G.R. No. 42465 ; November 19, 1936
INTERNATIONAL FILMS (CHINA), LTD., plaintiff-appellant, vs. THE LYRIC FILM EXCHANGE, INC., defendant-appellee.

FACTS

The plaintiff, International Films (China), Ltd., through its agent Bernard Gabelman, leased the film “Monte Carlo Madness” to the defendant, Lyric Film Exchange, Inc., under a contract requiring the defendant to answer for the loss of the film. After the final showing, Gabelman, lacking a safety vault, requested to deposit the film in the defendant’s vault. The defendant initially refused because the film was not covered by its insurance, but agreed after Gabelman assumed full responsibility. A subsequent verbal agreement was made for the defendant to act as a subagent to exhibit the film further. When a new agent, Lazarus Joseph, took over, the defendant returned other films but kept “Monte Carlo Madness” for a scheduled showing in Cebu. Before that showing, the defendant’s bodega burned down, destroying the uninsured film.

ISSUE

1. Whether the trial court erred in allowing the defendant to amend its answer after both parties had rested.
2. Whether the defendant, as a subagent, is liable for the loss of the film by fire.

RULING

1. No. The trial court acted within its discretionary power. Amendments to pleadings are liberally allowed to serve justice, and the court’s discretion will not be disturbed absent evident abuse.
2. No. The defendant, as a subagent or submandatary, was only obliged to fulfill the mandate given. There was no express instruction to insure the film, and its loss by fire was accidental, not due to fraud or negligence. The defendant also did not unjustly enrich itself from the insurance proceeds, as the film was not included in its policy. Therefore, the defendant is not liable for the loss.
The appealed judgment dismissing the complaint is affirmed.

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