Del Monte Philippines, Inc.

vs Aragones
G.R. No. 153033, June 23, 2005
Carpio-Morales, J.
 
Facts: This case hinges on whether the contract denominated “Supply Agreement” is one for
sale or for a piece of work.
 
Del Monte is the owner of a warehouse. It sought MEGA-WAFF as its contractor to install
concrete blocks on the pavement around its warehouse. MEGA-WAFF thereafter entered into a
“Supply Agreement” with supplier Dynablocks to provide the machines for the fabrication of the
S-shaped concrete blocks.
 
When the installation was complete, Dynablock’s representative, Aragones, demanded from
MEGA-WAFF the payment, but he failed to collect. Since at that time, Del Monte has not paid
MEGA-WAFF for the installation, Aragones asked Del Monte that instead of paying MEGA-
WAFF, Del Monte should pay him to satisfy MEGA-WAFF’s obligation to Dynablock. Del Monte,
however, paid MEGA-WAFF after Aragones failed to secure a court order to direct Del Monte to
withhold payment.
 
Aragones filed a complaint and impleaded Del Monte on the strength of Articles 1729 and 1467
of the Civil Code, contending that Del Monte was liable to him, who put labor upon or furnished
materials for a piece of work. Del Monte contends that the nature of the “Supply Agreement”
was not one for a piece of work, so Dynablock does not have a cause of action against it under
Article 1729.
 
Issue No. 1: Is the nature of the “Supply Agreement” that for a piece of work?
 
Ruling: Yes, the "Supply Agreement" is replete with specifications, terms or conditions showing
that it was one for a piece of work. Under Art. 1467 of the Civil Code:
 
“A contract for the delivery at a certain price of an article which the vendor in the
ordinary course of his business manufactures or procures for the general market,
whether the same is on hand at the time or not, is a contract of sale, but if the
goods are to be manufactured specially for the customer and upon his special
order, and not for the general market, it is a contract for a piece of work.”
 
The machines Aragones was obliged to fabricate were those for casting the concrete blocks
specified by MEGA-WAFF. Aragones did not have those kinds of machines in his usual
business, hence, the special order.
 
In accordance with the "Supply Agreement," MEGA-WAFF furnished the cement and
aggregates for the fabrication of the blocks and Aragones provided three (3) machines for S
shaped blocks which were delivered at the casting site on different dates. And the "entire
plant/casting machines and . . . . accessories" were, as dictated under the "Supply Agreement,"
devoted by Aragones "for MEGA-WAFF’s exclusive use.

 
Issue No. 2: Does Aragones have a cause of action against Del Monte?
 
Ruling: Yes. Under Article 1729 of the Civil Code:
 
“Those who put their labor upon or furnish materials for a piece of work
undertaken by the contractor have an action against the owner up to the amount
owing from the latter to the contractor at the time the claim is made.”
 
The “Supply Agreement” being that for a piece of work, Aragones has a cause of action upon
Del Monte up to the amount it owed MEGA-WAFF at the time Aragones made his claim to Del
Monte.