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CASE. A part owner of a vessel let to the East India Company for a voyage to India, arrested the ship after it had been repaired and fitted out for the voyage, by process out of the Admiralty Court, and forced the other part owner to give security for his share. The vessel afterwards sailed to India and back in safety. Held, that the part owner who had taken the security was not entitled to any share of the profits of the voyage, though he was liable for a proportionate part of the cost of the repairs executed before the arrest (g).

(9) Daris v. Johnson, 4 Sim. 539.

CHAPTER III.

SALES AND MORTGAGES OF SHIPS.

$ 10. THERE are three modes in which ships can be acquired, Three modes viz., by construction, by purchase, or by capture and of acquiring condemnation. In the first case, the date when the property passes is generally fixed by the express terms of the contract, or by the conduct of the parties subsequently to the contract. Thus, though the property in a chattel ordered to be made as a general rule passes to the purchaser only when it is finished, yet where a ship is to be paid for by instalments according as each part is finished, the property in each part on being finished and paid for, will vest in the purchaser (a).

In the case of the acquisition of a ship by purchase, the purchase can either be by private contract or by public auction. The ordinary rules of the law of sale will apply, and the purchaser will be bound by his contract in the absence of fraud, or of a breach of warranty; the purchaser will become entitled to the freight, if any, being earned, but he will have to pay the costs of earning it and the premiums of any insurance on the ship (6). On the sale of a ship no warranty of seaworthiness will No warranty

of seaworthi. be implied. Therefore a sale of a ship, while at sea, will ness on sale. be good, though she be at the date of the sale aground and abandoned, or otherwise a total loss within the meaning of a policy of marine insurance (c).

(a) Woods v. Russell, 5 B. & Ald. 8 Price, 542, as to freight passing 942; Wood v. Bell, 6 E. & B. 355 ; under a marine policy. “ Case" at end of this g.

(c) Barr v. Gibson, 3 M. & W. (6) Morrison v. Parsons, 2 Taunt. 390 ; Schloss v. Heriot, 14 C. B., 407. See Thompson v. Rowcroft, N. S. 59. 4 East, 34 ; and Daridson v. Case,

see

Bills of sale and registration necessary.

CASE. A ship was to be built and completed in April, 1819. She was to be paid for by four instalments: the st, when the keel was laid; the second, when at the light plank; and the remaining two on her being launched. On the 26th June the ship was registered in the purchaser's name, and the third instalment paid, the builder having the day before signed the usual certificate of her building. The builder four days subsequently became bankrupt, the ship not being then completed or launched. Held, as against the assignees in bankruptcy, that the property in the ship was vested in the purchaser at the date of the bankruptcy, but that he must pay them the difference, if any, between the cost of completing the ship and the amount of the fourth instalment(d).

$ 11. In addition to the contract of purchase, a bill of sale and registration are necessary to pass the property to the purchaser. For a registered ship, or any share in it, can only be transferred by a bill of sale under seal, drawn up in the form prescribed by the Merchant Shipping Act, 1854 (e); otherwise a registrar cannot be required to record it, without the express directions of the Commissioners of Customs (f). A contract for the sale of a ship though not in the prescribed form will, however, be good and valid as between the vendor and vendee (9).

The original conveyance of the ship by the constructor to the purchaser is termed the grand bill of sale.

The bill of sale must be attested by at least one witness, and registered by the registrar of the port at which the ship is registered (h). A mere agreement in writing to transfer a ship does not require to be registered (i).

If there are several bills of sale relating to the same vessel, or to the same shares in it, they must be registered in the order of their production to the registrar of the port (1). The effect of not registering a bill of sale will

(d) Woods v. Russell, 5 B. & Ald. & C. 918; 33 L. J., Ex. 170. 942.

(h) 17 & 18 Vict. c. 104, s. 57. (e) 17 & 18 Vict. c. 104, s. 55. (i) Batthyany v. Bouch, 50 L. J., (f) 18 & 19 Vict. c. 91, s. 11. Q. B. 421 ; 44 L. T. 177; 29 W. (g) Stapleton v. Haymen, 2 H. R. 665.

be to leave the ship or share therein in the order and disposition of the previous owner, or of the mortgagor within the Bankruptcy Act (j).

A transferee of a British ship, or share in it, cannot be registered as owner till he has made the declaration prescribed by the Merchant Shipping Act, 1854 (1).

The High Court of Justice in England or Ireland, the Court of Session in Scotland, or the principal civil court in any British possession, may, on application of any interested party, prohibit any transfer of a British ship, or share in it (1).

A sale by licitation of a British ship, or of a share therein, without a conveyance by a bill of sale, will not entitle the purchaser to be entered on the register as owner (m).

A vessel built to be sold to a foreigner, and to be delivered at a foreign port, is not a British ship, and therefore can be assigned without a bill of sale, and without being registered (n).

Mere registration of the bill of sale will not give any title to the ship or shares to a person not really entitled. But such a person will be compelled in equity to execute a re-transfer in favour of the real owner, and to account for all the earnings of the vessel while he was registered as owner; even though there has been no fraud ().

So an instrument which appears on the face of it to be an absolute transfer will be treated in equity as a mortgage, if it appear that the parties intended it to operate as such. Any alterations, though immaterial, in a bill of sale Alterations

vitiate bill of will, if made by the owner, vitiate it. Even if made by a sale.

(j) Boyson y. Gibson, 4 C. B. (m) Chasteauneuf v. Capeyron, 7 121; Campbell v. Thompson, 2 Hare, App. Cas. 127; 51 L. J., P. C. 37. 140; Stapleton v. Haymen, 2 H. & (n) The Union Bank of London v. C. 918.

Lenanton, 3 C.P. D. 243. (k) 17 & 18 Vict. c. 104, s. 56; (6) Holderness v. Lamport, 29 and Forms issued by Commis- Beav. 129; The Innisfallen, L. R., sioners of Customs.

1 A. & E. 72; 25 & 26 Vict. c. 63, (1) 17 & 18 Vict. c. 104, s. 65 ; s. 3; and see " Cases” at end of 24 Vict. c. 10, s. 12; and Nicholas v. Drachacis, 1 P. D. 72.

N.

this §.

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stranger without the owner's consent, the bill of sale will be vitiated, provided the alterations be material (n).

CASES. 1. A vessel was arrested in a cause of restraint instituted by one co-owner against the other co-owners. The court, on a motion by the party to whom the vessel had been chartered for a certain voyage, ordered her to be released, it having been proved that the alleged co-owner was only a mortgagee (o).

2. A. agreed to purchase of B. a ship, then being built in Canada by B., B. agreeing to complete and deliver it at Liverpool, and to do all further acts necessary to its being registered in A.'s name. Before its completion B. became bankrupt; and his assignees claimed the ship as being within his order and disposition at the time of his bankruptcy. It was sold by them to C., and C. was registered as its owner. C. sent the ship to Liverpool with a cargo. On a bill filed by A., the court held that A. was entitled to the ship, and that C. should be compelled to re-transfer her to A., and to account for the earnings, notwithstanding the Merchant Shipping Act, 1854 (p).

$ 12. Certificates of

The registrar of the port of registry can grant to the sale or mortgage. owner of a registered ship a certificate of sale or mortgage,

authorizing certain persons specified in it to sell or mortgage the vessel at any place out of the country or possession in which the ship's port of registry is situated (9). The object of this is to enable a registered owner to mortgage or sell his ship at any place out of the country where her port is situate.

No such certificate of sale can be granted, except for the sale of the entire ship (r).

§ 13. Mortgage,

A British ship, or any share in her, can only be validly how effected.

mortgaged in the form prescribed by the Merchant Shipping Act, 1854 (8). If the mortgage be in any other form, no

(n) Pigot's case, 11 Coke, 27; (9) 17 & 18 Vict. c. 104, ss. 76 Davidson v. Cooper, 13 M. & W. -83. 343; Master v. Miller, 2 H. Bl. 141. (7) Ib. s. 81.

(c) The Innisfallen, L. R., 1 A. (8) Ib. ss. 66 and 96; and Forms & E. 72.

issued by the Commissioners of (p) Holderness v. Lamport, 29 Customs. Beav. 129.

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