CHAPTER VII.

POSSESSION AND CO-OWNERSHIP.

tion.

The jurisdiction of the Court in questions of possession Jurisdicbetween co-owners depends upon section 8 of the Admiralty Act, 1861, which provides that the High Court of Admiralty shall have jurisdiction to decide all questions arising between the co-owners, or any of them, touching the ownership, possession, employment, and earnings of any ship registered at any port in England or Wales, or any share thereof, and may settle all accounts outstanding and unsettled between the parties in relation thereto, and may direct the said ship or any share thereof to be sold, and may make such order in the premises as to it shall seem fit.

husband.

Where a vessel belongs to several co-owners they generally Ship's elect one of their number to manage it exclusively. The owner so elected is termed the ship's husband, or managing owner. The name and address of a ship's husband or managing owner must be registered at the custom-house of the ship's port of registry.

Each part-owner of a ship is liable as a partner for the full amount of the expenses incurred on its account, unless he can show that such expenses were not incurred on his own credit (1).

It has been pointed out by a well-known authority that the law of England in general declines to interfere in the disputes of co-owners, leaving it to themselves either to enjoy their common property by agreement, or to suffer it to remain unenjoyed or perish by their dissension. But with regard to ships, "which are built to plough the sea, and not to lie by the walls," the law of England, like that of other commercial nations, regards their actual employment as a matter of public policy, and takes care "to prevent the obstinacy of some of the part-owners from condemning the ship to rot in idleness (2). The laws of England, however, differ from those of other

(') Frazer v. Cuthbertson, 6 Q. B. D. 93, ante, p. 1029.
(2) Abbott on Shipping, p. 58.

1

Action of

restraint.

countries in that, while authorizing the majority in value to employ the ship "upon any probable design," they take care to secure the interest of the dissentient minority from being lost in the employment of which they disapprove.

The Admiralty Division has "a special jurisdiction in cases of disagreement among co-owners of a ship to prevent the obstinacy of some of the owners damaging the rights and interests of the rest" (1).

A part-owner holding a minority of shares in a vessel is entitled to institute an action of restraint and arrest the vessel; and the Court is bound, on sufficient proof being adduced, that the plaintiff objects to the manner in which the vessel is being employed, to order that security for the safe return of the vessel be given by the remaining part-owners, in the amount of the plaintiff's interest in the vessel.

In a case which came very recently before the Court (2), two sureties had executed a bail bond for the safe return of a ship, but the duration of the time for which the bond was to continue was left indefinite. After the bond had been in existence for three years, and when the vessel was in this country, and the holders of the majority of the shares were changed, the Court considered that it would be unreasonable to keep the sureties under a liability in perpetuity; and it accordingly ordered the sureties to be released and the bond cancelled on such terms as might be fair.

The Court has a discretionary power to order a vessel which is proceeded against in an action of co-ownership to be sold, but this power will be exercised with great reluctance at the instance of part-owners not possessing a majority of shares (3).

A part owner who dissents from the way in which a ship is employed is entitled to bail in the value of his shares, and he then incurs no liabilities and obtains no profits.

The law as to part-owners was considered in a recent case in which the plaintiff in the action, who was owner of two sixty-fourth shares, and all the other owners of the vessel had concurred in appointing two persons as ship's husbands and managers. The agreement declared that these persons "should be, and at all times thereafter discharge the duties of ship's husbands and managers of the owners, their executors, and

(1) Bruce's Admiralty, 25.

(2) The Vivienne, 12 P. D. 185, where the form of order is given.

(3) The Nellie Schneider, 3 P. D.

vessel, and of agents for the administrators," and also gave

152, where an order was made for the arrest of the ship, and that she should be appraised and sold.

the managers authority to perform all the usual duties of ship's husbands.

The President decided that this agreement did not prevent the plaintiff as a dissentient part-owner from exercising his legal rights, and that it did not confer on the ship's husbands an arbitrary and exclusive management of this vessel as long as she was in existence, and he accordingly decided that the plaintiff was entitled to obtain bail from the other part-owners in the value of his shares (1).

() The England, 12 P. D. 32, 33.

Mode in which

effected.

CHAPTER VIII.

MORTGAGES OF SHIP.

Mortgages of ships are governed by the Merchant Shipping Act, 1854. By that Act (1) a registered ship, or any share or shares in a registered ship, may be mortgaged.

The mortgage is effected by a bill of sale, which must be in mortgage is accordance with the form provided by the Act, containing an elaborate and detailed description of the vessel. Upon the production of this instrument at the port of registry, the registrar makes a record of it, and, in cases where there are several mortgages of the same ship or share, the mortgagees have priority over one another, notwithstanding any express, implied, or constructive notice, according to the date at which each instrument has been recorded in the register, and not according to the date of the instrument. If the mortgage be in any other form, the registrar cannot be required to record it unless expressly directed by the Commissioners of Customs (2).

The Court of Admiralty had originally no jurisdiction in respect of mortgage, but by the joint effect of the Admiralty Practice and Jurisdiction Act of 1840, and the Admiralty Court Act, 1861 (3), such has been given and extended.

Section 11 of the latter Act provides that the Court of Admiralty shall have jurisdiction over any claim in respect of any mortgage duly registered according to the provisions of the Merchant Shipping Act, 1854, whether the ship, or the proceeds thereof, are under arrest of the Court or not.

A registered mortgagee can, accordingly, himself institute an action in the ordinary way (4), and can have the ship arrested and detained until bail be given to the amount of his claim. In a case in which a vessel was owned as to 16 sixty-fourth

(1) Sect. 66; see as to what passes by mortgage of a ship: Coltman v. Chamberlain, 25 Q. B. D. 328.

(2) Merchant Shipping Act, 1854, s. 69; 18 & 19 Vict. c. 91, s. 11; Chasteauneuf v. Capeyron, 7 App. Cas.

127.

(3) 3 & 4 Vict. c. 65; 24 & 25 Vict. c. 10.

() The jurisdiction may be exercised either in rem or in personam: 24 Vict. c. 10, s. 35; and see Bruce's Admiralty, 2nd ed. p. 31, et seq.

shares by the master, and as to 48 sixty-fourth shares by another person, the owner of the 48 shares gave the captain a power of attorney to sell his shares. The captain sold the entire vessel at Sydney, where she was re-registered. The co-owner had meanwhile mortgaged his shares, and the mortgage had been registered. The Court decided that the mortgagee was entitled to the shares of ship and freight paramount to the purchaser in Sydney, but subject to allowing him in account for the proportion as of outfit of the ship and the voyage to London (1).

mortgagee.

The mortgagee is not deemed to be the owner of the Position of vessel (2), but he has an absolute power of sale, and can give good receipts for the purchase-money (3). A second mortgagee, however, must, before he can exercise the statutory power of sale, obtain the concurrence of the first mortgagee.

Provision is also made to enable an owner to dispose by way of sale or mortgage of a ship or shares at any place abroad, by obtaining from the registrar at the port of registry what are called certificates of sale or of mortgage, which purport to give power to sell or mortgage (4).

The mere fact of the owner of a vessel having executed an absolute transfer of the ship will not preclude him from showing that the intention was to transfer the ship by way of mortgage only (5). The Court will look behind the register to the real character of a transaction, and treat an absolute transfer as a mortgage if it appears that that was the intention of the parties (6). And where a ship, then at sea, was transferred by an absolute bill of sale, which was duly registered, but the transfer was only intended as collateral security for a loan, and the grantor entered into contracts abroad within the general scope of his authority, the Court decided that there was no evidence, either actual or implied, for the master to act as his agent, and that he was not liable on the contracts (7).

"If," said the judges in the superior Court, "this had been the case of an absolute sale, there might have been some doubt about it. But, as it was a mere mortgage by way of security, there is none."

If a man takes a mortgage of land, can he be held responsible