CHAPTER XV. OF MORTGAGES OF SHIPS, FREIGHT AND CARGO. SECTION I. MORTGAGES OF SHIPS AND SHARES THEREIN. and Ship not a chattel passing by i.-Registration of British Ships and of Owners of Ships Shares. A ship is not like an ordinary chattel; it does not pass by delivery, nor does the possession of it prove the title to delivery. it. There is no market overt for ships (a). Mortgages of British ships have long been the subject of Statute law as statutory regulations, which were so strict in regard to defects to mortgages of ships. in the assurance as almost to oust the jurisdiction of equity: but all former statutes were repealed by the Merchant Shipping Repeal Act, 1854 (b). And in the same year the Merchant Shipping Act, 1854 (c), was passed, which, with the amending Acts (d), has been repealed by the Merchant Shipping Act, 1894 (e), which has consolidated the previous law on the subject. Mortgages of British ships are now exclusively regulated by Merchant Shipping Act, the Merchant Shipping Act, 1894 (e). This Act substantially 1894. re-enacts the provisions relating to or affecting mortgages of ships and shares contained in the former Acts, and accordingly the decisions on those Acts appear for the most part to be in force in determining the construction of the present Act and the rights of parties thereunder. A British ship within the meaning of the Act is a ship the Meaning of owners of which comply with the qualifications as to birth, term "British ship." naturalization, or denization mentioned in the Act, but not British-born persons bearing allegiance to a foreign State; also bodies corporate established under and subject to the laws of, (a) Hooper v. Gunn, L. R. 2 Ch. A. 290. (b) 17 & 18 Vict. c. 120. (c) 17 & 18 Vict. c. 104. CHAPTER XV. and having their principal place of business in, some part of her Majesty's dominions (ƒ). Registration of British ships. Division of ship into sixty-four shares. Register book. Entry of particulars in Every British ship must be registered, and will not be recognized as a British ship until registered, in manner prescribed by the Act (g). In contemplation of the Act a ship is divided into sixty-four shares, and any one or more shares, but not a fractional part of a share, may be the subject of mortgage under the Act (h). The Act of 1894 enacts as follows: Sect. 5. "Every registrar of British ships shall keep a book to be called the register book, and entries in that book shall be made in accordance with the following provisions: (1.) The property in a ship shall be divided into sixty-four shares. (2.) Subject to the provisions of this Act with respect to joint (3.) A person shall not be entitled to be registered as owner of a (5.) A corporation may be registered as owner by its corporate name. The Act of 1894, after providing for declarations as to ownerregister book, ship by individual owners and corporate bodies (i), and as to the evidence to be produced on the registry of a ship (), proceeds, by s. 11, to prescribe that the registrar shall enter in the register book particulars as to (1) the name and port of the ship; (2) details as to her tonnage, build, and description; (3) particulars of origin; (4) names and descriptions of her registered owner or owners, and if there is more than one owner, the proportions in which they are interested. Notice of By sects. 56 and 57 of the same Act it is enacted as follows:- CHAPTER XV. trusts not shall be entered in the register book or be receivable by the registrar, and subject to any rights and powers appearing by the register book to be vested in any other person, the registered owner received. of a ship or of a share therein shall have power absolutely to dispose in manner in this Act provided of the ship or share, and to give effectual receipts for any money paid or advanced by way of consideration." Sect. 57. "The expression beneficial interest, whenever used in Equities not this part of this Act, includes interests arising under contract and excluded by other equitable interests, and the intention of this Act is, that with- Act. out prejudice to the provisions of this Act for preventing notice of trusts from being entered in the register book, or received by the registrar, and without prejudice to the powers of disposition and of giving receipts conferred by this Act on registered owners and mortgagees, and without prejudice to the provisions of this Act relating to the exclusion of unqualified persons from the ownership of British ships, interests arising under contract or other equitable interests, may be enforced by or against owners and mortgagees of ships in respect of their interest therein, in the same manner as in respect of any other personal property." Accordingly, where a transfer of a ship was executed in the Evidence of form prescribed by s. 55 of the repealed Act of 1854, so as to be equities. absolute in its terms, it was held that the owners were not precluded from showing that the transfer was intended to be as a security only (1). Similarly, where a mortgage of a ship was made in the form. prescribed by s. 66, and transferred according to the form prescribed by s. 73, it was held that the Court was at liberty, by virtue of the section above set out, in estimating the rights of the transferee of the mortgage, to consider not only the registered documents, but all the transactions relating to the loan (m). certificate. Sects. 14 to 23 of the Act of 1894 contain provisions as to Certificates of registry. certificates of registry on which all changes of ownership must be indorsed; and, by s. 15, it is enacted that, "The certificate Custody of of registry shall be used only for the lawful navigation of the ship, and shall not be subject to detention by reason of any title, lien, charge, or interest whatever, had or claimed by any owner, mortgagee, or other person to, on, or in the ship"; and the refusal to deliver it on demand to the person entitled to it for the purpose of navigation, officers of customs, or other person legally entitled to require it, is punishable by penalty. It is, therefore, illegal to pledge the certificate, and the person Certificate entitled to it for the purpose of navigation, though himself (1) Ward v. Beck, 13 C. B. N. S. 668; Innisfallen, L. R. 1 A. & E. 72. See VOL. I.-R. also Keroula, 11 P. D. 92. S cannot be pledged. CHAPTER XV. the pledger, may maintain an action (n), after demand for its delivery, and may recover damages for the wrongful detainer, in addition to his right to proceed for the penalty. Transfer of ships or shares. Declaration of transfer. Register of transfer. Validity of transfer in bankruptcy. Improper transfer. Distinction between legal The Act of 1894 contains the following provisions as to transfers and transmission of ships and shares therein : Sect. 24.-"(1.) A registered ship or a share therein (when disposed of to persons qualified to own a British ship) shall be transferred by bill of sale. "(2.) The bill of sale shall contain such description of the ship as is contained in the surveyor's certificate, or some other description sufficient to identify the ship to the satisfaction of the registrar, and shall be according to the form marked A. in the first part of the First Schedule to this Act, or as near thereto as circumstances permit, and shall be executed by the transferor in the presence of, and be attested by, a witness or witnesses." By s. 25, it is provided that a transferee shall not be registered until he, or, in the case of a corporation, the proper officer, has made a declaration stating his qualification, or that of the corporation, to be registered as owner; and that no unqualified person or body of persons is entitled as owners to any legal or beneficial interest in the ship or any share therein. By s. 26, upon production to the registrar of the transfer and prescribed declaration, he is to enter in the register book the name of the transferee, and to indorse on the transfer the fact of such entry, with the date and hour thereof. Transfers are to be registered in the order of their production to the registrar. The mere transfer of a ship under s. 24 gives the transferee a good title against the trustee in bankruptcy of the transferor, although, until registration, he could not transfer it to a purchaser under s. 26 (o). A registration founded on a sale by an attorney in excess of his power was held to give no title, even at law, to the person thereby registered as owner (p); and a re-transfer was directed to be executed by a person who had been registered as owner under a mistake as to title (q). In the transfer of a British ship, there is a clear distinction and equitable between the legal estate and mere beneficial interests therein. interests. (n) Wiley v. Crawford, 1 B. & S. 253, 265. (0) Stapleton v. Hayman, 2 H. & C. (p) Orr v. Dickenson, John. 1. (9) Holderness v. Lamport, 29 Beav. 129. A sale of the beneficial interest by licitation, without a bill CHAPTER XV. of sale, does not entitle the purchaser to be registered as owner (r). bankruptcy, Sect. 27 of the Act provides that, "where the property in a Transmission of property in registered ship or share therein is transmitted to a person ship on death, qualified to own a British ship on the marriage, death, or bank- marriage, ruptcy of any registered owner, or by any lawful means other &c. than by a transfer under this Act," such transmission shall be authenticated by means of a declaration of transmission identifying the ship and containing prescribed statements, and accompanied by certain prescribed evidence; and that the registrar, on receipt of the declaration of transmission so accompanied, is to enter in the register book the name or names of the person or persons entitled to be registered by virtue of the transmission. If a ship or a share or shares therein intended to form the Precautions to be taken by security for a loan have passed from the original owner by mortgagee of transfer or transmission, the intending mortgagee should satisfy transferred or himself, by inspection of the documents of title and the register ship. book, that the required formalities have been observed, so as to confer a good title to the property (s). ii.-Form and Registration of Mortgages of Ships and Shares. —With regard to mortgages of ships and shares in ships, the Act of 1894 contains the following enactments: transmitted Sect. 31.-"(1.) A registered ship, or a share therein, may be Mortgage of made a security for a loan or other valuable consideration, and the ship or share. instrument creating the security (in this Act called a mortgage) shall be in the form marked B. in the first part of the First Schedule to this Act, or as near thereto as circumstances permit, and on the production of such instrument the registrar of the ship's port of registry shall record it in the register book. 66 (2.) Mortgages shall be recorded by the registrar in the order in time in which they are produced to him for that purpose, and the registrar shall by memorandum under his hand notify on each mortgage that it has been recorded by him, stating the date and hour of that record." A mortgage of a ship passes, as incident thereto, all articles What passes by mortgage necessary to the navigation of the ship or to the prosecution of of ship. (r) Chasteauneuf v. Capeyron, 7 App. Cas. 127. 918. (s) Stapleton v. Haymen, 2 H. & C. |