Mortgages.—A registered ship or a share therein may be made a security for a loan or other valuable consideration, but the mortgage must be in the prescribed form. On its production the registrar of the ship's port of registry must record it in the register book. Mortgages are recorded in the order in time in which they are produced for that purpose, and the registrar notifies on each mortgage that it has been recorded by him, stating the day and hour of that record. When a registered mortgage is discharged, the registrar, on the production of the mortgage deed, with a receipt for the mortgage money indorsed thereon, duly signed and attested, makes an entry in the register book to the effect that the mortgage has been discharged, upon which the estate which passed to the mortgagee (subject to intermediate acts, if any) vests in the person in whom it would have vested if the mortgage had not been made. If there are more mortgages than one registered in respect of the same ship or share, the mortgagees are, notwithstanding any notice, entitled in priority according to the date at which each mortgage is recorded in the register book, and not according to the date of each mortgage itself. Except as far as may be necessary the mortgagee is not deemed to be the owner of the ship or share, nor is the mortgagor deemed to have ceased to be the owner thereof. Every mortgagee has power absolutely to dispose of the ship or share in respect of which he is registered, and to give effectual receipts for the purchase-money. But where there are more persons than one registered as mortgagees of the same ship or share, a subsequent mortgagee cannot, without the consent of the Court, sell the ship or share without the consent of every prior mortgagee. A registered mort gage of a ship or share is not affected by any act of bankruptcy committed by the mortgagor after the date of the record of the mortgage, notwithstand ing that the mortgagor at the commencement of his bankruptcy had the ship or share in his possession, order or disposition, or was reputed owner thereof, and the mortgagee is preferred to any claim of the other creditors of the bankrupt, or his trustee or assignee. A registered mortgage of a ship or share may be transferred to any person in the prescribed form, and on the production of the instrument the registrar will record it by entering in the register book the name of the transferee as mortgagee, and notify on the instrument of transfer that it has been recorded by him, stating the day and hour of the record. Where the interest of the mortgagee in a ship or share is transmitted on marriage, death, or bankruptcy, or any lawful means other than by a transfer, the transmission must be authenticated by a declaration of the person to whom the interest is transmitted, containing a statement of the manner in which and the person to whom the property has been trans mitted, and must be accompanied by evidence as in the case of the transmission of the ownership of a ship or share, and upon the receipt of the declaration and the production of such evidence, the registrar will enter the name of the person entitled under the transmission in the register book as mortgagee.
Certificates of mortgage and sale.—A registered owner, if desirous of disposing by way of mortgage or sale of the ship or share in respect of which he is registered at any place out of the country in which the port of registry of the ship is situate, may apply to the registrar, who will enable him to do so by granting a certificate of mortgage or a certificate of sale. Before such certificate is granted the applicant must state, and the registrar must enter in the register book the following particulars :—(1) The name of the person by whom the power mentioned in the certificate is to be exercised, and in the case of a mortgage the maximum amount of the charge to be created, if it is intended to fix a maximum, and in the case of a sale the minimum price at which a sale is to be made, if it is intended to fix a minimum ; (2) the place where the power is to be exercised, or if no place is specified, a declaration that it may be exercised anywhere ; (3) the limit of time in which the power may be exercised. A certificate of mortgage or sale will not be granted so as to authorise any mortgage or sale to be made if the port of registry of the ship is situate in the United Kingdom, at any place within the United Kingdom ; or if it is situate within a British possession, at any place within the same ; or if it is established by order in council at that port, or within such adjoining area as is specified in the order ; or by any person not named in the certificate. A certificate of mortgage and a certificate of sale must contain the several particulars required to be entered in the register book on the application therefor, and in addition thereto an enumeration of any registered mortgages or certificates of mortgage or sale affecting the ship or share in question. The following rules are to be observed as to certificates of mortgage :—(1) The power must be exercised in conformity with the directions contained in the certificate ; (2) every mortgage made thereunder must be registered by the indorsement of a record thereof on the certificate by a registrar or British consular officer; (3) a mortgage made in good faith thereunder cannot be impeached by reason of the person by whom the power was given dying before the making of the mortgage ; (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, a mortgage made in good faith to a mortgagee without notice cannot be im peached by reason of the bankruptcy of the person by whom the power was given ; (5) every mortgage which is so registered on the certificate has priority over all mortgages of the same ship or share created subsequently to the date of the entry of the certificate in the register book ; and if there are more mortgages than one so registered, the respective mortgagees claiming thereunder are, notwithstanding notice, entitled according to the date at which such mortgage is registered on the certificate and not according to the date of the mortgage ; (6) subject to the foregoing rules, every mortgagee whose mortgage is registered on the certificate has the same rights and powers, and is subject to the same liabilities as he would have had and been subject to if his mortgage had been registered in the register book instead of on the certificate ; (7) the discharge of any mortgage so registered on the certificate may be indorsed on the certificate by any registrar or British consular officer, on the production of such evidence as is required to be pro duced to the registrar on the entry of the discharge of a mortgage in the register book, and on that indorsement being made, the interest (if any) which passed to the mortgagee, vests in the same person or persons in whom (having regard to intervening acts and circumstances) it would have vested if the mortgage had not been made ; (8) on the delivery of any certificate of mortgage to the registrar by whom it was granted he must, after recording in the register book, in such a manner as to preserve its priority, any un satisfied mortgage registered thereon, cancel the certificate, and enter the fact of the cancellation in the register book ; and every certificate so can celled is void. The following rules are to be observed as to certificates of
sale :—(1) A certificate of sale cannot 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) a sale made in good faith thereunder to a purchaser for value cannot be impeached by reason of the person by whom the power was given dying before the making of such 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, a sale made in good faith to a purchaser for value without notice cannot be impeached by reason of the bankruptcy of the person giving the power ; (5) a transfer to a person qualified to be the owner of a British ship must be by a bill of sale ; (6) when the ship is sold it must be registered ; but notices of all mortgages enumerated on the certificate are entered on the register book ; (7) before registry anew the bill of sale, certificate of sale, and certi ficate of registry must be produced to the registrar; (8) he retains the certificates of sale and registry, and after having indorsed on them an entry of the sale forwards them to the former port of registry of the ship, and the last-mentioned registrar thereupon makes a memorandum of the sale in his register book, and the registry of the ship in that book is closed, except as regards mortgages ; (9) on registry anew no re-survey is necessary, and the purchaser's declaration is similar to that of an ordinary transferee ;' (10) if the ship is sold to a person not so qualified the bill of sale, the certificate of sale, and certificate of registry must be produced to a registrar or British consular officer, who retains the certificates of sale and registry, and having indorsed thereon the fact of such sale forwards them to the registrar of the port of registry ; the latter makes a memorandum thereof in his register book, and the registry of the ship in that book is closed, except as regards mortgages ; (11) on such sale to a person not so qualified if he makes default in the production of such certificates he acquires no title in the ship accord ing to British law, and the person applying for the certificate and the person exercising the power are each liable to a fine of .V100 ; (12) if no sale is made in conformity with the certificate of sale it must be delivered to the registrar granting it, who cancels it. On proof that a certificate of mort gage or sale is lost, destroyed, or obliterated, and that the powers thereby conferred have never been exercised, or if they have been exercised then on proof of the things that have been done thereunder, the registrar may with the sanction of the Commissioners of Customs issue a new certificate, or direct such things to be done as could have been done if the certificate had not been lost, destroyed, or obliterated. The registered owner of any ship or share therein in respect of which a certificate of mortgage or sale or mortgage has been granted, specifying the places where the power is to be exercised, may authorise the registrar by whom the certificate was granted to give notice to the registrar or consular officer at every such place that the certificate is revoked. Notice must be given accordingly, and on its being recorded by the registrar or consular officer receiving it, the certificate is deemed to be of no effect so far as respects any mortgage or sale thereafter made at that place. The notices when recorded must be exhibited to every person applying for the purpose of effecting or obtaining a mortgage or transfer under the certificate. A registrar or British consular officer on recording any such notice must state to the registrar by whom the certificate was granted whether any previous exercise of the power to which such certificate refers has taken place.