G.R. No. L-29766 November 29, 1968
PERMANENT CONCRETE PRODUCTS, INC., plaintiff-appellee, vs. DONATO TEODORO, defendant-appellant, CLEMENTINA VDA. DE GUISON, defendant-appellee.

FACTS

The defendant-appellee, Clementina Vda. de Guison, hired the contractor “Teodoro & Associates” to construct a building for a lump sum of P44,000. The written contract explicitly stated that “all of said labor and materials shall be supplied by me” (the contractor). During construction, the contractor ordered and received hollow blocks from the plaintiff-appellee, Permanent Concrete Products, Inc., valued at P759.88, which were used in the building. The contractor refused to pay, claiming Guison was obligated to pay. The plaintiff sued both Donato Teodoro and Guison for collection. The City Court of Manila rendered judgment in favor of the plaintiff against Guison. Guison appealed to the Court of First Instance (CFI). At the pre-trial conference before the CFI, the parties agreed to limit the issues to three specific questions of law, none of which pertained to Donato Teodoro’s personal participation or liability. No evidence was presented; the case was submitted on memoranda. The CFI then rendered judgment ordering Donato Teodoro (the appellant) to pay the plaintiff. Teodoro appealed, arguing (1) there was no evidence of his participation in the transactions, and (2) even if he participated, Guison, as the building owner, should be liable.

ISSUE

1. Whether the defendant-appellant, Donato Teodoro, can be held liable for the cost of the hollow blocks despite his claim of no participation, given the delimitation of issues during pre-trial.
2. Whether the building owner, Clementina Vda. de Guison, is liable for the cost of materials supplied to the contractor and used in her building, under a lump sum contract where the contractor expressly agreed to supply all materials.

RULING

1. Yes, Donato Teodoro can be held liable. The Supreme Court held that the appellant waived the issue of his non-participation by failing to raise it during the pre-trial conference where the parties agreed to limit the issues to three specific questions of law. The delimitation of issues at pre-trial bars consideration of other questions on appeal. The purpose of pre-trial is to prevent surprise and maneuvering, and parties are expected to disclose all issues they intend to raise. The appellant’s belated raising of this defense on appeal was contrary to pre-trial procedure. Furthermore, the appeal from the city court to the CFI resulted in a trial de novo, vacating the prior proceedings. Circumstances also negated Teodoro’s claim: his address was identical to “Teodoro & Associates”; he was served summons at that same address and represented by the same counsel; and his cross-claim against Guison implied his involvement in the transactions.
2. No, the building owner, Clementina Vda. de Guison, is not liable. The Supreme Court held that under the lump sum contract, the contractor expressly assumed the obligation to supply all labor and materials. Therefore, the contractor was legally obliged to pay for the materials. The owner’s benefit from the installed materials did not constitute unjust enrichment at the supplier’s expense, as she complied with her covenant to pay the lump sum to the contractor. The liability for the cost of materials furnished rests on the contractor who ordered them.
The judgment of the Court of First Instance ordering Donato Teodoro to pay the plaintiff was affirmed.