NGA v. IAC
NGA v. IAC
FACTS:
National Grains Authority (now National Food Authority, NFA for short) is a govt agency created under PD
No. 4 which has an incidental function of buying palay grains from qualified farmers.
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, namely:
Farmer's Information Sheet accomplished by Soriano and certified by a Bureau of Agricultural
Extension (BAEX) technician, Napoleon Callangan;
Xerox copies of 4 tax declarations of the riceland leased to him and copies of the lease contract
between him and Judge Concepcion Salud; and
his Residence Tax Certificate
Soriano's documents were processed and accordingly, he was given a quota of 2,640 cavans of palay. The
quota represented the maximum number of cavans of palay that Soriano may sell to the NFA.
Soriano delivered 630 cavans of palay. The palay were not rebagged, classified and weighed.
When Soriano demanded payment, 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 tide 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.
On August 28, 1979, Cabal wrote Soriano advising him 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 (Callangan) that Soriano is not a bona fide farmer.
Instead of withdrawing the 630 cavans of palay, Soriano insisted that payment. He then filed a complaint
for specific performance and/or collection of money with damages on November 2, 1979, against the NFA
and Mr. Cabal, Provincial Manager of NFA with the CFI of Tuguegarao.
Meanwhile, by agreement of the parties and upon order of the trial court, the 630 cavans of palay in
question were withdrawn from the warehouse of NFA.
the 630 cavans of palay delivered by Soriano on August 23, 1979 was made only for purposes of
having it offered for sale
rebagging is the initial operative act signifying acceptance, and acceptance will be considered
complete only after the preparation of the Warehouse Stock Receipt (WSR). When the 630 cavans
of palay were brought by Soriano to the Carig warehouse of NFA they were only offered for sale.
Since the same were NOT rebagged, classified and weighed in accordance with the palay
procurement program of NFA, there was NO acceptance of the offer which, to petitioners' mind is
a clear case of solicitation or an unaccepted offer to sell.
FEBLE SANTIAGO
SALES
ISSUE: WON there was a contract of sale
SC:
There was a contract of sale. The requisites of a contract and of a sale are fully met.
In the case at bar, Soriano initially offered to sell palay grains produced in his farmland to NFA. When the
latter accepted the offer by noting in Soriano's Farmer's Information Sheet a quota of 2,640 cavans, there
was already a meeting of the 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 that the exact number of cavans of palay to be delivered has
not been determined does NOT affect the perfection of the contract (see Art. 1349).
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 to be sold. Soriano can deliver so much of his produce as long as it does not
exceed 2,640 cavans.
The acceptance referred to which determines consent is the acceptance of the offer of one party by the
other and not of the goods delivered as contended by petitioners.
The reason why NFA initially refused acceptance of the 630 cavans of palay delivered by Soriano is that it
(NFA) cannot legally accept the said delivery because Soriano is allegedly not a bona fide farmer. The trial
court and the appellate court found that Soriano was a bona fide farmer and therefore, he was qualified to
sell palay grains to NFA.
FEBLE SANTIAGO