Under the same act jurisdiction of all suits to foreclose a preferred mortgage is vested exclusively in the District Courts of the United States. Authority is also given to bring suit in personam in the admiralty, in the United States District Courts, against the mortgagor.
The surrender of the documents of mortgaged vessels without the approval of the Shipping Board is prohibited, and the Board is directed to withhold such approval unless the mortgagee consents to the surrender. By resolution of the Board this law is interpreted as not applying to cases in which owners merely renew licenses or change documents incident to change of trade and where the ownership remains the same.
Elaborate provisions are also to be found covering the formal procedure in case of sales of mortgaged vessels, together with a provision that no rights under a mortgage shall be assigned to any person not a citizen of the United States without the approval of the Board, and that no vessel shall be sold in a suit in the admiralty to any person who is not a citizen.
The legality of the provisions conferring upon the federal courts the right to enforce mortgage liens which are of a nonmaritime character, is much debated and must await final decision by the Supreme Court. If the court should decide against the legality of these provisions serious and difficult questions will be presented as to whether the act as it now stands will be effective to give preferred status to such a mortgage, under the radically different procedure which must then be resorted to.
The act also revises the law on the subject of the creation of maritime liens for necessaries. It provides that persons furnishing repairs, supplies, towage, etc., on order of the owner or an authorized agent shall have a maritime lien on the vessel without being required to prove the credit was given to the vessel; defines the persons who are to be presumed to have authority from the owner to procure repairs, etc., including the agents of a charterer; and permits the waiving of such liens by those furnishing the supplies or services, subject to certain existing specified rules of law.
IV. Change of Name
The American law has always been very strict in regard to changing the names of vessels. Such change can only be made by the Commissioner of Navigation, and if made by the master or owner or agent of the vessel subjects the vessel to forfeiture. Since 1881 the Secretary of the Treasury, and later, the Commissioner of Navigation, has been authorized to permit the change of names of vessels "duly enrolled and found seaworthy and free from debt." Under this law it became necessary to secure a special act of Congress, which was frequently done, to change the name of a mortgaged vessel. To cure this defect the law of February 19, 1920, which took effect thirty days after its passage, provides for a change of name by the Commissioner of Navigation upon compliance with regulations issued by him.
All that is required in the first instance is a duplicate application by the owner, addressed to the Commissioner of Navigation and forwarded to him through the Collector of Customs at the home port of the vessel, which is required to state the change desired, the reasons in support of it, place of build, official number, rig, gross tonnage, and the owner's name. It must also include a detailed list of liens of record from all custom houses where the vessel has been previously documented, together with the consent in writing of the mortgagee or other beneficiary under each lien to the change desired. To this the Collector of Customs, forwarding the application, must add his certificate as to liens on record in his office, and must also state the date and place of last inspection, a requirement which presupposes the presentation to him of satisfactory evidence of the vessel's inspection, that is, either the original certificate, or a certified copy of it, or a statement from the office of the Commissioner of Navigation at Washington that such a certificate is outstanding. In the case of vessels not usually inspected, as, for instance, barges, inspectors are authorized to make special examinations at the owner's expense and to furnish a certificate of the seaworthiness of the vessel, the object of course being to prevent old and unseaworthy vessels from concealing their condition and antiquity by a change of name.
After the application has been passed by the Commissioner and permission has been granted, it is required that the change shall be published in a daily or weekly paper nearest to the port of documentation in at least four consecutive issues, the cost of procuring the evidence and of publication to be paid by the applicant. The permission for change is not effective until this fee is paid. Upon its payment the issuance of a new document is then required, which presupposes the production, as in other cases, of the owner's affidavit, and of the master's affidavit, as already explained.
The Collector thereupon records the change of name in his prescribed reports and the transaction is completed.