A contract for a piece of work
Engineering & machinery corp VS CA and Almeda
FACTS: The petitioner and the private respondent, Almeda, executed a contract wherein the
former undertook to fabricate, furnish, and install the airconditioning system in the respondent’s
building. The system was completed in 1963, one year after the execution of the contract. The
said building where the system was installed was sold on September 2, 1965. The buyer took
possession of the building but was later returned to the respondent in 1971 because of the buyer’s
noncompliance with the terms and conditions of the deed of sale. It is only during this time that
the respondent learned the defects of the airconditioning. The respondent commissioned a certain
Engineer to render a technical evaluation of the system, and the latter’s report shows the defects
of the system and concludes that it was “not capable of maintaining the desired room
temperature of 76̊°F - 2̊°F.” The respondent then filed an action for damages against the
petitioner. The petitioner moved to dismiss the complaint alleging that the prescriptive period of
6 months has lapsed. The private respondent for their part alleged that the contract executed was
not a contract of sale but a contract for a piece of work; hence, the complaint was brought within
the ten-year prescriptive period. The court denied the motion to dismiss. In its answer, the
petitioner reiterated its claim of prescription as an affirmative defense. Thereafter, the private
respondent filed an ex-parte motion for preliminary attachment on the strength of the petitioner’s
own statement that it had sold its business and is no longer doing business in Manila. The trial
court rendered a decision finding that the petitioner failed to install certain parts and accessories
as specified in the contract and furthered that the complaint was filed within the ten-year court
prescriptive period. The petitioner appealed to the Court of Appeals, which in turn affirmed the
decision of the trial court. Hence, the present petition.
ISSUE(S): Is the contract for the fabrication and installation of a central air-conditioning system in a
building, one of "sale" or "for a piece of work"?
RULING: The contract is one that is for a piece of work.
According the Art. 1713 of the Civil Code, in a contract for a piece of work, the contractor binds
himself to execute a piece of work for the employer in consideration of a certain price or
compensation and that he may either employ only his labor or skill or also furnish the material.
Moreover, the contract for a piece of work may be distinguished from the one of sale by the
inquiry as to whether the thing transferred is one not in existence and which would never have
existed but for the order of the person desiring it.
In the case at hand, the court finds that it is not the petitioner’s line of business to manufacture
air-condition systems to be sold “off-the-shelf.” The petitioner’s business and particular
expertise are in the fabrication and installation of systems customized to the needs of the
customer and designed to a particular plan and specification required by the latter.
And as stated by the court, and in correlation with the said law(art. 1713), it can be inferred that
the contract is not of sale but a contract for a piece of work.
Art 1715 is the governing law on breach p165
Warranty : 1561 1566 page 166
Court distinguished both contracts: A contract for a piece of work, labor and materials may be
distinguished from a contract of sale by the inquiry as to whether the thing transferred is one not
in existence and which would never existed but for the order of the person desiring it.
On the other hand, if the thing subject of the contract would have existed and been the subject of
the sale to some other person if the order had not been given, then the contract is one of sale.
