Deiparine vs.

CA and Trinidad
GR. No. 96643, April 23, 1993

FACTS:

Spouses Carungay entered into a contract with Deiparine for the construction of a 3-story dormitory in
Cebu. Carungay agreed to pay Php970,000 inclusive of contractor’s fee, and Deiparine bound himself
to erect the building “in strict accordance to plans and specifications.” Trinidad, a civil engineer, was
designated as Carungays’ representative, with powers of inspection and coordination with the
contractor.

Trinidad reported to Carungay that Deiparine had been deviating from the plans and specifications,
thus impairing the strength and safety of the building. Carungay ordered Deiparine to first secure
approval from him before pouring cement. This order was not heeded, prompting Carungay to send
Deiparine another memorandum complaining that the construction works are faulty and done
haphazardly mainly due to lax supervision coupled with inexperienced and unqualified staff.

Carungay then filed a complaint for the rescission of the construction contract for damages.

ISSUE:

Whether or not the rescission of contract is valid due to breach.

RULING:

Yes. Article 1385 states that rescission creates the obligation to return the things which were the object
of the contract, together with the fruits, and the price with its interest; consequently, it can be carried
out only when he who demands rescission can return whatever he may be obliged to restore.

The construction contract falls squarely under Article 1191 because it imposes upon Deiparine the
obligation to build the structure and upon the Carungays the obligation to pay for the project upon its
completion. Article 1191 is not predicated on economic prejudice to one of the parties but on breach
of faith by one of them that violated the reciprocity between them. The violation of reciprocity between
Deiparine and 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.