GR 33079; (December, 1978) (Digest)
G.R. No. L-33079 December 11, 1978
PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, petitioner, vs. HON. WALFRIDO DE LOS ANGELES, as Judge of the Court of First Instance of Rizal, Branch IV, Quezon City, and EASTERN VIGAN VTPA, INC., et al., respondents.
FACTS
The case arose from a fire that destroyed the redrying plant of the Philippine Virginia Tobacco Administration (PVTA) in Agoo, La Union, in 1963. Private respondents, various tobacco trading entities, had delivered tobacco shipments to the Central Cooperative Exchange, Inc. (CCE), the authorized agent of PVTA, at the plant. These shipments were subsequently burned. The respondents sued PVTA and CCE for payment of the value of their tobacco deliveries. The lower court ruled in favor of the private respondents, holding PVTA liable. PVTA appealed, arguing that the tobacco had not been legally delivered or sold to it at the time of the fire, as the required grading and weighing to determine the final price had not yet been completed.
ISSUE
The decisive legal issue is whether a contract of sale between the tobacco planters (respondents) and the PVTA had been perfected at the time the tobacco was burned, thereby determining who bore the risk of loss.
RULING
The Supreme Court affirmed the lower court’s decision, holding PVTA liable. The Court applied the principles of a perfected contract of sale under the Civil Code. A sale is perfected at the moment there is a meeting of minds upon the object and the price. The Court found that such a meeting of minds had occurred. The respondents, as recognized trading entities, delivered the tobacco to PVTA’s agent, CCE, pursuant to a government price support program and existing management contracts and circulars. The price was determinable and based on government-fixed support prices plus specified expenses. The act of delivery to the redrying plant, coupled with the prior agreement on the pricing mechanism, perfected the sale. The subsequent grading and weighing were merely ministerial acts to ascertain the exact computation of the already-agreed price, not conditions for the perfection of the contract. Consequently, the risk of loss had passed to the buyer, PVTA, upon delivery to its agent. The Court rejected PVTA’s argument that its liability only began after grading and weighing, as this would unjustly allow it to avoid loss for goods already in its possession and control through its agent. Therefore, PVTA was obligated to pay the respondents for the value of the burned tobacco.