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International Films Ltd. (China) vs Lyric Film II.

Exchange (1936)
WON defendant company is responsible to the plaintiff
[Villa-Real] for the destruction by fire of the film – NO.
Summary and Doctrine:
The preponderance of evidence shows that the verbal
I. FACTS: agreement had between Bernard Gabelman, the
former agent of the plaintiff company, and Vicente
Bernard Gabelman was the Philippine agent of Albo, chief of the film department of the defendant
International Films Ltd. (China). By virtue of a power of company, was that the said film "Monte Carlo
attorney, Bernard leased the film entitled “Monte Carlo Madness" would remain deposited in the safety vault
Madness” to defendant company, Lyric Film Exchange of the defendant company under the responsibility of
from June 1 to June 22, 1993on different theatres, for said former agent and that the defendant company,
a price certain on some, and 30% commission on some as his subagent, could show it in its theaters, the
days. One of the conditions was that the defendant plaintiff company receiving 5 per cent of the receipts up
company would answer for the loss of the film to a certain amount, and 15 per cent thereof in excess
whichever the cause. of said amount.
On June 23, the Chief of the film department of the The fact that the film was not insured against fire does
defendant company, Vicente Albo, called Bernard not constitute fraud or negligence on the part of the
Gabelman and asked him when and how he wanted defendant company, the Lyric Film Exchange, Inc.,
the film to be returned. Gabelman went to Albo’s office because as a subagent, it received no instruction to
and asked the latter whether he could deposit the film that effect from its principal and the insurance of
in the defendant company’s vault as the plaintiff the film does not form a part of the obligation
company did not yet have a safety vault. After the case imposed upon it by law. The “Monte Carlo Madness”
had been referred to O’Malley, Albo’s Chief, the former is not covered by the insurance policy of the defendant
answered that the deposit cannot be made since it company, as known even from the first transaction of
cannot be covered by insurance. Gabelman then O’Malley and Gabelman, where the latter took
requested to permit the deposit under Gabelman’s responsibility in case of destruction or loss. It cannot
responsibility. There was a verbal contract between be shown, then, that the defendant company was
Gabelman and Albo, whereby the film would be shown enriched by the destruction by fire, serving no liability.
elsewhere and O’Mally agreed to store it in the vault
under Gabelman’s responsibility. IV. DISPOSITIVE:

On July 1933, Gabelman severed his connection with WHEREFORE, appealed judgment is affirmed, with
the plaintiff company, and he was succeeded by costs to the appellant.
Lazarus Joseph. The former informed Joseph about its
arrangement with defendant company as its subagent.
As soon as Lazarus Joseph took the Philippine agency,
he went to the office of Albo and asked for the return of
the film and 2 other films. The other films were returned
except for Monte Carlo Madness because it was to be
shown in Cebu on August 29 and 30. Lazarus agreed.
It happened, however, that the Bodega of the
defendant company was burned on August 19 together
with the film.