Kinds of Obligations: Reciprocal

Ernesto Deiparine, Jr. vs. The Hon. Court of Appeals, Cesario Carungay and Engr. Nicanor
Trinidad
G.R. No. 96643, 23 April 1993

Facts:
 Respondent Carungay entered to a construction contract with the contractor petitioner
Deiparine for the construction of a three-storey dormitory in Cebu City.
 The respondent agreed to pay P970,000 inclusive of contractor’s fee, and the petitioner
bound himself to erect the said building “in strict accordance to plans and
specifications”. The Plan specified that the building must have 3,000 psi (pounds per
square inch) as the acceptable minimum compressive strength.
 Through Engr. Trinidad, it came to the knowledge of the respondents that the petitioner is
not following the plans and that the “construction works are faulty and haphazardly” in
order to maximize his personal profit.
 The respondent sent memorandums to the petitioner complaining about the work done by
the latter, but the same were ignored.
 The respondent asked for a core testing to examine the compressive strength of the
building, to which the result was against the petitioner since the building failed to bear the
minimum 3,000 psi compressive strength.
 The respondent moved to rescind the contract.
 RTC ruled in the favor of the respondents and CA affirmed.
Issue: Whether Carungay is entitled to rescission
Held: Yes
Ruling:
There is also a right of rescission under the law on obligations as granted in Article 1191,
providing as follows: Art. 1191. The power to rescind obligations is implied in reciprocal ones, in
case one of the obligors should not comply with what is incumbent upon him. xxx

The violation of reciprocity between Deiparine and the Carungay spouses, to wit, the
breach caused by Deiparine’s failure to follow the stipulated plans and specifications, has given
the Carungay spouses the right to rescind or cancel the contract.

The contention of the petitioner that the specification was not included in their contract is
untenable. The explicit deviance to the specifications, in his initial refusal to undergo core testing,
and his preference to his personal profit than that of the proper execution of the contract, shows
bad faith. The court sees no reason to disturb the ruling of CA that Deiparine did not deal with the
Carungays in good faith. His breach if this duty constituted a substantial violation of the contract
correctible by judicial rescission. When the structure failed under this test, the respondents
were left with no other recourse than to rescind their contract.

*There can be rescission if the injured party is left without other recourse but to rescind the contract