This is an appeal that seeks to determine whether a trader tax paid by the appellant

under oath was legally enforceable.

Plaintiff offered a price to Shaw Wallace & Co. of Calcutta for a certain
merchandize;
The latter accepted the offer;
Subsequently, plaintiff entered into a contract of sale with home buyers where the
former fixed a price higher than that agreed upon by the former with Calcutta;
After the contract was entered into, Calcutta instructed plaintiff to send the goods to,
and draw a draft on the home buyers.
The draft contains the price agreed between the plaintiff and home buyers, which was
drawn against the local bank in accordance with the letter of guarantee executed by
the plaintiff and the home buyers.
After receiving the draft and the shipping documents, the local bank released the
merchandise to the buyer by virtue of a trust receipt.
The draft was paid by the buyers to the bank, and the proceeds of the draft were
received by Calcutta.
Calcutta paid the plaintiff the difference between the price agreed upon between the
latter and plaintiff, and that price for which the merchandise was sold to the home
buyers.
The Court decided the case stating that the appellant in the above transactions should
be considered as a trader, in accordance with the provisions of Article 1459 of the
Revised Administrative Code, which provides:
. "SEC 1459. Percentage sales tax on merchants. - All merchants HEREIN Specifically
Exempted Shall not pay a tax of one per centum on the gross value of the commodities in
money, goods, wares, and merchandise sold, bartered, Exchanged, or consigned abroad
by them, Such tax to be based on the current selling price or value of the things in
question at the time They are disposed of or consigned, Whether Consisting of raw
materials or of manufactured or partially manufactured products, and Whether of
domestic or foreign origin. The tax upon things consigned abroad Shall be refunded upon
satisfactory proof of the return thereof to the Philippine Islands unsold.
"Merchants, as used here, means a person engaged in the sale, barter, or exchange of
personal property of whatever character. Except as specially provided, the term includes
manufacturers of articles Who Sell Their Own production, and commission merchants
Having establishments of Their own for the keeping and disposal of goods Of which sales
or exchanges are effected, but does not include merchandise brokers.
The appellant contends that the Court erred in failing to declare that she had bought
the goods of Shaw Wallace & Co. of Calcutta, India, and had sold to local buyers on
their own, and they acted as merchant transactions above and as such should pay tax.
The contention of the appellant is that she acted in such transactions as a trade
corridor.
ISSUE: In what capacity the appellant made the sales of the subject merchandise to local

buyers.
To address this question, we must consider not the legal relationship between the
appellant and local buyers but the relationships mediated between the appellant and
Shaw Wallace & Co. Of Calcutta, because transactions with that firm began and
ended the same.
The contention of the appellant is that she acted in such transactions as a broker.
HELD:
The broker never hires in name but in that of his client. In this case, Kerr &
Company entered into a contract of sale when it offered to buy certain goods at a
price that Shaw Wallace & Co. of Calcutta accepted.
Never mind that the goods have not passed into the possession of Kerr & Company
because the what is necessary is the consent given for the contract of sale to be
perfected being a consensual contract.
After the contract of sale, Kerr & Company, on its own behalf, agreed to sell to the
home buyers. Therefore, Kerr & Company, contracts with local merchants on its own
name independently, after the transaction with Shaw Wallace. Evidenced by the fact
that the former offers to the home buyers a price different from that it offered to
Shaw Wallace.
The broker executes the transaction with a third party on behalf of his client, based
on a fixed commission determined. In this case, Kerr & Company and Shaw Wallace
& Company at no time had set a commission which would effect the sale of goods to
local merchants.
Kerr & Company made after the sale of goods to local buyers for a higher price than
had been agreed with Shaw Wallace & Company, charging the difference to their
advantage, a difference that can not be conceptualized as a commission because he
amount charged depended solely from Kerr & Company, according to the price she
had set for it to goods sold.
A commission is a bit of money to be concluded between the broker and the client,
which is not true in this case because the price difference inures to the benefit of Kerr
solely to the exclusion of Shaw Wallace.
The broker does not guarantee payment of the goods it sells to a third party, because
it's only a mediator who deals in getting the concerned parties are understood in a
business or trade or business navigation issues.
In the present case, Kerr & Company guarantee to Shaw Wallace & Company to pay
drafts drawn by this company against 108 local buyers.
In addition, in the case of breach of Kerr & Company the contract awarded to local
buyers, they would have no recourse whatsoever to go against Shaw Wallace &
Company to require this company to fulfill the contract.
The facts show that Kerr & Company first contract in its own name with Shaw
Wallace & Company, and later also contract in its own name with local buyers.
All these considerations demonstrate the same and only one proposition: Kerr &
Company contract in its own name and for its own account with Shaw Wallace &
Company as a trader, and sold as a merchant in his own name; and therefore is

subject to tax trader.