in point of form is in fact a security only (c). A mortgagee of Chap. 1. a ship, like the mortgagee of any other property, acquires an ownership in the ship viz., such ownership as the mortgagor has to give (d). owner. As to the mortgagee of a ship not being deemed the owner of it, Mortgagee except for certain purposes, see post, 50. The provision as to this was not deemed intended for the protection of the mortgagee. Whether the mortgagee of a ship was to be deemed in law the owner of it-entitled to the benefits, and liable to the burthens which belonged to that character-before he took possession, was formerly an important question, on which persons of eminent talents differed in opinion (e). A shipwright who has done necessary repairs to a ship on the order of a mortgagor in possession, has been held entitled to a lien for them on the ship as against the mortgagee (f). It has been held that a creditor of a registered owner cannot take in execution and sell a mortgaged ship (g). A first registered mortgagee is entitled to take possession of the May take ship (h). possession of ship. The mortgagor is entitled to the freight until the mortgagee takes When entitled possession or does that which is equivalent to it (i). A mortgagee to freight. taking possession of a ship before the voyage is ended, and finding goods on board which have been carried on the terms that freight is to be paid, is entitled to that freight (k). If the mortgagor be only a part-owner, the claim of the mortgagee for freight will be limited to the net freight, after deducting outfit and disbursements (1). As, however, it is provided that the mortgagee shall not be deemed the owner, nor the mortgagor to have ceased to be the owner, except so far as may be necessary to make the ship available for the payment of the debt secured, where a mortgagor, who was also the (c) Ward v. Beck, 32 L. J., C. P. 113; 13 C. B. (N. 8.) 668; The Cathcart, L. R. 1, Ad. 314. (d) Keith v. Burrows, 45 L. J., C. P. 876. As to the rights of a second mortgagee, see S. C., per cur. (e) Chinnery v. Blackburn, 1 Hen. Black. 117. See Kerswell v. Bishop, 2 Cromp. & Jerv. 529. Lord Mansfield said, "Till the mortgagee takes possession, the mortgagor is owner to all the world, and he is to reap the profits." And Mr. Justice BULLER said, "If the mortgagor be considered as agent, he must be so throughout, and then the mortgagee would be answerable for every loss, damage," &c. The learned judges by whom this case was decided were of opinion that a mortgagee who had not taken possession would not be liable for such repairs or other expenses as are not a charge upon the ship itself in specie. Jackson v. Vernon, 1 H. Bl. 114; Twentyman v. Hart, 1 Stark, 366; Briggs v. Wilkinson, 7 B. & Cres. 30; Rusden v. Pope, L. R. 3 Ex. 272, per MARTIN, B. (f) Williams v. Allsup, 10 C. B. (N. S.) (g) Kitchen v. Irvine, 28 L. J. Q. B. 46. per cur. (i) Gardner v. Cazenove, 26 L. J., Ex. 17; 1 H. & N. 423; Rusden v. Pope, L. R. 3, Ex. 269; 37 L. J. Ex. 137; Willis v. Palmer, 29 L. J. C. P. 194, where, upon the terms of an assignment, it was held that an immediate right to passage money passed. (k) Keith v. Burrows, 46 L. J. C. P. 452, 801; Tanner v. Phillips, 42 L. J. Ch. 125; Kerswell v. Bishop, 4 Bing. 45. He is so entitled in priority to mortgagees of the freight, Liverpool Marine Credit Company, v. Wilson, 41 L. J., Ch. 798; L. R. 7 Ch. 507; Brown v. Tanner, 37 L. J. Ch. 923; as to tacking incumbrances, see S. C.; Wilson v. Wilson, 41 L. J. Ch. 423. (1) Alexander v. Simms, 5 De G. M. & G. 57; and see Green v. Briggs, 6 Hare, 395. Part I. Authority of mortgagor. Mortgagee's power of sale. Accounts owner of a ship's cargo, had become bankrupt, and the mortgagee did not take possession until her voyage was completed, it was held that he had no right to detain the goods for the freight, as both freight and goods had vested in the assignees (a). A mortgagee, so long as he does not interfere or claim the possession, must be taken to have allowed the mortgagor to enter into all engagements for employment of the ship, usually entered into by a person who has the apparent control and ownership of a ship (6). A mortgagor in possession of a ship having entered into a beneficial charter-party, the mortgagees were restrained at the suit of the charterers from dealing with the ship in derogation of the charter-party (c). The legal title of a mortgagee of a ship who, for the purpose of facilitating a sale by the mortgagor, conceals his mortgage, cannot prevail in equity against a purchaser for valuable consideration without notice (d). As to a mortgagee's power of sale, see post, 50. When the mortgagee enters into the possession of the mortgaged property with a view to the sale of it, he is bound to act with the same care and prudence, and use every effort which a prudent proprietor would use to have the sale conducted under circumstances of the greatest advantage, and if he employs it, as it seems he may, for the purpose of an adventure, which turns out a losing affair, he, and not the mortgagor, must bear the result of the loss (e). In his accounts against a mortgagee, the master is entitled to security for the amount for which he is personally liable in respect of necessaries (f). It was formerly considered that the Court of Admiralty had no jurisdiction to take cognizance of the rights of mortgagees of ships arrested under its process, or sold by its authority; but the better opinion seems to be, that though a mortgagee could not institute a suit in that court, he might appear in a suit to protect his interests (g). By the 3 & 4 Vict. c. 65, s. 3, it is enacted, "That when any ship or vessel shall be under arrest by process issuing from the said High Court of Admiralty, or the proceeds of any ship or vessel, having been so arrested, shall have been brought into and be in the registry of the said court, in either such case the said court shall have full Branker v. Molyneux, 5 Jur. 773. Johnston v. Royal Mail Steam Packet Company, 37 L. J. Ch. 33; L. R. 3, C. P. 38; and see Brown v. North, 8 Ex. 1, where it was held that the mortgagee was only entitled to the freight (less than the current freight) specified in bills of lading signed by authority of the mortgagor, though signed after the mortgage, which was considered not to invalidate an arrangement made pursuant to previous authority from the mortgagor and before the mortgage could be known. Keith v. Burrows, 46 L. J. Q. B. 801; Rusden v. Pope, L. R. 3, Ex. 269. (c) Collins v. Lamport, 34 L. J. Ch. 196; see Cato v. Irving, 5 De G. & S. 210. (d) Hooper v. Gumm, 36 L. J. Ch. 605. (e) Marriott v. Anchor Reversionary Company, 30 L. J. (N. S.) Ch. 122; 2 Giff. 457; 3 De G. F. & J. 177. De Mattos v. Gibson, ib. 145. European, &c. Mail Com pany v. Royal Mail Steam Packet Company, 4 Kay & J. 676. (f) The Limerick, 45 L. J. Ad. 97. (g) Neptune, 3 Hagg. 132. The Percy, 3 Hagg. 402. The Dowthorpe, 2 Wm. Rob. 80. jurisdiction to take cognizance of all claims and causes of action of Chap. 1. any person, in respect of any mortgage of such ship or vessel, and to decide any suit instituted by any such person in respect of any such claims or causes of action respectively" (h). This jurisdiction has been extended to any claim in respect of any duly registered mortgage, whether the ship or her proceeds be under arrest of the court or not (i). 7. The Liability of Owners and Charterers of Ships further considered. [It often happens that the charterer of a ship causes it to be laden either wholly or in part with goods belonging to other persons; in such cases, it seems that the charterer is to be considered as the owner of the ship with respect to those persons. But as different decisions have taken place, it is proper to notice them here. In the case of Parish v. Crawford (k), an action was brought against the defendant, as owner of a ship, upon a promise alleged to have been made by him to the plaintiff to convey in his ship a quantity of moidores from London to Barbadoes, which had not been delivered there. The facts of the case were, that the defendant, the owner, had chartered the ship to one Fletcher for the voyage in question for a certain sum, and Fletcher was to have the freight of goods, but the freight of passengers was reserved to the defendant; and the defendant appointed the master, and covenanted with Fletcher for the condition of the ship and behaviour of the master. Fletcher took on board the moidores and other goods of the plaintiff and other persons, and received the freight for them. For the defendant it was objected, that although the ship was his property, yet he was not owner in such a manner as to be liable to this action, but that Fletcher was for this purpose the owner. Chief Justice LEE, however, before whom the cause was tried, was of opinion that the action might be maintained; and the plaintiff recovered damages to the value of the ship and freight (1). "The true consideration," said the Chief Justice, "is, Whether by anything done by Crawford, who is confessedly the owner of the vessel, in chartering it to Fletcher, he has discharged himself as owner? Crawford considers himself as the governor of the ship, and so covenants for the government of it during the voyage, and the ship was navigated by his master. Upon what foundation, then, is an owner chargeable but upon these two considerations-first, the benefit arising from the ship, which is the equitable motive; secondly, the having the direction of the persons who navigate it? And it is upon these two things taken together] (h) The Dowthorpe; and the Prince Regent, decided by Lord STOWELL, in 1822, cited in the former case. See the Fortitude, 2 Wm. Rob. 217. See Place v. Potts, 8 Exch. 704. (i) 24 Vict. c. 10, s. 11. (k) Shortly reported in 2 Stra. 1251. The account of the case here given is taken from a manuscript note much fuller than the report. See part IV., chs. 2, 4. (1) 12 Geo. 2, c. 15. A statute which limited the responsibility of the owners. Part I. [that the implied contract arises. Though Crawford has not that freight which the merchants pay for their goods, yet as he has the benefit of the freight in general, he has that equitable motive which makes him liable. With regard to Fletcher, what Crawford had done is only giving him a power to put goods on board; and it seems to me, the makers of the Act of Parliament could not have any notion of such an owner of the ship, for it speaks generally of owners of ships; but this Fletcher is not to he considered as owner of the ship in any light, but only as having a power to make use of it in this way. If this was to be considered in the nature of a mortgage, it would be delivering up the ship for such a time as the mortgage should be in force; therefore I think there is nothing appearing upon this evidence that discharges Crawford as the owner of the ship." The In the case of James v. Jones and others (a), an action was brought against the defendants, as owners of the ship Seaflower, for the loss of a quantity of raisins on a voyage from Faro to London. One Thomas, the master of the ship, had, in his own name as master, and in the absence of the owners, chartered the ship to Reed and Parkinson, on a voyage from Falmouth to Faro, and back to London; and Reed and Parkinson engaged by the charter-party to provide a full lading from Faro, and to pay a stipulated price per ton. goods in question were shipped at Faro, by the consent of the agent of Reed and Parkinson at that place, and Thomas, the master, signed a bill of lading, engaging to deliver them to the plaintiff, "he paying freight per charter-party." These facts appearing at the trial of the cause before Lord KENYON, he was of opinion, that Reed and Parkinson were, with respect to the plaintiff, the owners of the ship pro hâc vice; that the defendants, Jones and others, were not responsible to him, and consequently that the plaintiff could not maintain his action. The plaintiff and his counsel did not apply to the court for a further consideration of the subject; but the beforementioned case of Parish v. Crawford does not seem to have been adverted to on this occasion. In a more recent case, in which it appeared at the trial that a ship had been chartered by the defendants, who were the registered owners, to one De Beur, and was afterwards put up by him as a general ship, and that the plaintiff had shipped a quantity of oats which had been improperly sold by the master, and for which the action was brought, Lord ELLENBOROUGH held the defendants not answerable, and the plaintiff was nonsuited. The form of the bill of lading is not noticed in the report of this case, and therefore, I presume, it was not thought material at the trial (b). The gentlemen who were counsel for the plaintiff in this cause were certainly aware of the case of Parish v. Crawford, but they acquiesced in the decision.] (a) Guildhall Sitt. after Trin. Term, 39 Geo. 3. There is a short note of this case in Esp. Nisi Prius Cases, vol. 3, p. 27. (b) Mackenzie v. Rowe, 2 Campb. 482. [These two cases are inconsistent with the former, but they are conformable to the principle of judgments pronounced respectively by the Courts of Queen's Bench and Common Pleas on questions of insurance, wherein it was decided, first (c), that a deviation committed by the master, with the knowledge of the owner, and which, therefore, could not, according to the law of England, be an act of barratry with respect to him, was an act of barratry with respect to a third person who had hired the ship by a charter-party, and who was considered as owner for the particular voyage, with relation to the subject of that cause; secondly (d), that a wilful running of a ship ashore by the owner, with the privity of the master, was an act of barratry against the merchant, under whose sole control the entire vessel for a time was placed. They are conformable also to the principle of another decision. The registered owner of a ship let the vessel at a certain rent to the person who acted as master; this person ordered stores, which were supplied for the use of the ship, and for which an action was brought against the registered owner, but it was held that he was not answerable, because "during the existence of the lease" the master was not his servant, nor was the order given on his behalf (e). And probably the case of Parish v. Crawford is not to be considered as law; for although the absolute owner might in each of these cases be ultimately answerable to the charterer of the ship, yet there was no contract, either express or implied, between him and the proprietors of the goods (ƒ).] (c) Vallejo v. Wheeler, Cowp. 143. (d) Soares v. Thornton, 7 Taunt. 627. (e) Frazer v. Marsh, 2 Campb. 517; 13 East, 238, (f) Are these cases inconsistent with each other? The charter-parties in Mackenzie v. Rowe, and James v. Jones, are not set out in the reports of those cases. They, probably, like the charter party in Frazer v. Marsh, were such as to transfer the possession of the ship from the absolute owners to the charterers, so as to make the master and the crew the servants of the latter, and the contracts of the master the contracts of the charterers. This was plainly not the effect of the charter-party in Parish v. Crawford, for there the owner appointed the master, covenanted for his good behaviour, and reserved to himself the freight of passengers. From the report of that case, in 2 Strange, 1251, it also appears that bills of lading for the moidores were signed by the master. Those bills, it is submitted, were evidence of an express contract, between the shippers of the goods and Crawford, by whom the master was appointed and employed. If that be so, Parish v. Crawford does not appear to be inconsistent with principle or with other decided cases. It could hardly have been determined otherwise consistently with the doctrine of the civil law, Omnia facta magistri dabet præstare qui eum præposuit alioquin contrahentes decipe Exercitor autem eum dicimus ad quem According to this definition, Fletcher, in the case of Parish v. Crawford, was neither dominus nor exercitor navis. He might, to be sure, employ the master as his agent, to make contracts for his benefit with the shippers of goods, and be liable upon such contracts; but the question was whether parties dealing with the master of the ship as master, were not entitled to seek compensation for the loss of their goods from the person to whose servant, acting as such, they had been entrusted for safe carriage? "The question," says Lord TENTERDEN in the three first editions of this work, "appears to have been rather a matter of form than of substance, for it seems clear that the owners were in Chap. 1. |