II. 1. Chartering the vessel, or engagement of freight for

her.

2. Collection of freight.

3. Entry and clearance of ship, and Customs business. The first class of work is considered owner's work; the second, broker's work. But the same person may unite the functions of managing owner and broker; some owners do all their broker's work in their own office, and the exact division of the work varies with each shipowner.

Brokers who are not owners usually make one of the following branches of work their special business:

I.-Brokers for the sale of ships.

II. Chartering brokers, who find charters for ships, or ships for employment.

These two classes have no authority beyond their specific instructions in each particular case.

III.-Loading brokers, who habitually procure cargoes for vessels on the berth for a certain port or trade. Their connection with the merchants trading with such ports enables them to guarantee cargoes for vessels which they undertake to load, while to maintain that connection they must provide a fairly regular supply of vessels on that berth, by themselves chartering ships if necessary. They have power to make engagements to carry goods in the ship they load; they collect the freight on the engagements they have made, when such freight is payable at the port of loading; and they frequently supervise the stowage of the ship, though they do not accept responsibility to the shipowner for such stowage. They are paid as a rule by a percentage commission on the freight engaged. In certain trades, as the Australian, the chief loading brokers have formed a "ring," who in return for a merchant's promise to ship all his goods by the vessels loaded by the "ring" at an agreed rate, undertake to carry such goods at as low a rate as any vessel that may be put on the berth (h). All vessels on the berth which are not put in the hands of the ring to load, must be prepared to suffer severe competition. Some steam lines have specially appointed loading brokers, to whom application is made for room for goods to be shipped on any ship of the line, and to whom freight is paid. Their authority, however, is determinable by the shipowner, either on the terms of their appointment or at a moment's notice. On some lines all the loading broker's work is done in the managing owner's office (a).

66

Owner's work in foreign ports is done by the captain, or, in the case of vessels belonging to a regular line, by the branch house abroad, or by the captain, with the advice of the agents

(h) For an example of the working of such a "ring," see the facts in Mogul S.S. Co. v. Macgregor (1889), 23 Q. B. D. 598; (1892), A. C. 25. (a) Cf. Williamson v. Hine (1891), 1 Ch. 390.

of the line, but the system of submarine cables has much lessened the captain's sphere of direct action abroad. On the respective duties of broker and captain abroad to the owner, see Stumore v. Breen (i).

(c.) Captain.

In the absence of express authority from his owners, the captain's authority to bind them by a charter only arises when he is in a foreign port, when his owners are not there and there is difficulty in communicating with them, and when the charter is a usual one in its terms (k).

Before the arrival of his ship in port, no captain has any authority in law to bind his owners by letters written to an agent in port, asking him to make a charter for the ship before its arrival, and a charter so made would not be binding on the owners, unless subsequently ratified by them (7).

Semble (per Brett, L.J.), that a captain not having any authority to make such a contract cannot when in port ratify it, so as to bind his owners (7).

Where the captain is authorized to bind his owners, he will incidentally have the power to employ a broker or agent for this purpose (m).

Captains or agents at foreign ports have no authority to vary a charter, without express instructions from their principal (n), though they have authority to do all things necessary to perform the contract (o).

(1) (1866) 12 App. Cas. p. 698.

(k) Thus the captain has no right without instruction to execute a charter, excluding the right of his owners to freight; Walshe v. Provan (1853), 8 Ex. at p. 850, per Pollock, C.B. See Thomas v. Lewis, L. R. 4 Ex. D. 18.

(1) The Fanny; The Mathilda (C.A.), (1883), 48 L. T. 771. The system of submarine cables has much lessened the captain's duties in foreign ports, the owners now settling the employment of their vessel by telegraph in most cases. (m) De Bussche v. Alt (1878), L. R. 8 Ch. D. 286, 310. Story on Agency, par.

201.

(n) Grant v. Norway (1851), at p 10 C. B. 687; Sickens v. Irving (1859), 7 C. B., N.S. 165; Burgon v. Sharpe (1810), 2 Camp. 529. For a case when a charter was so varied, see Hall v. Brown (1814), 2 Dow, 367, 375; and, for express authority in a charter to so vary, see Wiggins v. Johnston (1845), 14 M. & W. 609.

(0) The captain has authority to settle accounts to be paid for freight and demurrage in foreign parts, and to take bills of exchange for the amount, so as

36

PART-OWNER, PURCHASER, AND MORTGAGEE.

Article 17.-Who are bound by Charters.

(a.) Part-owner of Shares in Ship.

Any part-owner of a ship may object to its employment in any particular way, though such employment is under a charter made by a managing owner appointed by himself. In such a case that part-owner will neither share the profits, nor be liable for the losses, of such voyage, but will be entitled, in an action of restraint, to a bond from his coowners to secure the value of his share in the ship, before she will be allowed to sail on the chartered adventure (p). In such a case the co-owners who do not dissent divide the profits and losses in proportion to their shares (q).

(b.) Purchaser.

The purchaser or assignee of a ship under charter, or of any share therein, is bound by the charter in existence, but not for losses in charters which have expired (r).

(c.) Mortgagor or Mortgagee (s).

A mortgagor in possession has by statute (t) the powers of an ordinary owner, except that he must not materially

to bind the shipowner and a purchaser of the ship: Alexander v. Dowie (1857), 1 H. & N. 152. The Scotch Courts have held that he has no authority to abandon a claim for demurrage, though he may give the charterers additional lay-days in return for their giving up the option of loading at two additional ports. Holman v. Peruvian Nitrate Co. (1878), 5 Sc. Sess. C., 4th Ser., p. 657.

(p) The England (1886), 12 P. D. 32; The Talca (1880), L. R. 5 P. D. 169. See also Ouston v. Hebden (1745), 1 Wils. 101; Haly v. Goodson (1816), 2 Mer. 77. As to the liabilities of securities on such a bond, see The Vivienne (1887), 12 P. D. 185. As to position of co-owners inter se, see Bennett v. McLellan (1891), 18 Sc. Sess. C., 4th Ser. 955.

(a) The Vindobala (1887), 13 P. D. 42.

(r) The Vindobala, supra; The Meredith (1885), L. R. 10 P. D. 69; Messageries Co. v. Baines (1863), 7 L. T. 763. See The Bonnie Kate (1887), 57 L. T. 203, as to when part ownership begins.

(s) Under the mortgage of a ship, there pass articles necessary for the navigation of the ship or the prosecution of the adventure which are on board at the date of the mortgage, or replace similar articles then on board. Coltman v. Chamberlain (1890), 25 Q. B. D. 328: semble, articles subsequently added, to which there was nothing corresponding on board at the date of the mortgage, do not pass unless they become part of the ship. As to mortgages of ships, to procure funds to work them, see The Thames (1890), 63 L. T. 353.

(t) 17 & 18 Vict. c. 104, s. 70. "A mortgagee shall not by reason of his mort

impair the value of the mortgagee's security. The mortgagee out of possession is therefore bound by any charter which does not impair his security (u), and the burden of proving that a charter is of such a nature is on him (v).

He cannot object to a charter on the ground that its performance will involve the ship's leaving the jurisdiction, and so render the exercise of his rights more difficult (v); nor to an assignment of freight by the mortgagor as gross freight, the expenses of the voyage not being paid out of it (w); nor to a charter making freight payable to a third party (x)

A mortgagee of shares out of possession cannot maintain an action of restraint. (Semble, that he can if in possession (y).) A mortgagee out of possession cannot take possession if no sum is due to him under the mortgage, and nothing is done by the mortgagor to impair the security (z).

Article 18.-Position of Shipper of Goods on a Chartered

Ship.

Where the ship carrying the goods in respect of which a bill of lading is given is under charter, the position

gage be deemed to be the owner of a ship or of any share thereof, nor shall the mortgagor be deemed to have ceased to be owner of such mortgaged ship or share, except in so far as may be necessary for making such ship available as a security for the mortgage debt."

(u) Keith v. Burrows (1877). L. R. 2 App. C. 636; Collins v. Lamport (1864), 34 L. J., N.S. Ch. 196; The Funchon (1880), L. R. 5 P. D. 173; De Mattos v. Gibson (1858), 4 De G. & J. 276; The Maxima (1878), 39 L. T. 112; Cory v. Stewart (1886), Times, L. R. II. 508; The Keroula (1886), 11 P. D. 92; Laming v. Seater (1889), 16 Sc. Sess. C., 4th Ser., 828.

() The Fanchon, vide supra. On the relations of mortgagees of shares, and owners of other shares, see The Orchis (1890), 15 P. D. 38.

(w) The Edmond (1860), Lush. 57.

(x) Cory v. Stewart (1886), vide supra. It is doubtful what dealings of the mortgagor will impair the mortgagee's security, i.c., a freight-earning ship. Lord Esher, in Cory v. Stewart, vide supra, goes so far as to suggest that, if the mortgagee considers the charter onerous, he should not enter into possession; but see The InnisFallen (1865). L. R. 1 Adm. 72; The Keroula (1886), L. R. 11 P. D. 92. In Laming v. Seater, v. s., it was held that, when the mortgagor had contracted to insure the ship, the mortgagee was entitled to prevent her going to sea unin-ured.

(4) The Innisfallen (1866), L. R. 1 A. & E. 72; The Keroula (1886), 11 P. D. 92.

(z) The Blanche (1887), 58 L. T. 592; The Cathcart (1867), L. R. 1 A. & E. at p. 329.

of the holder of the bill of lading will vary according as he is :

(a.) Both shipper and charterer.

(b.) Shipper other than the charterer ;—

(1) Ignorant of the charter.

(2) Knowing of the charter.

(c.) An indorsee from the shipper ;

(1) Ignorant of the charter.

(2) Knowing of the charter.

It may also vary according to the powers conferred, by charter or otherwise, on the master or broker signing the bill of lading (a).

(a.) Where the Shipper is also the Charterer.

Where the charterer is himself the shipper, and receives as such shipper a bill of lading in terms differing from the charter, the proper construction of the two documents taken together is that, primâ facie and in the absence of any intention to the contrary, as between the shipowner and the charterer, the bill of lading, although inconsistent with certain parts of the charter, is to be taken only as an acknowledgment of the receipt of the goods (b).

If the holder of the bill of lading is merely an agent or factor of the charterer, he is in the same position as the charterer (c). So also if the charterer takes a bill of lading in his own name, but as agent for a third person, such third person is in the same position as the charterer (d).

The fact that the bill of lading does not contain all the

(a) See Article 20.

(b) Kodocanaci v. Milburn (1886), 18 Q. B. D. 67; per Lord Esher at p. 75; Lindley, L.J., at p. 78; cf. Leduc v. Ward (1888), 20 Q. B. D. at p. 479; Wagstaff v. Anderson (1880), L. R. 5 C. P. D. at p. 177, pr Lord Bramwell; "To say that the bill of lading is a contract, superseding, adding to or varying the former contract, is a proposition to which I can never consent: repeated less decidedly in Sewell v. Burdick (1884), 10 App. C. at p. 105.

(c) Kern v. Deslandes (1861), 10 C. B., N. S. 205; Gledstanes v. Allen (1852), 12 C. B. 202; Small v. Moates (1833), 9 Bing. 574.

(d) De Laurier v. Wyllie (1889), 17 Sc. Sess. C., 4th Ser. 167.