Deiparine vs CA 221 SCRA 503 1993)

FACTS
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Spouses Carungay entered into an agreement with Deiparine for the construction of a 3-storey dormitory.
The Carungays agreed to pay Php970K, and Deiparine bound himself to erect the building in strict
accordance to the plans and specifications.
In the General Conditions and Specifications document, the minimum acceptable compressive strength of
the building was set at 3,000 psi (pounds per square inch).
However, the Carungays found out that Deiparine was deviating from the plans and specifications, thus
impairing the strength and safety of the building.
The spouses even issued a memorandum complaining that the construction works were faulty and done
haphazardly mainly due to lax supervision coupled with inexperienced and unqualified staff. The
memorandum was ignored.
After several conferences, the parties agreed to conduct cylinder tests to ascertain compliance with safety
standards.
Carungay suggested core testing (a more reliable test of safety and strength), and although Deiparine was
relunctant at first, he agreed to it and even promised that should the structure fail the test, he would
shoulder the test expenses.
The core test was conducted, and the building was found to be structurally defective.
The spouses then filed in the RTC for rescission of the construction contract and for damages. Deiparine
alleged that RTC did not have jurisdiction for construction contracts are now cognizable by the Philippine
Construction Development Board.
RTC declared the contract rescinded, Deiparine to have forfeited his expenses in the construction, and
ordered Deiparine to reimburse the spouses for the core testing and restore the premises to their former
condition before the construction began.
CA affirmed RTC.

ISSUES
1. WON RTC had jurisdiction over the case
2. WON rescission is the proper remedy
HELD
1. Yes. Firstly, there is no Philippine Construction Development Board in existence. There is however, a Philippine
Domestic Construction Board (PDCB), but this body has jurisdiction to settle claims and disputes in the
implementation of PUBLIC construction contracts (only), and thus does not have jurisdiction over private construction
contracts. (Deiparines counsel is even held in contempt of court for changing the wording of the relevant provision in
the law, making it appear that the PDCB had jurisdiction over the instant case.)
2. Yes. The facts show that Deiparine deliberately deviated from the specifications of the Carungays (changing the
minimum strength, concrete mixture, etc.), possibly to avoid additional expenses so as to avoid reduction in profits.
His breach of duty constituted a substantial violation of the contract, which is correctible by judicial rescission.
Particularly for reciprocal obligations, Art.1191 CC provides that: The power to rewind obligations is implied in
reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.
- The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should
become impossible.
Decision affirmed