Century Iron Works v. Far Eastern University

Summary

Century Iron Works, Inc. (CIWI) sued Far Eastern University (FEU) and others for unpaid construction work totaling P1,861,267.00 under Article 1729 of the Civil Code. CIWI was subcontracted by L & M Maxco for FEU's construction project and performed additional work through change orders but was not fully paid. The RTC and CA dismissed the case, ruling no contractual relationship existed and CIWI failed to prove FEU owed money to the contractor. The Supreme Court partially granted the petition, reinstating the case against FEU. The Court clarified that Article 1729 creates direct liability on the project owner to suppliers up to amounts owing to the contractor, with the burden on the owner to prove full payment. The case was remanded to determine FEU's exact liability amount.