Ernesto Deiparine, Jr. v. The Hon. Court of Appeals

Summary

This case involved the rescission of a construction contract between the Carungay spouses and contractor Ernesto Deiparine, Jr. for a three-story dormitory in Cebu City. The Supreme Court affirmed the lower courts' decisions rescinding the contract due to structural defects revealed through core testing, where all 24 samples failed to meet the required 3,000 psi compressive strength standard. The Court rejected Deiparine's jurisdictional challenge, ruling that the Philippine Domestic Construction Board only has authority over public construction contracts, while private construction disputes remain under regular court jurisdiction. Applying Article 1191 of the Civil Code, the Court found Deiparine breached his contractual obligations by deviating from plans and specifications, using unqualified personnel, and acting in bad faith. The decision emphasized the principles of good faith and reciprocity in contractual relationships, ordering contract rescission, forfeiture of expenses, reimbursement for testing costs, and demolition of the defective structure.