Case Digest (G.R. No. 239092)
Facts:
In Deiparine v. Court of Appeals, spouses Cesario and Teresita Carungay contracted with Ernesto Deiparine, Jr. on August 13, 1982, for the construction of a three‐story dormitory in Cebu City at a price of ₱970,000.00, inclusive of the contractor’s fee. Civil Engineer Nicanor Trinidad, Jr. was appointed as the Carungays’ representative with power to inspect and coordinate. Deiparine commenced work on September 1, 1982. On November 6, 1982, Trinidad issued *General Conditions and Specifications* stipulating a minimum compressive strength of 3,000 psi. Thereafter, Trinidad and Cesario Carungay issued memoranda warning that Deiparine’s crew deviated from the approved plans and engaged in lax supervision. After repeated warnings went unheeded, the parties agreed to conduct structural tests. Cylinder tests performed on twenty‐four samples all failed under the 3,000 psi standard. Core tests conducted by Geo‐Testing International on the existing structure likewise revealed widespread dCase Digest (G.R. No. 239092)
Facts:
- Contract formation and parties
- On August 13, 1982, spouses Cesario and Teresita Carungay (the “Carungays”) entered into a written agreement with Ernesto Deiparine, Jr. to construct a three‐story dormitory in Cebu City for a total price of ₱970,000, inclusive of contractor’s fee.
- Nicanor Trinidad, Jr., a civil engineer, was designated as the Carungays’ authorized representative, with power to inspect works and coordinate with the contractor.
- Construction, deviations, and specifications
- Work commenced on September 1, 1982. On November 6, 1982, Trinidad furnished the “General Conditions and Specifications,” prescribing a minimum compressive strength of 3,000 psi for the concrete.
- Trinidad reported that Deiparine deviated from the plans and specifications, prompting Carungay memoranda ordering prior approval for pouring cement and complaining of lax supervision and unqualified staff; Deiparine ignored these instructions.
- Testing and lower court proceedings
- The parties agreed to conduct strength tests: cylinder tests (for Deiparine’s account unless failure exceeded 10%) and, subsequently, core tests (for the Carungays’ account if specimens passed). Twenty‐four core samples all failed the 3,000 psi standard.
- The Carungays filed for rescission of the contract and damages before the Regional Trial Court (RTC) of Cebu. Deiparine moved to dismiss for lack of jurisdiction under P.D. 1746; the RTC denied the motion, rescinded the contract, awarded forfeiture of expenses (₱244,253.70), reimbursement of testing costs (₱15,104.33), demolition and site restoration, attorney’s fees (₱10,000), and costs. The Court of Appeals affirmed.
Issues:
- Jurisdiction
- Whether the RTC had jurisdiction to hear and decide disputes arising from a private construction contract in light of Presidential Decree No. 1746 (creating the Construction Industry Authority of the Philippines and the Philippine Domestic Construction Board).
- Rescission and applicable law
- Whether judicial rescission of the construction agreement was proper, and which Civil Code provisions (Articles 1191, 1385, 1725) govern the right to rescind.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)