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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Upon the agreement and order of the court, the cavans of play were withdrawn and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.