Putnam's Handy Law Book for the Layman

Shipping. - The federal statutes require that every ship or vessel of the United States shall be registered or enrolled in the office of the collector of customs of the district that includes the home port of the vessel. None but citizens of the United States can have their vessels registered. [236]Consequently the sale of a vessel to a foreigner denationalizes her. If sold to an American, she must be registered anew. On arriving at a foreign port masters of vessels must deposit their registers with the consul or commercial agent at that port.

Enrollment is the term used to describe the registry of a vessel engaged in coastwise or inland navigation or commerce. Registration is applied to vessels engaged in foreign commerce. License means the same as enrollment, but is applied to small vessels of twenty tons burden or less. The federal laws on this subject do not apply to vessels that are used on nonnavigable waters of the country.

The title to a vessel may be acquired by purchase or building. If a vessel is built for a party no title thereto passes until she is ready for delivery and has been approved and accepted by him. This, however, is no arbitrary rule, and is often modified especially when payment is made in installments and during the construction of the vessel.

Nowadays many vessels are owned by corporations, and the rules that apply to corporations of course determine the ownership of their property. In other cases the several owners of a vessel are tenants in common, and not co-partners, unless by agreement they have established other relations among themselves. They may, of course, become partners and be governed by the rules that apply to persons thus related. When they are related as tenants in common one part owner has no power to bind the others in any way beyond the necessary and regular use of the vessel. He cannot sell or mortgage the interests of the others, draw drafts or notes in their name, apply the freight money earned to pay his individual debt, or procure insurance for the other owners.

[237]The majority rule governs in employing the vessel. The majority therefore have the right to control the use of the vessel on giving security to the minority, if required, to bring back and to restore to them the vessel, or if lost to pay them for the value of their shares. The minority owners in like manner may use the vessel if the majority are unwilling to employ her. A court of admiralty will in such a case act for the parties.

Each part owner is entitled to his share of the profits, and is also liable for the expenses of the vessel unless he has dissented from the voyage. But part owners who dissent from the voyage and take security for the safe return of the vessel are not entitled to share in the profits, nor are they liable for the expenses.

A part owner may bind the others for necessary supplies and repairs required that are procured on credit, unless his general authority to do this has been restricted. The ship's husband or managing owner has authority to do whatever is necessary for the prosecution of the voyage and earning the freight money. For such purposes he is the agent of the owners and can bind them by his contracts, unless his authority is revoked or modified.

Any owner can sell his interest whenever he pleases, and all of them may authorize the sale of the entire vessel. A writing is required to pass the title, but as between the parties an oral sale and delivery will suffice, at common law. In many cases a bill of sale is required by statute. The writing should describe what things are transferred, but general terms such as appurtenances and necessaries have a fixed meaning which are understood. Intention is the guide to determine what passes in such a sale, as in cases of fixtures already considered.

[238]When the bill of sale is executed the purchaser becomes entitled to all the benefits of ownership, and incurs all the liabilities. If the sale is unconditional, the purchaser is liable for supplies though he may never have taken possession of the vessel, and neither the master nor the merchant furnishing the supplies knew of the sale. The purchaser is not liable for repairs made and supplies furnished before the sale, unless he has agreed to pay for them, or the vessel was at sea at the time. If she was, the purchaser takes her subject to all encumbrances on her, and to all lawful contracts made by the master before learning of the purchase.

A vessel may be mortgaged, and the federal statutes state how this shall be done. A shipbuilder may make a contract whereby he mortgages the vessel to be built in advance of its construction, and a lien attaches as it comes into existence. Such a mortgage is postponed or comes after a maritime lien, that will soon be explained, but comes before the debts of general creditors.

The mortgagor, so long as he retains possession, has all the rights of ownership, and all contracts made by him are valid which do not impair the security of the mortgage. When the mortgagee takes possession of the vessel he is entitled to all the earnings that accrue, but not to those which the mortgagor has reserved, even though they are for the current voyage. Furthermore, his interest may be attached by his creditors. The discharge and foreclosure of mortgages on vessels are governed for the most part by the rules that apply to chattel mortgages. A mortgage on a vessel should be recorded, and many of the rules and usages that apply to the recording of deeds apply also to such mortgages.

[239]A contract may be made for a loan of money on the bottom of a vessel at a rate much greater than the usual rate of interest. Such a loan is sanctioned to enable the master to obtain money for supplies or repairs at some foreign port where they could not be otherwise obtained. The loan is on the security of the vessel and if she never arrives, the lender loses his money. If she does arrive at the port of her destination, the borrower personally, as well as the vessel, is liable for the repayment of the loan with the agreed interest thereon. This maritime loan is highly regarded in legal tribunals, and is liberally construed by them to carry into effect the intention of the parties.

Such a loan or bond can be given by the master of the vessel only in case of necessity and great distress in a foreign port, where the owner is not present and has no representative with funds, and where the master has no other means of getting money. The master has a large discretion. "The necessity must be such as would induce a prudent owner to provide funds for the cost of them on the security of the ship, and that if the master did not take the money the voyage would be defeated or at least retarded." The general purpose of the loan is to effectuate the objects of the voyage and the safety of the ship.

The appointment and employment of a master is wholly within the discretion of the owners. On his death or removal in a foreign port a successor may be appointed by the consul resident there of the country to which the vessel belongs, or by an agent of the owners, or by the consignees of the cargo who have advanced money for repairing the vessel. The registry acts of the United States require the putting of the master's name in the [240]register, but if this is not done his authority is not impaired; and the one to whom the navigation and control of a vessel is entrusted is considered her master, although the name of another appears on the register. His contract may contain any stipulation to which the parties may agree. The right of a master to command his vessel is personal to him; and a sale by a master who is part owner of the vessel of his interest therein transfers no right to the command of the vessel which the other owners are bound to respect. Whenever he becomes incapable of commanding by reason of sickness, insanity, or other reason, the command with the duties pertaining thereto devolves on the first mate until the appointment of another master; should he be absent or incapable of acting, then the second mate and so on down the rank of officers.

The master must do all things for the protection and preservation of the several interests entrusted to him, the owners, charterers, cargo owners, underwriters. He must render a full and satisfactory account to the owners of the vessel of moneys secured and his disbursements before demanding any wages. At sea he is the supreme officer, has sole authority over both officers and crew to do justice to all persons under his command, and to protect passengers and seamen from bad treatment while they are on board. It is said that in respect to passengers he owes a higher and more delicate duty than he owes to the crew, but at the same time he has the necessary control over his passengers and may make proper regulations for their government to ensure their safety, promote their comfort and preserve decent order.

He has authority to bind the owners when they are not present for expenditures needful in the way [241]of repairs, supplies and other necessaries reasonably fit and proper for the safety of the vessel and the completion of the voyage.

As the seamen who serve on a vessel are generally ignorant and improvident, the execution of shipping articles are required by federal statute where the vessel is bound on a foreign voyage, or from a port in one state to a port in another. If these articles are not made seamen have the right to leave the vessel at any time, and may recover the highest rate of wages paid at their shipping port. The articles must be signed by the seaman and by the master, and the contract must be executed before the vessel proceeds on its voyage. The seaman is not bound by any new or unusual stipulation put into the articles affecting his rights without full knowledge of it, and especially when he cannot read and the stipulation is not read and explained to him. Once executed, the articles cannot be varied by a verbal agreement between master and seaman.

The articles must specify clearly and definitely the nature of the intended voyage, the port at which it is to end and its duration. Indefinite articles, leaving to the option of the master whether the voyage shall be long or to one or more foreign ports, or short to nearby domestic ports, are void. The articles must also state the amount of wages each seaman is to receive. Articles are void that fix a forfeiture of wages in excess of the amount named in the statute, or restrict the time in which seamen must sue for their wages. The contract may be dissolved by cruel treatment by the master and by an abandonment of the vessel without the master's consent, but not by the death, disability, removal or resignation of the master and the substitution of another. Besides the wages a seaman may recover, [242]should the master break the contract, are his expenses in returning to the port of shipment including also general damages.

Claims for wages are "highly favored in admiralty courts," and discharges are not justified for trivial causes, nor for a single offense unless it is an aggravated one. Such causes are continued disobedience or insubordination, rebellious conduct, gross dishonesty, embezzlement or theft, habitual drunkenness, habitually stirring up quarrels, or by his own fault rendering himself incapable of performing duty. The master must receive back a seaman when he has thus been discharged who repents and offers to return to his duty and make satisfaction, unless the offense was of an aggravated character. This is the general rule, though from its nature there is much room for its application.

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