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July 12, 1966

BLANCHARD LUMBER COMPANY and Furman Lumber, Inc., Libellants,
S.S. ANTHONY II, her engines, boilers, etc., and Mardoro Cia. Nav. S.A., and Anglo Canadian Shipping Company, Limited, Respondents

The opinion of the court was delivered by: LEVET


 LEVET, District Judge.

 In this suit, the libellants, Blanchard Lumber Company (hereinafter "Blanchard") and Furman Lumber Inc. (hereinafter "Furman"), consignees and owners of certain shipments of lumber bound from British Columbia to Providence, Rhode Island, sue for non-delivery and certain damage to such cargo. The respondents are Mardoro Cia. Nav. S.A. (hereinafter "Mardoro"), the owner of the S. S. Anthony II (hereinafter "Anthony II"), and Anglo Canadian Shipping Company, Limited (hereinafter "Anglo Canadian"), the charterer of the said vessel.

 After hearing the testimony of the parties, examining the exhibits, the pleadings, the briefs and Proposed Findings of Fact and Conclusions of Law submitted by counsel, and after examining the memoranda submitted Amici Curiae, this court makes the following Findings of Fact and Conclusions of Law:


 1. Macmillan, Bloedel and Powell River, Ltd. (hereinafter "Macmillan"), a Canadian corporation doing business at Vancouver, British Columbia, was the shipper of all cargoes of lumber involved in this action, and libellants Blanchard and Furman were the consignees and owners of the cargoes of lumber involved. The lumber was shipped under the terms of bills of lading P-2 to P-10, dated October 11, 1962, Victoria, British Columbia/Providence, Rhode Island. (Lib.Exs. 1-8) Respondent Mardoro is a corporation organized and existing under and by virtue of the laws of the Republic of Panama, and at the times hereinafter mentioned was the registered owner of the Anthony II. Respondent Anglo Canadian is a Canadian corporation with its principal place of business at Vancouver, British Columbia, and at the time in question was the time charterer of the Anthony II, pursuant to the terms of a time charter party dated September 17, 1962 with respondent Mardoro. (Pre-Trial Order 3(a)(2); Mardoro Ex. B)

 2. The charter party, dated September 17, 1962, is between Mardoro as owners of the Anthony II and Anglo Canadian as charterers. *fn1" The owners agreed to let and the said charterers agreed to hire the said vessel from the time of delivery for a voyage from British Columbia via the Panama Canal to the United States north of Cape Hatteras. *fn2"

 The vessel was to be placed at the disposal of the charterers at British Columbia with a full complement of officers and crew and was to be employed in carrying lawful merchandise as the charterers or their agents should direct on certain conditions, among others as follows:

1. *fn3" The owners were to provide and pay for all provisions, wages of the crew, and insurance.
2. The charterers were to pay for fuel and fumigation necessitated by their use of the vessel, and were in addition to provide necessary dunnage and shifting boards, extra fittings requisite for unusual cargo, but the owners were to allow them the use of any dunnage and shifting boards already aboard.
4. Payment for hire was to be based on $1.50 per ton on vessel's total deadweight carrying capacity per calendar month.
7. The whole reach of the vessel's hold, decks, etc. were to be at the charterers' disposal.
"8. That the Captain shall prosecute his voyages with the utmost despatch, and shall render all customary assistance with ship's crew and boats. The Captain (although appointed by the Owners) shall be under the orders and directions of the Charterers as regards employment and agency; and Charterers are to load, stow, trim and discharge the cargo at their expense under the supervision of the Captain and the responsibility of the Captain who is to sign Bills of Lading for cargo as presented, in conformity with Mate's or Tally Clerk's receipts." *fn4"
9. If the charterers were dissatisfied with the conduct of the Captain or officers, the owners would investigate upon receiving particulars, and if necessary, make a change in the appointments.
"11. That the Charterers shall furnish the Captain from time to time with all requisite instructions and sailing directions, in writing, and the Captain shall keep a full and correct Log of the voyage or voyages * * *."
18. The owners were to have a lien upon all cargoes and all sub-freights for any amounts due under the charter.
"22. Owners shall maintain the gear of the ship as fitted, providing gear (for all derricks) capable of handling lifts up to five tons weight at each hatch in single rig, also providing ropes, falls, slings, and blocks. Equipment and gear for heavier lifts shall be for Charterers' account * * *."
23. The vessel was to work night and day if required by the charterers.
"26. Nothing herein stated is to be construed as a demise of the vessel to the Time Charterers. The Owners to remain responsible for the navigation of the vessel, insurance, crew, and cargo claims and all other matters, same as when trading for their own account."
29. The owners were to stow shiftingboards away so as not to interfere with cargo operations.
"40. Charterers are to pay for the cost of lashing the deck cargo but it is understood that the vessel is to be equipped with pad eyes or other suitable means of securing chain lashings and any expense in this connection is to be borne by the Owners."

 3. Anthony II was a vessel which was built in Hamburg, Germany in 1957 with six cargo hatches, three hatches forward of the mid-ship house and three hatches aft the mid-ship house, and which vessel at the time in question was under the command of Captain Michael Kyrtatas, a Greek citizen.

 4. On September 18, 1962, respondent Anglo Canadian, in the City of Vancouver, British Columbia, entered into a freight arrangement with Macmillan for the reservation of space for the account of Macmillan in the Anthony II for the carriage of cargo of packaged lumber from British Columbia to ports in the Port Everglades/Boston, United States of America range by shipment carried on deck. (364-365; Anglo Canadian Ex.L)

 5. Before September 28, 1962, the Anthony II arrived at Chemainus, British Columbia, for delivery under the time charter above mentioned. At this time the Master of the Anthony II, Captain Michael Kyrtatas, signed a letter of authority addressed to Anglo Canadian authorizing thirteen named individuals to sign bills of lading on his behalf covering the cargo loaded in the Anthony II according to Mate's receipts as signed by the chief officer and/or the final official Pacific Lumber Inspection Bureau certificates or mill certificates. (Anglo Canadian Exs. A, E; 284)

 6. The bills of lading issued to libellants recite that certain goods were received from Macmillan for carriage to Providence, Rhode Island, listing certain packages of lumber, all to be shipped on deck. These bills of lading were prepared and issued by Anglo Canadian pursuant to written authorization of the Master. (284-285, 398; Anglo Canadian Ex. E) They bear the heading:


 Clause 6 of the bills of lading reads in part as follows:

"* * * Live animals or cargo carried on deck and stated in this bill of lading to be so carried shall be carried only at Merchant's risk."

 The bills of lading also contain the "Paramount Clause," which is as follows:

"The Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels the 25th August, 1924, as enacted in the country of shipment shall apply to this contract. When no such enactment is in force in the country of shipment, the corresponding legislation of the country of destination shall apply, but in respect of shipments to which no such enactments are compulsorily applicable, the terms of the said Convention (save for Article IX of the said Rules) shall apply.
"With respect to goods loaded at a Canadian port, the Water Carriage of Goods Act, 1936, of the Dominion of Canada shall be effective. With respect to goods loaded at a United States port, the Carriage of Goods by Sea Act of the United States, approved April 16, 1936, shall be effective.
"If any term of this Bill of Lading be repugnant to the said Rules or enactments to any extent, such term shall be void to that extent, but no further."

 In addition, the bills of lading contain the following clause:

"13. Nature of Contract
"The Contract evidenced by this Bill of Lading is between the Merchant and the Owner of the vessel named herein (or substitute) and it is therefore agreed that said Shipowner only shall be liable for any loss, damage, or delay due to any breach or non-performance of any obligation arising out of the contract of carriage, whether or not relating to the vessel's seaworthiness. If, despite the foregoing, it is adjudged that any other is the Carrier and/or bailee of the goods shipped hereunder, all limitations of, and exonerations from, liability provided for by law or by this Bill of Lading shall be available to such other.
"It is further understood and agreed that as the Line, Company or Agents who has executed this Bill of Lading for and on behalf of the Master is not a principal in the transaction, said Line, Company or Agents shall not be under any liability arising out of the contract of carriage, nor as Carrier nor bailee of the goods."

 This clause is commonly referred to as the "demise" clause.

 The bills of lading conclude:

 "IN WITNESS whereof the Master of the said Vessel has signed THREE/3 Bills of Lading all of this tenor and date, one of which being ...

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