Charles Edward Pollock Frederic Philip Maude.

Compendium of the law of merchant shipping online

. (page 8 of 101)
Online LibraryCharles Edward Pollock Frederic Philip MaudeCompendium of the law of merchant shipping → online text (page 8 of 101)
Font size
QR-code for this ebook

expenses, to be paid to the person entitled under such trans-
mission, or otherwise as the Court may direct- Such Court
may also make or refuse an order for sale, and annex thereto
any terms or conditions, and require any evidence in support of
the application it may think fit, and generally may act in the
premises as the justice of the case requires.

By sect 63, every such order for a sale must contain a decla-
ration vesting the right to transfer the ship or share so to be
sold in some person or persons named by the Court, and such
nominee or nominees are thereupon entitled to transfer the ship
or share in the same manner, and to the same extent, as if he
or they were the registered owner or owners. The registrar
must obey the requisition of the nominee, in respect of any
transfer, to the same extent as he would be compellable to obey
the requisition of a registered owner.

By sect. 64, an application for sale, as above, must be made
within four weeks after the occurrence of the event on which
the transmission has taken place, or within such further time as
the Court allows; such time must not, however, in any case
exceed the space of one year from the date of the occurrence.
In the event of no such application being made within this
period, or of the Court refusing to accede to it, the ship becomes

(A) See this rule, ante, p. 7.


Digitized by



forfeited, as in the case of unqualified owners using a British flag
and assuming the British character (i).

By sect. 65 of the Merchant Shipping Act, 1854, the Courts
already mentioned may, without prejudice to their other powers,
upon the summary application of any interested person made by
petition or otherwise, and either ex parte or upon service of
notice, as the Court may direct, issue an order, prohibiting for
a time named in the order any dealing with a ship or share.
The Court may also make or refuse the order, and annex thereto
any terms or conditions, and discharge the order when granted
with or without costs, and generally may act as the justice of
the case requires ; and every registrar must upon being served
with such order, or an official copy thereof, obey the same
without being made a party to the proceedings.

Certificates of Before the Merchant Shipping Act, 1854, difficulties arose
• when an owner was desirous of selling or mortgaging a ship at

any place out of the country or possession in which the port of
registry was situated. This act contains provisions to facilitate
such sales and mortgages, by enabling the registrars to grant
certificates conferring powers of sale or mortgage.

The following are the provisions of this act with reference to
sales of this description. By sect. 76, any registered owner who
is desirous of disposing by way of sale of a ship in respect of
which he is registered at any place out of the country or posses-
sion in which the port of registry is situated, may apply to the
registrar for a certificate of sale.

By sect. 77, the owner must state to the registrar the follow-
ing particulars, which are to be entered in the register book : —
(1.) The names of the persons by whom the power mentioned in
the certificate is to be exercised, and the minimum price at which
the sale is to be made, if it is intended to fix any minimvm; (2 )
The specific place or places where the power is to be exercised ;
and (3.) The limit of time within which it is to be exercised.
If no place is specified, the power may, subject to some pro-
visions to be presently mentioned, be exercised anywhere.

Sect. 78 provides, that no certificate of sale shall be granted
to authorize any sale at a place within the United Kingdom,
if the port of registry is situated within it; or at any place
within any British possession in which the port of registry is

(0 See of this, ante^ p. 17.

Digitized by



sitaated. Nor can any certificate be granted to authorize a
sale by a person not named in the certificate.

By sect. 79, the certificates must be in the form given by the
statute (A) ; they must not only mention the particulars required
to be entered in tbe registry book, but must also enumerate any
registered mortgages, or certificates of mortgage or sale affecting
the ship.

By sect 81, it is provided, that the following rules shall be
observed with respect to certificates of sale : —
(1.) No such certificate can be granted except for the sale of

an entire ship.
(2.) The power must be exercised in conformity with the

directions contained in the certificate.
(3.) No sale bond fide made to a purchaser for valuable con-
sideration can be impeached by reason of the person by
whom the power was given dying before the making of
the sale.
(4.) Whenever the certificate contains a specification of the
place at which, and a limit of time not exceeding twelve
months within which, the power is to be exercised, no
sale bona fide made to a purchaser for valuable conside-
ration without notice can be impeached by reason of the
bankruptcy or insolvency of the person by whom the
power was given.
(5.) Any transfer made to a person qualified to be the owner
of British ships must be by bill of sale in the form
already mentioned, or as near thereto as circumstances
(6.) If the ship is sold to a person qualified to hold British
ships, she must be registered anew ; but notice of all
mortgages enumerated on the certificate of sale must be
entered in the register book.
(7.) Previously to such registry, the bill of sale by which the
ship is transferred, the certificate of sale, and the cer-
tificate of registry, must be produced to the registrar.
(8.) The r^strar must retain the certificates of sale and
registry, and after having indorsed on both of them an
entry of the fact of a sale having taken place, must for-
ward them to the registrar of the port appearing on the
certificates to be the former port of registry of the ship,
{k) See po8i, Appendix, p. ccxviii.

Digitized by



and the last-mentioned registrar must make a memo-
randum of the sale in his register book, and the registry
of the ship in this book is then to be considered as closed,
except so far as relates to any unsatisfied mortgages, or
existing certificates of mortgage entered in it.
(9.) The description of the ship contained in her original cer-
tificate of registry may be transferred to the new register
book without her being re-surveyed, and the declaration
to be made by the purchaser is the same as that which is
required from an ordinary transferee.
(10.) If the ship is sold to a person not qualified to be the
owner of a British ship, the bill of sale by which the ship
is transferred, the certificate of sale and the certificate
of registry must be produced to some registrar or con-
sular officer, who must retain the certificates, and, having
indorsed on them the fact of the ship having been so sold,
must forward them to the registrar of the port appearing
on the certificate of registry to be the port of registry of
the ship ; and the last-mentioned registrar must make
a memorandum of the sale in his register book, and the
registry of the ship in this book is then to be considered
as closed, except so far as relates to any unsatisfied mort-
gages or existing certificates of mortgage entered in it.
(11.) If default is made in the production of the certificates
mentioned in the last rule, the unqualified purchaser is to
be considered by British law as having acquired no title
to or interest in the ship; and the person upon whose
application such certificate was granted, and the persons
exercising the power, are each liable to a penalty not
exceeding 100/.
Under the same section, and sects. 82 and 83, it is provided,
that certificates, if not used, must be given up to be cancelled ;
the Commissioners of Customs may, in cases in which the cer-
tificates are lost or obliterated, direct the issuing of new certifi-
cates ; and the owners may, in certain cases, by an instrument
in a form provided by the act (/), authorize the registrars to give
notice that the certificate is revoked.

Sale by agent. Sales of vessels are frequently conducted, in the absence of
the owner, by brokers (m) or agents. Their authority, even if

(/) See postt Appendix, p. ccxxiv. ployed in the procurincr of passengers

(m) Ship brokers are persons em- and freight for ships. With respect to

Digitized by



it is given by a power of attorney, is, according to the ordinary
rale, revoked by the death of the owner (»).

In ordinary cases of sale, if the ship is in port, she should, in Bankruptcy of
order to convey an indefeasible title, be actually delivered to ara^nst vendor.
the purchaser, since, if she is allowed to remain in the posses-
sion of the vendor, she would pass to his assignees, should he
become a bankrupt, as being in his order and disposition (o), or
should an execution issue upon a judgment against him, the
sale might possibly be held void under the 13 Eliz. c. 5(p).
We shall see, however, that mortgages which are duly registered
are not affected by the bankruptcy of the mortgagor, although
the ship may at the time be in his order and disposition (j).

Questions of considerable nicety often arise as to the time When pro-
when the property in vessels which are building vests in the P^rty passes.
person for whom they are being built. The determination of
this point must depend upon the intention of the parties, as evi-
denced by the particular terms of the contract under which the
vessel is built. In the ordinary case of a contract to build a
ship, the subject-matter of the contract not being in existence,
the vendee acquires no property in it until it is finished, and
actually or constructively delivered (r). But where, by the
terms of the contract, a superintendent is employed by the
vendee to overlook the building, and the price is to be paid by
instalments, which are regulated by particular stages in the pro-
gress of the work, so that the vendee may be said to appropriate
the different portions of the ship as they are from time to time
completed, the property in those portions vests in the purchaser
as soon as each instalment is paid (s). The mere fact of the

tlieir remuneration, see Hill v. Kitching, Atkinson v. Maling^ 2 T. R. 462.

3 C. B. 299. By an order of the Com- (p) Per Abbott, C. J., and Bayley,
miasioners o( Customs, their officers are J., in Robinson v. M^ Donnelly 2 B. & A.
not allowed to act as brokers. A ship 134.

broker or a)^nt is not within the acts for (9) See 12 & 13 Vict, c 106, s. 225;

the regulation of brokers in the city of M. 8. Act, 1854, s. 72, and post^ p. 34.
London. Gibbons v. Rule, 4 Bing. 301. (r) Mucklow v. Mangles, 1 Taunt. 318.

(n) Watson v. King, 1 Stark. 121 ; See an instance of a constructive deli-

4 Camp. 272. very, Carruthers v. Payne, 5 Bing. 270.
(o) Stephens v. SoU, 1 Ves. 352. Where {s) Woods v. Russell, 5 B & A. 942 ;

at the time of the sale the ship is at sea, Clarke v. Spence, 4 A. & £. 448. As to

immediate delivery being impossible, it what amounts to an appropriation, see

is sufficient if the bill of sale is delivered Goss v. Quintun, 3 M. & G. 825 ; Wilkins

to the purchaser, provided that he takes t. Bromhead, 6 M. & G. 963. Wood t.

possession of the ship upon her arrival Bell, 5 E. & B. 772; S. C, in error, 6 £.

in port. Brown v.Heathcote, 1 Atk. 160; & B. 355, and the cases cited above.
Ex parte MaUhews, 2 Vei. sen. 272 ;

Digitized by




ship being one-third built at the time of the making of the con-
tract has been held not to have this eflPect (0. In all these cases
the question is one of fact rather than of law ; namely, what was
the intention of the parties, as evidenced by their contract and
the surrounding circumstances (t^). In two recent decisions a
distinction was drawn, based upon the facts of the cases and
nature of the contracts, between the ship herself, and materials
which, although selected and prepared, had never been actually
attached to her; it was held, that the latter did not vest in the
vendee, although the former did(x).

Warranty on

The simple bargain and sale of a ship does not imply any
contract that she is seaworthy, or in a serviceable condition. A
conveyance of a ship, whilst at sea, was therefore held to be
satisfied, although, at the time of the sale, she had been so much
injured as to be totally lost within the meaning of a policy of
insurance (y). Where, however, a person agrees to build or
complete a vessel for a purchaser, she must, in order that the
contract may be complied with, be reasonably fit for the service
for which she was ordered, and for which, in the contemplation
of both parties, she was intended {z).

Wliat passes
on sale.

Where there are any special terms or warranties in the con-
tract of sale, the rights of the parties must depend upon the cir-
cumstances of each particular case (a). So on the sale of a ship.

(0 Laidler y.Burlinson, 2 M. & W. 602.

(tt) See Reid v. Fairbanks, 18 C. B.
692, and the jud(;^ment of the Court in
Wood V. Bell, 5 E. & B. 772.

(*) Baker v. Gray, 17 C. B. 462;
Wood V. Bell, 6 E. & B. 355.

(y) Barr v. Gibson, 3 M. & W. 390.

(«) Shepherd v. Pybus, 3 M. & G. 868.
These are only instances of the general
rule, that on the sale of an existing
chattel of a particular description, the
terms of the contract are satisfied if it is
of that description, as there is, in this
case, no implied warranty as to its qua-
lity, condition or fitness for any parti-
cular purpose. Parkinson Y. Lee, 2 East,
314; Budd v. Fairmaner, 8 Bing. 48;
Chanter ▼. Hopkins, 4 M. & W. 399; but
that where an article is ordered for a
particular purpose, and made by or un-
der the directions of the vendor, the
contiract is not complied with unless it
will answer such purpose. Broum v.
Edgington, 2 M. & G. 279. See also

Gray v. Cox, 4 B. ft C. 108; OUivanty,
Bayley, 5 Q. B. 288 ; Parson y. Sejtton,
4 C. B. 899. There is another class of
cases in which the contract is not silent,
but the difficulty is to ascertain whether
the terms used amount to a warranty,
or only to a mere description. See
Budd V. Fairmaner, ubi sup,

(a) Where a ship was sold **mth alt
fauttsy" Lord Kenyon held that the
vendor was still bound to disclose la-
tent defects known to him. Mellish v.
Motteux, Peake, 115. In Baglehole v.
Walters f 3 Camp. 154, Lord Ellen-
borough dissented from that decision,
holding that in the absence of fraud,
the vendor was protected by the stipu-
lation. This case was recognized and
acted on in Pickering v. Dowson, 4
Taunt 779. But even these words will
not protect a vendor if there is a special
description of the vessel in the terms
of sale, which would confine their mean-
ing to all faults which a ship amwering

Digitized by




what passes to the vendee, in addition to the vessel itself, will
depend upon the tenns of the particular contract (J). If it is
intended to include boats, they should be mentioned, since it has
been said that by the words '^ tackle, furniture, apparel, and all
other her instruments thereunto belonging," they are not trans-
ferred (c). Nor is ballast part of the furniture of a ship(d);
and it has been held, that under the words " stores, tackle, ap-
parel, &c.," kintlage does not pass(c). But under an assign-
ment of" all the appendages and appurtenances" of a ship, her
chronometer is included (/). A transfer of a share of a ship
passes the corresponding share in the freight imder an existing
charter-party, without the mention of the word freight, for the
right to freight is incidental to the ownership of the vessel which
earns it (g).

We will next consider title by mortgage. Before the Re- Mortgage.
gistry Acts, vessels might be mortgaged in the same manner as
other chattels; these acts have, however, from time to time,
made further conditions necessary to the existence of a complete
title by mortgage (A).

thai deMcription may hare. Shepherd v.
ICaia, 5 B. & A. 240. In Taylor v. BuUen,
5 Ex. 779, however, a ship having been
advertized as A I, teak- built, was sold
by a contract, stating that she was to
be bought and sold agreeably to an in-
ventory annexed, which also described
her as a teak-built ship, but concluded
** the vessel, &c to be taken with all
Ciulu as they now lie, without any al-
lowance for deficiency, &c., or any de*
fitit or errqr whatever,** The ship turn-
ing out to be neither A 1, nor teak-
built, it was held that there was no
warranty. The words " with all faults'*
will not avail to protect the vendor, if
means are taken ^audulently to conceal
the defects, or a fraudulent description
k given at the time of the sale. Schnei-
der V. Heath, 3 Camp. 505. Where ne-
gotiations occur between parties re-
specting the sale of a ship, the vendor
is only bound by representations con-
tained in the ultimate contracts See
per Chambre, J., in Pickering v. Dowson,
4 TaunL 7S6 ; Kain v. Old, 2 B. & C.
627 ; Freeman v. Baker, 6 B. & Ad. 797.
It is otherwise, however, in the case of a
fraudulent misrepresentation (that is to
say, a representation false to the know-
ledge of the party making it), by which
the vendee ia induced to enter into the

contract. Wright v. Crookes, 2 S. N. R.
685; Moem v. Heyworih, 10 M. & W.
147 ; Taylor v. Ashton, 1 1 M. & W. 401 ;
Ormrod v. Hulh, 14 M. «£ W. 661 ; Thorn
v. Bigland, 8 Exch. 725.

{b) The decisions as to what is co-
vered by policies of insurance have some
bearing on this question ; see poet, Chap.

(c) MoUoy, B 2, c. 1, 8. 8.

{d) lb,! Kynter*i Case, 1 Leon. 46.

(«) Lano v,Neale, 2 Stark. 105.

(/ ) Langton v. Norton, 1 1 L. J., N. S.,
Chanc. 299. In Woods v. Russell, 5 B.
& A. 942, a rudder made and cordage
bought by a ship-builder, specifically
for a ship, were held to pass with the
sliip to the vendee as against the assig-
nees of the builder who had become
bankrupt ; see also Goss v. Quinton, 3 M.
& G. 825 ; Wood v. Bell, 5 E. & B. 772,
and post, p. 53, note (u).

ig) Lindsay v. Gibbs, 22 Beav. 522.
See as to the liabilities which attach to
the vendee. The Nymph, 1 Swab. Adm.
Rep. 86. As to the eflTect of imperfect
registration on a mortgage, see Dickin-
son V. Kitchen, 8 E. & B. 789 ; and as to
the mortgage of an unfinished ship and
its subsequent registration, see Bell v.
Bank of London, 3 H. & N. 730.

(A) Under Lord Liverpool's Act, 26

Digitized by




The Registry Act, which was in force at the time of the pass-
ing of the Merchant Shipping Act, 1854, namely, the 8 & 9 Vict,
c. 89, provided for the transfer by way of mortgage, as well as
for the sale of ships (i) ; and it was held under this act that,
unless its provisions In these respects were complied with, there
could be no equitable title to a vessel (A).

of Merchant
Shipping Act
on mortgage.

The Merchant Shipping Act, 1854, contains, however, dif-
ferent provisions on this head, and for the first time prescribes a
form of mortgage, which does not purport actually to transfer
the ship. This statute excludes from the register all notice
of trusts, express, implied or constructive, and declares that,
subject to any rights and powers appearing by the register book
to be vested in any other person, the registered owner shall have
power absolutely to dispose of the ship under the provisions of

Geo. 3, c. 60, it was long a question
whether an owner could mortgage a
ship, retaining in himself the equity of
redemption, or whether a compliance
with the forms of that act did not ne-
cessarily transfer the whole interest.
Since the passing of the later Registry
Acts, beginning with 6 Geo. 4, c. 110,
the decisions upon this question have
become mere matter of history. The
following summary of them is given by
Mr. Chancellor Kent :— " The language,
in many of the cases, as that of Lord
Eldon, who scattered ambiguas voces to
that effect in Curtis v. Perry ^ 6 Vesey,
739, Campbell v. Stein, 6 Dow. P. C.
116, Ex parte Yallop, 15 Ves. 60, Ex
parte Houghton, 17 Ves. 251, Dixon v.
Ewart, 3 Mer. 333, was in favour of the
conclusion that there could be no equit-
able ownership of a ship, distinct from
the legal title, and that upon a transfer
under the forms of the llegi8t:y Acts,
the ship becomes the absolute property
of the intended mortgagee, and that the
terms and the policy of the Registry
Acts were incompatible with the exist-
ence of any equity of redemption. But
these opinions, or dicta, have been met
by a series of adjudications, which as-
sume the law to be otherwise, and that
the Registry Acts related only to trans-
actions between vendor and vendee, and
to cases of real ownership ; and that an
equitable interest in a ship might exist
by operation of law, and by the contract
of the parties, distinct IVom the legal
estate : and that notwithstanding the
positive and absolute terms of the in-
dorsement upon the certificate of re-

gister, a mortgage of a ship is good and
valid according to the law as it existed
before the Registry Acts, provided the
requisites of the statutes be complied
with. Mair v. Gletmie, 4 M. & S. 240 ;
Robinson v. Macdonnell, 5 lb. 228 ; Hay
Y. Fair bairn, 2 B. & A. 193; Monkhouse
V. Hay, 2 B. & B. 1 14. The opinion of
Sir Thomas Plumer in Thompson v.
Smith, 1 Madd. Ch. Rep. 395, contained
a very clear and masterly vindication of
the validity of the mortgage of a ship
consistently with the preservation of the
forms of the Registry Acts,'* 3 Kent
Comm. 147. Under the M. S. Act, 1854,
it is expressly provided, that registered
mortgagees are, notwithstanding notice,
to rank according to the priority of the
registration of their securities. See sect.

(i) See8& 9 Vict. 0.89,8.45. Under
this statute, the same form of transfer
might be used in the case of a mortgage
as in that of a sale, a statement being
added to the entry in the book of regis-
try, and also to the indorsement on the
certificate of registry, that the transfer
was made only by way of mortgage.

(Ar) See Davenport v. Whit more, 2 Myl.
& C. 177 ; Lang ton v. Horton, 5 Beav.
9 ; Follett v. Delaney, 2 De G. & S. 235.
In Hughes v. Morris, 2 De G., Mac. 8c
Gor. 349, the Court of Appeal in Chan-
cery approved of these decisions, and
declined to enforce the specific perform-
ance of a contract for sale of shares in
a ship, although it did not afiect to
transfer the shares, but was only execu-
tory. And see Duncan v. Tindal, 13
C. B. 258.

Digitized by




the act(/). Subject, however, to these provisions, there is
Dothing in the statute to prevent an equitable title to a ship from
being acquired smd dealt with as in the case of other chattels.

The statutory provisions now in force with respect to mort-
gages are as follows : —

The Merchant Shipping Act, 1854, enacts, by sect. 66, that
a registered ship or share may be made a security for a loan or
other valuable consideration. The instrument creating such
security, which is termed in the act a " mortgage," must be in a
form prescribed by the act (m), or as near thereto as circum-
stances permit ; and on its production the registrar of the port
at which the ship is registered must record it in the register

By sect, 67, every mortgage must be recorded by the regis-
trar in the order of time in which it is produced to him for that
purpose ; and he must, by memorandum under his hand, notify
on the instrument of mortgage that it has been recorded by him,
stating the date and hour of such record.

By sect 68, whenever any registered mortgage has been dis-
chaiged, the registrar must, on the production of the mortgage
deed, with a receipt for the mortgaged money indorsed thereon,
duly signed and attested, make an entry in the register book to
the effect that the mortgage has been discharged. Upon this
entry being made, the estate, if any, which passed to the mort-
gagee vests in the same person or persons in whom the same
would, having r^ard to intervening acts and circumstances,
have vested if no such mortgage had ever been made.

By sect 69, if there is more than one mortgage registered of Priority of

Online LibraryCharles Edward Pollock Frederic Philip MaudeCompendium of the law of merchant shipping → online text (page 8 of 101)