Lloyd's Maritime and Commercial Law Quarterly
CAVEAT VENDOR
The Maule
1
In her Comment on The Maule, Alison Clarke discusses the power of sale of a mortgagee of a ship and points out that a mortgagee (as mortgagee) only has the capacity to transfer a legal title to a buyer if that title has already been transferred to the mortgagee by the mortgage or if that power has been conferred by statute.2 In English law a registered ship mortgage is not a title transfer mortgage and a mortgagee can therefore only sell the ship and transfer title to the buyer under its statutory power of sale. The Merchant Shipping Act 1894, s. 35 conferred an unrestricted power3 of sale in the following terms:
Every registered mortgagee shall have power absolutely to dispose of the ship or share in respect of which he is registered …
However, the power of sale conferred by the Merchant Shipping Act 1995, Sched. 1, para. 9.1, is a restricted power in the following terms:
… every registered mortgagee shall have the power, if the mortgage money or any part of it is due, to sell the ship or share in respect of which he is registered …
1. Banque Worms v. Owners of the ship Maule and Compania Sud Americana Vapores SA (The Maule) [ 1997] 1 W.L.R. 528; [1997] 1 Lloyd’s Rep. 419 (P.C.: H.K.).
2. “Mortgagees’ Power of Sale: Contract or Statute?” [1997] LMCLQ 329, 335.
3. There is no restriction in the Merchant Shipping Act 1894, although the court would intervene to prevent a mortgagee exercising its power of sale if there had been no default. See The Blanche (1887) 6 Asp. M.L.C. 272 and also the cases cited in The Manor [1907] P. 339.
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