refer to the credit account out of which it is to be paid. The time for presentation shall (regularly) be five days. A person giving a cheque, though he knew, or with reasonable diligence should have known, that at the time the requisite amount was not standing to his credit, shall be liable to a penalty not exceeding one thousand marks.1 The same penalty shall be incurred by a person giving a cheque on which he has wilfully omitted to state, or mis-stated, the date of drawing.2

Merits of Defining the Law.-In conclusion, I venture to submit that the definiteness with which the Russian Draft Code, as well as the German Bill, differentiates a cheque will serve a useful purpose and be better calculated to assist, not only the theory, but also the practice, civil and criminal, of cheque law. The treatment of a cheque as a qualified bill of exchange seems to me a legislative mistake in so far as it is opposed to the true economical nature of the two kinds of instruments, one of which is pre-eminently intended as a medium of credit, the other as a medium of payment.

1 1 The penalty shall not be inflicted if during the time allowed for presentation cover is provided.

2 The latter provision purposes to guard against evading the provisions relating to the time for presentation.

THE OWNERSHIP OF MERCHANT VESSELS.

[Contributed by EDWARD LOUIS DE HART, ESQ.]

British Law Policy of the Law. The policy of the law of this country as to the conditions under which ships could obtain registry under the British flag was directed, until the middle of the nineteenth century, to three objects: (1) To ensure that British ships should be wholly owned by British subjects;

(2) To protect the native shipbuilding trade by excluding foreign-built ships, generally speaking, from the right of registry under the British flag;

(3) to encourage native seamen and ensure a supply of sailors for the Navy, by requiring that the master and at least a large proportion of the crew of a British ship should be British subjects. The complete development of this policy is to be found in the Navigation and Registry Acts of 1845 (8 & 9 Vict., cc. 88, 89). Under these Acts. no ship was entitled to any of the privileges of a British ship unless registered and navigated according to law. No ship could be registered unless (1) wholly owned by British subjects; (2) wholly built in the United Kingdom or one of the British possessions, or, if foreign-built, condemned in a Court of Admiralty as prize of war or forfeited for a breach of the laws for the prevention of the slave trade. Further, no ship could. continue to enjoy the privileges of a British ship if repaired in a foreign country at an expense exceeding twenty shillings per ton, except in case of necessity caused by extraordinary damage. No British ship which had become prize to an enemy or had been sold to foreigners could, as a rule, again obtain the privileges of a British ship. The Navigation Act declared that every British registered ship should be navigated by a British master, and a crew of which at least three-fourths were British seamen or which, in the case of coasting vessels, consisted wholly of British seamen. The Navigation Act of 1849 (12 & 13 Vict., c. 29), however, abolished the disqualifications imposed on foreign-built ships, captured ships, or ships repaired abroad.

The Merchant Shipping Act, 1894.-The qualification for owning British. ships, or shares in British ships, is now defined in the Merchant Shipping

Act, 1894, re-enacting in substance s. 18 of the Merchant Shipping Act, 1854. S. 1 of the Act of 1894 provides that a ship shall not be deemed to be a British ship unless owned wholly by persons qualified to be owners of British ships. The persons so qualified must be

(a) Natural-born British subjects;

(b) Naturalised British subjects;

(c) Denizens ;

(d) "Bodies corporate established under, and subject to, the laws of some part of the British dominions, and having their principal place of business in those dominions."

The same section further provides that a natural-born British subject who has become a subject or citizen of a foreign State shall not be qualified to be the owner of a British ship, unless he has subsequently taken the oath of allegiance to the King and is, during the time he is owner of the ship, either resident in the British dominions or a partner in a firm actually carrying on business in the British dominions. Similarly a naturalised British subject or a denizen is not qualified to be the owner of a British ship, unless he has taken the oath of allegiance and is either resident in the British dominions or a partner in a firm carrying on business in the British dominions.

Registration. With the exception of certain small ships employed in the coasting or North American fishing trade, or in inland navigation, all British ships must be registered under the Act (ss. 2, 3). To ensure that no ships in which an alien in interested shall obtain the protection of the British flag, the Act provides that no person is entitled to be registered as owner of a British ship, or of a share in one, until he has made a declaration stating (inter alia) his qualification to own a British ship. In the case of a corporation a similar declaration must be made by an authorised agent, and it must state such circumstances of the constitution and business of the corporation as prove it to be qualified to own a British ship. The owner, or the agent of the corporation, must also declare that to the best of his knowledge and belief no unqualified person or body of persons is entitled as owner to any legal or beneficial interest in the ship or any share therein (s. 9).

Moreover, "if a person uses the British flag and assumes the British national character on board a ship owned in whole or in part by any persons not qualified to own a British ship, for the purpose of making the ship appear to be a British ship," the ship is subject to forfeiture, unless the assumption has been made to escape capture by an enemy or by a foreign ship of war in the exercise of some belligerent right (s. 69 [1]). Further, if an unqualified person acquires as owner, otherwise than by such trans

1 The German and Japanese Laws of 1899 have a similar provision; but the German Law, unlike the British and Japanese, makes no express exception in the case of ships seeking to avoid capture.

mission as is provided for in the Act (e.g., on the death or bankruptcy of the owner), "any interest, either legal or beneficial, in a ship using a British flag, and assuming the British character," his interest is subject to forfeiture1 (s. 71). Nor is an unqualified person who has acquired a British ship or a share therein in such a manner that it is not liable to forfeiture allowed to retain the property. He must within a limited time apply to the proper Court for an order for its sale, otherwise it is liable to forfeiture (ss. 27, 28).

Officers and Crew need not be British.-Unlike the law of some foreign countries, the British law has not since 1854 required that either the master or the officers or any portion of the crew of a British ship shall be British subjects. Under s. 94 of the Merchant Shipping Act, 1894, the Board of Trade may make rules for the qualification of applicants for a master's or mate's certificate, and the Board's existing regulations enable a foreigner, provided that he can speak and write English, to obtain a certificate on the same terms as a British subject.

Ownership by Corporations.-The question whether an alien can be a member of a British corporation which owns ships was raised nearly sixty years ago in Regina v. Arnaud (9 Q.B. 806; 16 L.J. Q.B. 50), the proceedings taking the shape of a mandamus to compel the custom-house officers to register a vessel, the property of a company incorporated by charter in which some of the shares were owned by foreigners. The Court of Queen's Bench held that the individual members of the corporation were in no legal sense the owners of the vessel. The legal owner of the ship, they said, was the corporation, and they could not notice any disqualification of an individual member which might disable him, if owner, from registering a vesssel in his own name. The Statute on which the question arose was 8 & 9 Vict., c. 89, which required that ships, in order to obtain a British register, should belong wholly to British subjects. This is the only decision as to the right of aliens to hold shares in British shipowning companies.

It may, perhaps, be argued that 8 & 9 Vict., c. 89, only prohibited an alien from being the legal owner of shares in a British vessel, and, therefore, that Regina v. Arnaud does not prove that the shareholders in a shipowning company are not the owners of a beneficial interest in its ships, within the meaning of the later Merchant Shipping Acts. In a popular sense, a shareholder may be said to be interested in the property of the company. There is, however, an overwhelming amount of authority to show that in no legal

Instead of "shall be subjected to forfeiture," the corresponding s. 103 of the Merchant Shipping Act, 1854, contained the words "shall be forfeited," and it is doubtful whether the decision in The Annandale (2 P.D. 179, 218) on the words in the earlier Act is applicable to those in the later one.

2 The latest Navigation Act which required that the master and a portion of the crew should be British subjects was 12 & 13 Vict., c. 29, which was repealed by 17 & 18 Vict.,

C. 120.

sense of the term has a shareholder any "interest" whatever in such property. His rights are simply the right to participate in the profits of the company when divided amongst its members, the right to attend and vote at the general meetings, and the right to a share of the surplus assets in the event of the company being wound up. Even when one shareholder practically owns all the shares in a company, it cannot now be maintained that the company is a trustee for him. Therefore, unless the term "owner of a beneficial interest can be shown to have a peculiar meaning in the Merchant Shipping Act, it follows that an alien is not disqualified from being a member of a corporation which owns British ships. There is nothing in the definition of a "beneficial interest" in s. 57, or in any of the provisions of the Act, which suggests such a disqualification.3

Unless this view of the law is erroneous, the result is a curious anomaly. The policy of the law, ever since the registry of ships was instituted, has been to restrict the right to own ships sailing under the British flag to British subjects. Yet a number of aliens can, by availing themselves of the provisions of the Companies Acts, gain this right which is withheld from them as individuals. This anomaly, however, does not exist only in English law. The theory that a company is an entity whose character does not depend on that of its individual members seems to have been pushed to the same extreme logical conclusion in the jurisprudence of other countries; and in nearly every State a company incorporated under its laws and carrying on business in its territory is in the same position as a subject or citizen. In Sweden, however, the law, to entitle a ship owned by a company to be Swedish, requires all the shareholders to be Swedish subjects.4

There is no express provision as to the validity of mortgages of British ships to foreigners. A mortgage is clearly a "beneficial interest" in a ship within the definition of that term in s. 57 of the Merchant Shipping Act, 1894 (see also s. 58). Is the mortgagee, then, the owner of a beneficial interest in the ship? The answer would no doubt be "Yes" but for the provision of s. 34 that, except as far as may be necessary for making a

1 See Myers v. Perigal, 2 De G. M. & G. 599; per Willes J. in Wilson v. Jones, L.R. 2 Ex. at p. 144, and in Bank of Hindustan v. Allison, L.R. 6 C.P. at p. 73; per James L. J. in Morrice v. Aylmer, L.R. 10 Ch. at p. 155; Ashworth v. Munn, 15 Ch.D. at pp. 363, 368, 375; per Cotton L.J. in Nanney v. Morgan, 37 Ch.D. at p. 352; Harburg Indiarubber Comb Company v. Martin [1902], 1 K.B. 788. In Driefontein Consolidated Gold Mines, Limited, v. Janson [1901], 2 K.B. at p. 427, the late Master of the Rolls apparently said that the beneficial ownership in the gold obtained from the plaintiff company's mines was in the shareholders, though his judgment is not based on this statement. 2 Salomon v. Salomon & Co. [1897], A.C. 22.

If a shareholder in a limited liability company were "beneficially interested" in its ships within the meaning of the Act, it would follow from s. 58 that he is directly subject to all pecuniary penalties imposed by any Act on the owners of ships or shares in ships.

♦ See post. Such a provision would, in this country, affect the right of British railway companies to own sea-going ships, as some shares in all of them no doubt belong to foreigners.