein which can be recorded.-(See Letter, page 159, Maritime Notes and Queries, Vol. II.)] MORTGAGE AND LOAD-LINES. SIR,--1st. Under Section 76 of the Merchant Shipping Act, 1854, the Mortgagee has the power of sale of the ship in shares. Can the Mortgagee, after having duly made a demand for the payment of the mortgage, advertise and sell the ship by public auction; and, if so, is the mortgage fully satisfied for the amount thereof, notwithstanding that at the sale the amount realised is much less than the mortgage claim? 2nd. Does the Mortgagee incur any personal or other liability after the sale, and how is the transaction accounted for on the Registry Book of Shipping at the Ship's MORTGAGE. Port of Registry? 3rd. Do the provisions of the Merchant [1st. If a bill was given as collateral security, and the vessel has been mortgaged for the debt, and the amount due under the loan has not been received, the lender would have a claim on the debtor for the balance of the amount advanced. 2nd. A Mortgagee would be at liberty to sell the vessel if the mortgage was in default; but he might be called upon to prove that the sale was an advantageous one, and that the property was not sacrificed. Without permission of a Court a Mortgagee cannot sell to himself, but must have the vessel registered in another name.- -(Section 71, Merchant Shipping Act, 1854.) 3rd. The buyer in a British possession abroad would have to apply to the Registrar-General of Shipping in London. 3rd. Section 11 of the Act of 1875 applies to every British ship."] 66 MORTGAGEES AND SHIP'S REPAIRS. SIR, I am the Ship's Husband and Manager of a vessel owned by myself and others. One of the Owners mortgaged his share to a bank, and afterwards became bankrupt, and the bankers gave me notice of their being the Mortgagees. The vessel has recently met with damages and been repaired, and on applying to the bankers to pay their proportion of cost of repairs they refuse, saying that they as Mortgagees are not liable. Are they legally liable, or who must I look to? If the Mortgagees are not liable, can they compel me to pay them future profits?-Yours, &c., Swansea, March 10, 1877. SHIPOWNER. [If the Mortgagees have gone into possession, and if the repairs have been executed subsequently, they would be in the same position as the Mortgagor was formerly, and, therefore, liable for his share of the repairs. Where the Managing Owner has mortgaged his interest, and the Mortgagee caused the transfer to be duly endorsed on the Certificate of Registry, but the Mortgagor continued, as formerly, to manage the affairs of the ship, and the Mortgagee did not nterfere or take possession, it was held that he was not liable for repairs and necessaries supplied to the orders of the Mortgagor.-("Briggs v. Wilkinson," Shipping and Mercanile Gazette. See also pages 12 and 158, Maritime Notes and Queries, Vol. II.)] MORTGAGE. the Policy of Insurance was assigned in the manner provided by the 31st and 32nd Vic., cap. 86, the Mortgagee alone would have power to sue under that instrument, and he is bound to exhaust that security before proceeding personally against the borrower.-(See also "Insurance and Mortgage," page 217, Maritime Notes and Queries, Vol. I.)] MORTGAGEES AND WAGES. SIR,-Some little time since a Merchant and Shipowner got into pecuniary difficulties. A friend of his, a banker, was compelled to assist him, and advanced some considerable sums of money, for which mortgages were given on various ships. On the return of these vessels to their re-pective Ports all wages, both Master's and Seamen's, for the completed voyage were paid by the Mortgagee; but subsequently one of the Masters of the ships made a heavy claim for arrears of wages. Have these arrears of wages a preferential claim to the mortgage, admitting them to be fairly due, or do they merely come in as all other ordinary or common debts? Yours, &c., A SHIPOWNER. Jersey, Oct. 23, 1876. [The Mortgagee would not be personally liable for debts and wages contracted previous to his taking possession of the vessel, and the Shipowner would therefore have to pay the same. If, however, the Owner is insolvent, or there are no solvent Part-Owners to sue, and he or they cannot pay the wages, the vessel could be arrested for the wages of the Master and Crew, but not for other debts. Where a sum of 501. had been paid on account of wages, after possession had been taken of the ship, it was held that this might be set off by the Mortgagee without opening, as against them, the general account between the Master and the Owners.-(The Caledonia, Admiralty Court, Dec. 20, 1855.)] FIRST AND SECOND MORTGAGEES. SIR,-A vessel is mortgaged to A and B. A's claim is paid by a third party, who takes A's mortgage, but on receiving the actual amount due to him from a fourth party, and is not requested at the time to release the first mortgage, B complains that it is his duty to release the same, that he (B) may become the first Mortgagee. The amount of A's claim is not the full value of the vessel, and B being anxious to realise, has he the power to sell; if not, what is his actual position in the case? INTERESTED. Lowestoft, March 20, 1876. [B is the second Mortgagee, and if the mortgage is in default he might sell the ship subject to the first mortgage. As the first mortgage has not, however, been discharged, the first Mortgagee might attach the vessel or the proceeds if the ship was put up for auction, if not sold by order of the Court. A second Mortgagee cannot dispose of the vessel without the concurrence of the prior Mortgagee, except under the order of the Court.-(Section 71, Merchant Shipping Act, 1854.)] SALE OF MORTGAGED SHIP. SIR,-I hold a second mortgage on a ship for 300%, and another gentleman, who held one mortgage for 7501., has sold the vessel privately for 9007., unknown to me and the proper Owner. Is such a sale legal or not without advertising? [If the ship has been privately sold, and for a price much below her marketable value, a clear case might be made out for the interference of the High Court of Admiralty, and that Court would have power to deal with the whole subject. (See pages 158 and 159, Maritime Notes and Queries, Vol. II.) When a Mortgagee enters into possession of the mortgaged property, with a view to a sale, he is bound to act with the same care and prudence, and to make the same efforts, which a prudent proprietor would make in order to have the sale conducted to the greatest advantage.-(" Marriott v. the Anchor Reversionary Company (Limited)," Chancery Court, Nov. 20, 21, and 22, 1860.)] [The Owner of mortgaged shares in a vessel could only sell his shares subject to the mortgage, and if the mortgage has been duly registered, a title could not be given to the purchaser; therefore the power of attorney would be of no effect. A Mortgagee is not deemed to be the Owner, and the Mortgagor of a ship or a share therein is divested of ownership only "in so far as may be necessary for making such ship or share available as a security for the mortgage debt." -(Section 70, Merchant Shipping Act, 1854.)] CHARTERER AND MORTGAGEE. SIR, A chartered his steamer with B to make as many consecutive voyages as she could during a certain period. The steamer entered upon the Charter, but before the period agreed for has been completed, A informs B that his steamer has been seized and sold by the Mortgagees, and, consequently, he is unable to fulfil the Charter. Can B compel the steamer to be returned to complete her Charter; and if not, what is his remedy, and against whom, for the damages which he is likely to sustain by such a breach of contract? -Yours, &c., SUBSCRIBERS. Sept. 16, 1876. [No notice of any trust, express, implied, or constructive, can be entered in the register book.-(Section 43, Merchant Shipping Act, 1854.) A Charter could not oust the rights of a Mortgagee. No registered mortgage of any ship shall be affected by any act of bankruptcy committed by the Mortgagor, after the date of the record of such mortgage, notwithstanding such Mortgagor, at the time of his becoming bankrupt, may have in his possession and disposition, and be reputed Owner of, such ship or share thereof; and such mortgage shall be preferred to any right, claim, or interest in such ship which may belong to the Assignees of such bankrupt (Section 72), and the registered Mortgagee has absolute power of sale (Section 71). If the Owner is not bankrupt, he may be sued for breach of Charter. So long as the Mortgagee does not take possession of the ship, the Mortgagor, as registered Owner, retains all the rights and privileges of ownership, and all contracts made by him not impairing the rights of the mortgagee are valid.-("Collins v. Lamport," Chancery Court, Dec. 9, 1864.) Though a Mortgagee takes possession there may be an equity of redemption; and if the vessel is not sold, he should employ the ship as a prudent Shipowner should do.-(See page 159, Maritime Notes and Queries, Vol. II.) When a Mortgagee receives sufficient to satisfy principal and interest and costs, he is a trustee for the balance, and is in the same position as any other trustee.("Jones v. the Marine Credit Company," Chancery Court, Jan. 12, 1867.) It might be a question of prudence, if the vessel is not sold, whether a lucrative charter should not be fulfilled. But there seems to be no doubt that the Mortgagee in possession is not bound by the previous engagements of the ship.-("European and Australian Steampacket Company v. the Royal Mail Steampacket Company,” Shipping and Mercantile Gazette, July 24, 1858.)] BILLS OF EXCHANGE AND MORTGAGEE. SIR,-A had a vessel which was sold to B, who took four bills of exchange, namely-at three, six, nine, and twelve months-payable in London, and covered by mortgage to A, duly registered at the customs at the Port where the vessel was registered. The first bill was duly met, the second bill was dishonoured, and renewed for another six months. The third and fourth bills were also dishonoured at maturity. In the interim B became bankrupt, and offered 1s. 6d. in the pound. The solicitor of B applied to A to prove his claim, and A declined to put in his mortgage. The vessel on her arrival at a British Port was stopped by the Board of Trade and declared unseaworthy by the Surveyor, but, by permission of the same, B was allowed to remove the vessel to another Port, to dock, where she now lies, partly repaired. Has A, the Mortgagee, power to arrest the vessel by an Admiralty writ for payment of the amount of his mortgage, prior to any other claims ?-Yours, &c., FERDINAND SCORZA. Penzance, April 26, 1877. [The 3rd and 4th bills having been dishonoured, the mortgage was in default, and, therefore, the Mortgagee could arrest the ship by an Admiralty writ, and his claim would take precedence of all other creditors of the bankrupt's estate.] ADVANCE ON RIVER CRAFT. SIR.-I am about to accept some lighters and craft as security for money to be advanced, and have agreed to adopt such value of craft in proportion to the amount lent and interest as is customary in the Port of London. What is the usual proportion between security and sum lent, and also the interest generally charged under such circumstances? It is, I believe, 10 per cent. for a ship, and should, I think, be about the same, if not more, on lighters. SECURITY. London, April 6, 1876. [There is no rule in the Port of London as to the interest chargeable on moneys advanced to Owners of river craft. It varies from 6 to 10 per cent. It is a question of the sufficiency of the security and the respectability of the borrower and the condition of the vessels. They would be liable to depreciation, collision, fire, stranding, and damage; and although some of the risks might be covered by insurance, all could not possibly be provided for. Three-fourths of the estimated value would, we should say, be a maximum proportion under the most favourable circumstances.] MORTGAGE. SAILING BY SHARES AND FREIGHT. SIR,-I am the Captain of a vessel, and arrived here from Runcorn with salt. I am sailing the ship by shares. My Owner has become bankrupt since my sailing from Runcorn, and the ship is mortgaged. On my arrival the Mortgagee seized the ship. I have discharged about two-thirds of the cargo, and, being refused payment of freight, have stopped the discharge of the remainder. Am I right in stopping the discharge of the cargo; and what steps can I take to recover my proportion of the freight? My arrangement with the Owner is that I am to receive two-thirds of the freight to remunerate myself and to pay all disbursements, viz., Port charges, wages, provisions, &c., but not including repairs and insurance. SHIPMASTER. Newcastle, March 14, 1876. [The vessel was leased to our Correspondent on certain conditions, and he, consequently, became Owner pro hac vice, and, when in possession as Charterer, the Mortgagee seized the vessel and demanded the freight. So long as an Owner is in possession of his ship he may sail her and make contracts. Mortgagees have only the same rights, and are subject to the same liabilities in respect of freight, as the Part-Owners from whom they have taken their mortgage.-("Green v. Briggs," V. Ch. C., April 12, 1848.) If the contract was good and binding between the Owner of the vessel and Master, the latter, as Charterer of the ship, would be entitled to receive the freight, but the Mortgagee would have to be treated as the Owner, and, as such, entitled to his share. Stopping the discharge of cargo should never be resorted to. We would advise, under the peculiar circumstances, delivery under protest.] REPAIRS AND CO-OWNERSHIP. SIR,-A friend of mine is Managing Owner of a British vessel which has arrived in the United Kingdom leaky, and requires to go into dock for repairs. One of the Owners died lately in a state of insolvency with a mortgage on his shares. The Mortgagee declines to contribute to the necessary repairs, and intimates that he will sell as soon as the necessary repairs at the Managing Owner's expense have been effected. What can be done in this case to compel the Mortgagee to pay his proportion for repairs ?-Yours, &c., INQUIRER. April 20, 1877. [If the Mortgagee has exercised rights of ownership of his shares, he would be liable for all expenses incurred from the time he constituted himself a Co-Owner. By Section 72 of the Merchant Shipping Act, 1854, any act of a bankrupt, after the date of the record of the mortgage, does not affect any rights, claim, or interest of a Mortgagee in the ship, or any share thereof which may belong to the Assignees of the bankrupt. When a Mortgagee of shares wishes to sell he must apply to the Registrar of Shipping for a transfer and the endorsement of the Register. All changes in Ownership must be endorsed on the certificate.-(Section 45.) If a CoOwner objects to repairs, he might be fixed with his share of expenses by a suit in Admiralty.-(Our Correspondent is advised to peruse a series of letters in Maritime Notes and Queries, Vols. I., II., and III., on Co-Ownership and Mortgagees.)] DECEASED CO-OWNER INSOLVENT. SIR, A Ship's Husband died insolvent. He owned 32-64ths in a ship, which vessel at the time of his death owed, for repairs and outfit, 800, the one-half of which sum I, as remaining Owner, paid him prior to his death and hold his receipts. What is my position as regards the said debts? His 52-6-4ths being mortgaged to a banker, who is liable to pay the 8007.? Has the banker any claim on the ship beyond the 32-64ths, and can he compel nie to sell my part on the ship's return to England? Who is the proper person to act as Ship's Husband ?-Yours, &c., SUBSCRIBER. Newport, Oct. 23, 1876. MORTGAGE. [The deceased Co-Owner mortgaged his shares. The Mortgagee is not liable to our Correspondent for the repayment of the 8001. The Mortgagee has no claim on the ship beyond that given to him by the shares. He cannot compel the Owner of one-half the shares to sell the same without an order from a Court. Where a ship is held in equal shares by two Part-Owners there can be no majority; but the Mortgagee might consent to our Correspondent acting as Ship's Husband. If there are any assets the estate of the deceased Ship's Husband would be liable, and our Correspondent would rank with other creditors.] FISHERMEN'S WAGES. SIR, A fishing smack arrived from sea, the Captain being the registered Owner. The vessel was mortgaged, and the Mortgagee stopped the ship and sold her by auction, and sold the fish also, and kept the money. The Captain is destitute and cannot pay us. Who are we to sue for our weekly wages-the ship, the Mortgagee, or the Captain who is insolvent? At the time of stoppage the vessel was duly insured and all interest paid.-Yours, &c., THE CREW. Grimsby, Feb. 19, 1877. [The Mortgagee is not personally liable for wages incurred previous to going into possession, and, therefore, the only person to sue is the Master.] SALE OF SHIP.-BRITISH SUBJECT. SIR,-1st. In the matter alluded to in your impression of June 30 there was no note or other collateral security, but simply a mortgage deed executed for a stated sum against or upon the ship. Supposing the sale took place at public auction, and the ship realised at such sale only one-half of the mortgage debt, would the Mortgagee have any other legal or equitable claim or personal right of action against the Mortgagor for the balance of the amount of mortgage, or would not the debt, ipso facto-that is, by the sale-be entirely extinguished? 2nd. Can a Joint-Owner residing out of the ship's Port of registry appoint his Co-Owner residing at the Port of registry as his attorney, by power of attorney (not certificate of sale), to dispose of his interest in the ship to such Joint-Owner; and would a bill of sale executed jointly by the attorney and Co-Owner be an effec tual and valid transfer of the ship or shares ? 3rd. What constitutes a British subject? Are the children of foreigners born in a British possession British subjects, or are they only natural born of their parents, who are foreigners?—Yours, &c., A DEMERARA SUBSCRIBER. Demerara, July 25, 1876. [1st. Mr. Justice Willes, in "Nelson v. Couch" (Common Pleas, June 24, 1863), said :-"If a creditor having a lien and power to sell were to do so, and only realised half his debt, could he not sue for the remainder? Surely he could. Looking at the cases of the Fortitudo and the John and Mary, referred to in the argument, it would be most extraordinary to hold that an action in personam was no bar to further proceedings, but that an action in rem. was." The Mortgagor would be personally liable for the balance of the debt left unpaid on the mortgage. 2nd. A Joint-Owner could authorise a person, by power of attorney duly executed, registered, and stamped, to dispose of his interest, but the attorney must give a receipt in the name of the actual Mortgagee, so as to discharge the mortgage on the register. The sale would then be valid. 3rd. All persons born within the dominions of the Crown, that is, either within the United Kingdom or the territories thereto belonging, fall within the definition of British subjects; and this extends to the children of aliens if their parents were not at the time in enmity with our Sovereign.] |