G.R. No. 194785 ; July 11, 2012
VIRGILIO S. DAVID, Petitioner, vs. MISAMIS OCCIDENTAL II ELECTRIC COOPERATIVE, INC., Respondent.

FACTS

Petitioner Virgilio S. David, proprietor of VSD Electric Sales, agreed to supply respondent Misamis Occidental II Electric Cooperative, Inc. (MOELCI) with a 10 MVA power transformer. MOELCI’s General Manager, Engr. Reynaldo Rada, presented a board resolution authorizing the purchase. David presented his standard proposal detailing the price, terms, and conditions, which Engr. Rada and a director signed with “conforme.” The proposal stipulated a price of P5,200,000.00, with 50% downpayment and the balance upon delivery. As MOELCI’s loan from the National Electrification Administration (NEA) was pending, Engr. Rada later requested delivery without the downpayment. David agreed, conditioning it on a 24% per annum interest, to which Engr. Rada acquiesced. The transformer was shipped in December 1992.
MOELCI subsequently failed to pay. David’s manager discovered that the goods had been released from the shipping line to MOELCI, as evidenced by a stamped “Released” bill of lading and a receipt for arrastre charges. Despite repeated demands, MOELCI refused payment, leading David to file a complaint for specific performance and damages. MOELCI defended itself by arguing no binding contract was perfected, or alternatively, that any agreement was unenforceable under the Statute of Frauds. The Regional Trial Court (RTC) dismissed the complaint, finding that while a contract of sale was perfected, David failed to prove delivery and receipt. The Court of Appeals (CA) affirmed this decision.

ISSUE

Whether a valid and enforceable contract of sale was perfected between the parties and whether MOELCI is liable for the purchase price.

RULING

Yes. The Supreme Court reversed the CA and RTC decisions. A contract of sale was perfected upon the meeting of the minds on the object (the transformer) and the price, as evidenced by the signed proposal and the accompanying board resolution. The signatures with “conforme” constituted MOELCI’s consent to the essential terms. The Court clarified that a contract is perfected by mere consent, and delivery is not required for perfection but for consummation. The subsequent actions, including the shipment at MOELCI’s request and the conditional agreement on interest, merely modified the payment terms but did not negate the existence of the perfected contract.
Regarding delivery, the Court held that David sufficiently established that MOELCI received the transformer. The “Released” stamp on the bill of lading and the cargo delivery receipt, which MOELCI failed to rebut, constituted prima facie evidence of delivery. MOELCI’s failure to present contrary evidence during trial, despite opportunities, led to an adverse presumption. Consequently, MOELCI’s obligation to pay the purchase price, plus the stipulated 12% per annum interest (as the legal rate at the time) from the filing of the complaint, became due. The Court awarded David the principal sum of P5,472,722.27.