G.R. No. L-27952 - Testate Estate of Ramirez vs. Vda. de Ramirez

The defendant entered into a contract with one E. Merritt during the latter part of 1913.
Under the contract, Merritt undertook and agreed to construct a costly edifice in Manila at the corner of Calle Rosario and Plaza del Padre Moraga.
The contract contained a stipulation that allowed the defendant, upon certain contingencies and before the completion of the edifice, to take possession of the building under construction along with all the materials acquired by Merritt.

In August 1914, the plaintiffs delivered to Merritt, at the scene of the construction, certain materials valued at P1,381.21, as detailed in an attached exhibit (Exhibit A).
It was alleged that Merritt had agreed to pay for these materials on September 1, 1914.

On August 28, 1914, under the contract with Merritt, the defendant took possession of the incomplete building along with all materials present on the premises, including those delivered by the plaintiffs.
Although payment for the materials was demanded by the plaintiffs, neither Merritt nor the defendant rendered payment.

On September 2, 1914, the plaintiffs demanded of the defendant the return or the permission to enter the premises to retrieve the unused materials, which the defendant refused.
The complaint alleged, in paragraph 6, that Merritt acted as the agent of the defendant in procuring the materials from the plaintiffs.

The appellants argued that the facts admitted meant that Merritt acted as the defendant's agent in purchasing the materials.
Alternatively, they contended that if the defendant took over the construction and later completed the edifice based on the plans and permits provided, it effectively became the successor or assignee of the first builder, thereby inheriting the contractual obligation to pay for the materials.
The appellee contrasted this by contending that by the terms of the building contract, Merritt was an independent contractor, and thus he alone bore the liability for the purchase of such materials.

It was emphasized that in a demurrer, only material and relevant facts well pleaded are admitted as true.
The allegation that Merritt acted as the defendant's agent was viewed as a mere conclusion rather than a fact, since a demurrer does not admit inferences or conclusions drawn from the pleaded facts.
References were made to established rules on the construction of pleadings, including section 106 of the Code of Civil Procedure and pertinent cases such as Alzua and Arnalot vs. Johnson, as well as Stevens vs. Ross.

Whether the facts alleged in the complaint sufficiently demonstrated that Merritt acted as the agent of the defendant in the purchase of the construction materials.
Whether the defendant’s act of taking possession of the incomplete edifice and the materials amounted to ratification of the contract between Merritt and the plaintiffs.

Whether the inference that Merritt acted in an agency capacity could be sustained as a factual matter given that a demurrer only admits material and relevant facts as pleaded and not the conclusions drawn therefrom.

If the defendant was considered the assignee or successor in completing the building, whether this status would render it liable for the materials purchased by Merritt on credit.