G.R. No. L-10918; March 4, 1916
WILLIAM FRESSEL, ET AL., plaintiffs-appellants, vs. MARIANO UY CHACO SONS & COMPANY, defendant-appellee.

FACTS:
Plaintiffs-appellants William Fressel, et al., sold construction materials valued at P1,381.21 to E. Merritt, who had contracted with defendant-appellee Mariano Uy Chaco Sons & Company to build an edifice in Manila. The contract between Merritt and the defendant allowed the defendant, upon certain contingencies, to take possession of the unfinished building and all materials on the premises. In August 1914, the defendant exercised this right and took possession of the building and materials, including those supplied by the plaintiffs. Merritt failed to pay for the materials, and the plaintiffs’ demand for payment or return of the unused materials from the defendant was refused. The plaintiffs filed a complaint alleging, among other things, that Merritt acted as the agent of the defendant in acquiring the materials. The defendant demurred on the ground that the complaint failed to state a cause of action. The trial court sustained the demurrer and dismissed the case after the plaintiffs declined to amend.

ISSUE:
Whether the complaint states a cause of action against the defendant, either on the theory that Merritt was the defendant’s agent in purchasing the materials or that the defendant, by taking over the building and materials, became a successor/assignee liable for the debt.

RULING:
No. The Supreme Court affirmed the judgment dismissing the complaint. The Court held that the factual allegations in the complaint, apart from the conclusory statement in paragraph 6, demonstrated that Merritt was an independent contractor, not an agent of the defendant. The contract showed Merritt undertook to build the edifice according to his own methods, free from the defendant’s control except as to the result. He purchased materials on his own credit. A demurrer does not admit conclusions of law or inferences drawn from facts; it only admits well-pleaded material and relevant facts. The allegation that Merritt acted as an “agent” was a mere conclusion contradicted by the other facts alleged.

Furthermore, the defendant’s act of taking possession of the unfinished work and materials under the contract did not transform it into an assignee or successor liable for the contractor’s debts to materialmen. In the absence of a statute creating mechanics’ liens, the owner of a building is not liable for materials purchased by an independent contractor. To hold otherwise would unjustly compel an owner to pay whatever price the contractor and seller agreed upon.

The Court affirmed the dismissal of the complaint, with costs against the appellants.