International Films (China) v Lyric Film Exchange

No. 42465; 19 November 1936; Villa-Real, J.

Digest by Joyce
FACTS:
1. Bernard Gabelman was the Philippine agent of International Films. International Films, through
Gabelman, leased the film Monte Carlo Madness to The Lyric Film Exchange to be shown in
different places. One of the conditions of the contract was that The Lyric Film Exchange would
answer for the loss of the film in question whatever the cause
2. After the last showing of the said film, Vicente Albo, the Chief of the film department of The
Lyric Film Exchange, called Gabelman and inquired where he wished to have the film returned
to him. Gabelman replied that he wished to see Albo personally in the latters office.
3. When they were in the said office, Gabelman asked whether he could deposit the said film in
the vault of The Lyric Film Exchange, because International Films did not yet have a safety
vault as required by the regulations of the fire department.
4. The chief of International Films, OMalley, said that the deposit could not be made because
the film would not be covered by the insurance of Lyric Film Exchange. Gabelman then
requested Albo to permit him to deposit said film in the vault of Lyric Film Exchange, under
Gabelmans own responsibility. As there was a verbal contract between Gabelman and Lyric
Film Exchange, whereby the film would be shown elsewhere, OMalley agreed and the film
was deposited in Lyric Film Exchanges vault under Gabelmans responsibility
5. Gabelman was then succeeded by Lazarus Joseph as agent of International Films. Joseph was
informed of the said deposit. He was also informed about the verbal contract entered into
between Gabelman and Lyric Film Exchange, whereby Lyric Film Exchange would act as a
subagent of International Films with authority to show the said film in any theater where Lyric
Film Exchange might wish to show it
6. Joseph asked for the return of the three films, including Monte Carlo Madness, but the said
film could notbe returned because it was to be shown in Cebu. Thereafter, the bodega of Lyric
Film Exchange wasburned, including the film, which was not insured.
ISSUE:
WON Lyric Film Exchange is liable to International Films for the destruction of the film by fire.
NO
HELD:
NO. Lyric Film Exchange, as subagent of the International Films in the exhibition of the film
"Monte Carlo Madness", was not obliged to insure it against fire, not having received any express
mandate to that effect, and it is not liable for the accidental destruction thereof by fire
RATIO
1. The preponderance of evidence shows that the verbal agreement had between Bernard
Gabelman, the former agent of the International Films, and Vicente Albo, chief of the film
department of the Lyric Film Exchange, was that said film "Monte Carlo Madness" would
remain deposited in the safety vault of the defendant company under the responsibility of
said former agent and that the defendant company, as his subagent, could show it in its
theaters.
2. Such verbal agreement was a sub-agency or a submandate. The defendant company is not
civilly liable for the destruction by fire of the film in question because as a mere
submandatary or subagent, it was not obliged to fulfill more than the contents of the mandate
and to answer for the damages caused to the principal by his failure to do so.
3. The fact that the film was not insured against fire does not constitute fraud or negligence on
the part of the defendant company, the Lyric Film Exchange, Inc., because as a subagent, it
received no instruction to that effect from its principal and the insurance of the film does not
form a part of the obligation imposed upon it by law.