Agency Danica M.

International Films v. Lyric Film (1936)

Villa-real, J.

Topic: Responsibility for act of substitutes

Petitioner: INTERNATIONAL FILMS (CHINA), LTD

Respondent: THE LYRIC FILM EXCHANGE, INC

Synopsis:
International Films appointed this guy Bernard Gabelman as its agent in the Philippines through a power of attorney.
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 for whatever cause. The chief of the firm department of the Lyrics Film, telephoned the said agent (Gabelman)
informing that the showing of said film had already finished and asked at the same time, where he wished to have the film
returned to him. Gabelman went to Albo’s and asked whether he could deposit the film in question in the vault of the
defendant as the plaintiff did not have a safety vault yet. Albo declined the offer but Gabelman insisted. Thereafter, the
bodega of Lyric Film Exchange was burned, including the film, which was NOT insured.

SC held that Lyric Film cannot be held liable because 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. The fact that the film was not insured
against fire does not constitute fraud or negligence on the part of Lyric because as sub-agent, it received no instruction to
that effect from its principal and the insurance does not form a part of the obligation.

Doctrine: A mere submandatary or sub-agent is NOT obliged to fulfill more than the contents of the mandate, and is also NOT
required to answer for damages caused to the principal (Art. 1718 NCC).

FACTS: The chief of International Films, O’Malley, answered

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 for whatever cause.
After the last showing of the said film, Vicente Albo,
Chief of the film department of The Lyric Film
Exchange, called Gabelman and inquired where he
wished to have the film returned to him, and
Gabelman replied that he wished to see him
personally in Albo’s office. When 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.
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 Gabelman’s own responsibility. As
there was a verbal contract between Gabelman and
Lyric Film Exchange whereby the film would be shown
elsewhere, O’Malley agreed, and the film was
deposited in Lyric Film Exchange’s vault under
Gabelman’s responsibility.
Gabelman was then succeeded by Lazarus Joseph as
agent of International Films. Joseph was informed
of the said deposit and about the verbal contract
entered into between Gabelman and Lyric Film
Exchange, whereby The 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. Joseph asked for the
return of the three films, including Monte Carlo

Madness, but the said film could not be returned
because it was to be shown in Cebu. Thereafter, the
bodega of Lyric Film Exchange was burned, including
the film, which was NOT insured.
ISSUE-HELD:
W/N Lyric Film Exchange is liable to International
Films for the destruction of the film by fire: [NO]
RATIO:
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.
The preponderance of evidence shows that the verbal
agreement had between Gabelman (the former agent
of the International Films) and 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
Agency Danica M.
the responsibility of said former agent, and that the
defendant company, as his subagent, could show it in
its theaters.
Since verbal contract between Gabelman and Albo
was a sub-agency or a submandate, the defendant
company is NOT civilly liable for the destruction by fire
of the film in question.
As a mere subagent, it was NOT obliged to fulfill more
than the contents of the mandate nor to answer for
the damages caused to the principal by his failure to
do so.
The fact that the film was not insured against fire
does not constitute fraud or negligence on the part
of 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.