4. Liabilities of Mortgagee.—
These depend upon his possession of the ship. Where he takes possession and operates the ship for his own benefit, he assumes all the responsibilities of ownership but without the right to limit his liability to the value of his interest in the ship. Thus he may become personally liable for wages, supplies and repairs as well as for damages done by negligence. He may, by special arrangements, confine contract liabilities to the ship and, being lawfully in possession, he may create maritime liens upon her. A mortgagee out of possession is not considered as the owner even when he holds the record title under a bill of sale absolute on its face. He may still show that his title was by way of security only and so exempt himself from personal liability for repairs done or supplies furnished for the contracts or negligence of the mortgagor or other person having real ownership of the boat.