San Miguel Foods v. Ernesto Raoul V. Magtuto

Summary

This case involved a contractual dispute between San Miguel Foods, Inc. and broiler chick grower Ernesto Magtuto over an oral agreement for chick growing services. Despite the absence of a written contract, the Supreme Court affirmed that a valid contract existed through implied ratification, as evidenced by SMFI's repeated delivery of chicks, feeds, and medicines over nine months, plus payment of grower's fees. However, the Court characterized the arrangement as a 'per grow basis' contract, limiting SMFI's liability to the shortage of 4,000 chicks in the final delivery (P38,383.58 plus 6% annual interest). The decision clarifies that contracts can be binding regardless of form when essential elements are present, and that corporate ratification can occur through conduct even without formal authorization.