46 USC 31323 – Disclosing and incurring obligations before executing preferred mortgages
(a) On request of the mortgagee and before executing a preferred mortgage, the mortgagor shall disclose in writing to the mortgagee the existence of any obligation known to the mortgagor on the vessel to be mortgaged.
Terms Used In 46 USC 31323
- Contract: A legal written agreement that becomes binding when signed.
- Conviction: A judgement of guilt against a criminal defendant.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- vessel: includes every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water. See 1 USC 3
- writing: includes printing and typewriting and reproductions of visual symbols by photographing, multigraphing, mimeographing, manifolding, or otherwise. See 1 USC 1
(b) After executing a preferred mortgage and before the mortgagee has had a reasonable time to file the mortgage, the mortgagor may not incur, without the consent of the mortgagee, any contractual obligation establishing a lien on the vessel except a lien for—
(1) wages of a stevedore when employed directly by a person listed in section 31341 of this title;
(2) wages for the crew of the vessel;
(3) general average; or
(4) salvage, including contract salvage.
(c) On conviction of a mortgagor under section 31330(a)(1)(A) or (B) of this title for violating this section, the mortgage indebtedness, at the option of the mortgagee, is payable immediately.