G.R. No. 74470. March 8, 1989.
NATIONAL GRAINS AUTHORITY (now National Food Authority) and WILLIAM CABAL, petitioners, vs. THE INTERMEDIATE APPELLATE COURT and LEON SORIANO, respondents.

FACTS

Petitioner National Grains Authority (NFA) is a government agency tasked with buying palay from qualified farmers. On August 23, 1979, private respondent Leon Soriano submitted the required documents, including a certified Farmer’s Information Sheet, to pre-qualify as a seller. After processing, the NFA, through its Provincial Manager William Cabal, granted Soriano a quota of 2,640 cavans of palay that he could sell. Relying on this, Soriano delivered 630 cavans of palay to the NFA warehouse on August 23 and 24, 1979.
The NFA, however, refused payment and acceptance of the delivery. Cabal informed Soriano that payment was withheld due to an investigation prompted by information that Soriano was not a bona fide farmer and that the palay came from a trader’s warehouse. On August 28, 1979, Cabal formally advised Soriano to withdraw the palay, citing a subsequent certification from a BAEX technician that Soriano was not a bona fide farmer. Soriano refused to withdraw the palay and instead filed a complaint for specific performance and/or collection of money with damages against the NFA and Cabal.

ISSUE

Whether a perfected contract of sale existed between Soriano and the NFA, obligating the NFA to accept the delivered palay and pay the agreed price.

RULING

Yes, a perfected contract of sale existed. The Supreme Court affirmed the decisions of the lower courts, holding that the contract was perfected upon the meeting of minds between the parties. Consent was manifested when Soriano offered to sell palay from his farmland and the NFA, after evaluating his submitted documents, granted him a specific sales quota. This quota represented the maximum quantity Soriano could sell, establishing the object and the basis for determining the quantity. The contract was consensual and perfected at the moment of mutual agreement on the object (palay produced from Soriano’s land) and the price (to be determined based on quality), even prior to actual delivery. Article 1475 of the Civil Code governs, stating that a sale is perfected at the moment there is a meeting of minds upon the object and the price.
The Court rejected the NFA’s contention that there was no consent due to a lack of “acceptance” of the delivered goods. The acceptance vital for consent refers to the acceptance of the offer, not the physical goods. The NFA’s subsequent refusal to accept the delivery, based on a belated challenge to Soriano’s status as a bona fide farmer, was a breach of the already perfected contract. The trial and appellate courts’ factual findings, which were supported by the record, established that Soriano was indeed a qualified farmer and the NFA’s refusal was without just cause. Consequently, the NFA was ordered to pay Soriano the price of the 630 cavans of palay plus legal interest.