A transfer of mortgage, to be indorsed on the original mortgage, is as follows :— [" I " or " we "] the within-mentioned in consideration of this day paid to [" me " or " us "1 by hereby transfer to [" him " or " them ", the benefit of the within-written security. In witness whereof [etc., as above'.
When a mortgage is paid off, the following memorandum of its discharge may be indorsed on the mortgage : Received the sum of in dis charge of the within-written security. Dated at this day of 19 . Witness of The Commissioners of Customs may, with the consent of the Board of Trade, make such alterations in the prescribed forms as they may deem requisite. (Section 65.) The forms can be obtained from the registrar at any port of registry.
No notice of any trust, express, implied, or constructive shall be entered in the register book. (Section 56.) Any register book may be inspected on payment of a fee not exceeding one shilling. (Section 64.) Any instruments used with regard to the registry, ownership and mortgage of a British ship are exempt from stamp duty. (Section 721.) (See STAMP DUTIES, General Exemption, No. 2.) When a banker takes a mortgage upon a ship the policy of insurance should he left in his possession, and it is better that it should be in the bank's name. In some cases, how ever, it is sufficient if a letter is given by the customer stating that he holds the policy on behalf of the bank.
A banker should make quite certain that the premiums are duly paid. When the premiums are payable quarterly, the brokers of the underwriters will require to hold the policy, and in that case a letter should be taken from the brokers stating that they hold the policy (subject to their claim for the amount of any quarterly premiums remaining unpaid), on behalf of the bank, and undertaking to advise the bank of any premiums which fall due and are not paid. The policy should not be in a mutual society if the banker has to accept liability for calls. (Sae MUTUAL INSURANCE.) In taking policies, the banker should inquire as to liabilities and, generally, as to the nature of the policies.
It is very essential that a steamer should be entered by the owner in a Protection, Club for the risks of protection, indemnity and defence, and be insured up to IS per ton on her gross registered tonnage against liability for damage that may be done by the boat to other vessels. A hanker should satisfy himself that this important matter has been attended to by the owner.
The mortgage should, as stated above, be registered at once. If there is a bill of sale in the customer's possession, it is usual to have it lodged, as it is useful to supply the particulars required for the mortgage, but the banker's security is obtained by regis tration of the mortgage. There is no value in the bill of sale itself, as, upon a sale or mortgage, it is not required by the registrar.
The register exists only for British ships, and if a vessel should be sold to a foreign flag, the registrar will give notice to any mortgagee whose charge is entered on the register that the transfer is taking place. If a reply of satisfaction is received the entry is expunged from the register ; if the reply is otherwise, the entry remains, but the transfer of the vessel still takes place. The effect is that the registrar gives a mortgagee notice, and the mortgagee must then look out for himself. It is all important that the mortgagors should be men of honour, or the security may, in the above way, suddenly disappear. (See CERTIFICATE OF MORTGAGE OF SHIP.) A British ship is liable to be attached in a foreign port for a debt incurred in that country, and whenever that happens it is clear that the value of a banker's mortgage in this country may be seriously affected It is also well for a banker to bear in mind that, in case of loss, the merchant who supplies a ship with stores for its last voyage has a first claim upon the boat, even in front of a banker's duly registered mortgage. The claim of the crew for wages also ranks in front of a mortgage. (See VALUATION OF SHIP, next article.)