G.R. No.

74470 March 8, 1989

NATIONAL GRAINS AUTHORITY and WILLLAM CABAL, petitioners
vs.
THE INTERMEDIATE APPELLATE COURT and LEON
SORIANO, respondents.

FACTS:
Petitioner, National Grains Authority (now the NFA), is a government agency
created under Presidential Decree No. 4. One of the its incidental functions is
the buying of palay grains from disqualified famers.

On August 23, 1979, private respondent Leon Soriano offered to sell palay
grains to the NFA, through William Cabal, the Provincial Manager of NFA
stationed at Tuguegarao, Cagayan. He submitted the documents required by
the NFA for pre-qualifying as a seller. Then, private respondent’s documents
were processed accordingly; he was given a quota of 2 640 cavans of palay.
The quota noted in the Farmer’s Information Sheet represented the maximum
number of cavans of palay that Soriano may sell to the NFA.

Soriano delivered 630 cavans of palay. The palay delivered were not
rebagged, classified and weighed. When Soriano demanded payment of 630
cavans of palay, he was informed that its payment will be held in abeyance
since Mr. Cabal was still investigating on an information he received that
Soriano was not a bona fide farmer and the palay delivered by him was not
produced from his farmland but was taken from the warehouse of a rice
trader, Ben de Guzman. Then, private respondent was asked to withdraw
from the NFA Warehouse the 630 cavans Soriano delivered, stating that NFA
cannot legally accept the said delivery on the basis of the subsequent
certification of the BAEX technician, Napoleon Callangan, that Soriano is not a
bona fide farmer.

Despite the advised to withdraw the cavans of palay, private respondent

insisted that the palay grains delivered be paid. Then, he filed a complaint for
specific performance and collection of money with damages against NFA and
Mr. Cabal before the Court of First Instance of Tugeugarao.

Upon the agreement and order of the court, the cavans of play were
withdrawn and an inventory was made by the sheriff as representative of the
court, representative of Soriano, and a representative of NFA.

The Court of First Instance of Cagayan rendered judgment in favor of private

respondent and ordered the NFA to pay the amount of Php 47 250
representing the unpaid price of the 630 cavans of palay plus legal interest.
The lower court’s decision was then affirmed by the Intermediate Appellate
Court.

ISSUE:
Is there a contract of sale between the parties?

HELD:
Yes. Article 1458 of the Civil Code of the Philippines defines sale as a
contract whereby one of the contracting parties obligates himself to transfer
the ownership of and to deliver a determinate thing, and the other party to pay
the price certain in money or its equivalent. A contract, on the other, is a
meeting of minds between two persons whereby one binds himself, with
respect to the other, to give something or to render some service. The
essential requisites of contracts are: 1. consent of the contracting parties, 2.
Object certain which is the subject matter of the contract, and 3. cause of the
obligation which is established. In the present case, private respondent initially
offered to sell palay grains produced in his farmland to NFA. When the latter
accepted the offer noting in Soriano’s Farmer’s Information Sheet a quota of 2
640 cavans of palay, there was already meeting of minds between the parties.
The object of the contract, being the palay grains produced in Soriano’s
farmland and the NFA was to pay the same depending upon its quality. The
fact the exact number is not determinate shall not be an obstacle to the
existence of the contract – Provided it is possible to determine the same,
without the need of a new contract between the parties. In this case, there
was no need for NFA and Soriano to enter into a new contract to determine
the exact number of cavans of palay sold. Soriano can deliver so much of his
produce as long as it does not exceed 2 640 cavans.