Scribd
Upload
170 views1 page

KER & CO, LTD. vs. LINGAD (1971)

Ker & Co was assessed commercial broker's taxes for the period 1949 to 1958 based on a consignment agreement with United States Rubber. Under the agreement, Ker & Co would hold Rubber's products on consignment and could only sell to certain entities approved by Rubber. Though the agreement stated Ker & Co was not Rubber's agent, the control Rubber exercised over the goods was deemed "pervasive" and the relationship was determined to be one of broker and principal rather than vendor and vendee. Therefore, the commercial broker's taxes applied to Ker & Co.

Uploaded by

Maya Julieta Catacutan-Estabillo
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
170 views1 page

KER & CO, LTD. vs. LINGAD (1971)

Ker & Co was assessed commercial broker's taxes for the period 1949 to 1958 based on a consignment agreement with United States Rubber. Under the agreement, Ker & Co would hold Rubber's products on consignment and could only sell to certain entities approved by Rubber. Though the agreement stated Ker & Co was not Rubber's agent, the control Rubber exercised over the goods was deemed "pervasive" and the relationship was determined to be one of broker and principal rather than vendor and vendee. Therefore, the commercial broker's taxes applied to Ker & Co.

Uploaded by

Maya Julieta Catacutan-Estabillo
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

KER & CO, LTD. vs.

LINGAD (1971) Pervasive character case Petitioner was assessed by the Commissioner of Internal Revenue the sum of P20,272.33 as the commercial brokers percentage, tax, surcharge, and compromise penalty for the period from July1, 1949 to December 31, 1958. Such liability arose from a contract of petitioner with United States Rubber International (COMPANY) wherein the Ker & Co, as DISTRIBUTOR, will receive, accept, and/or hold upon consignment products from United States Rubber. All goods on consignment remains the property of United States Rubber until sold by the DISTRIBUTOR, but all sales made by the DISTRIBUTOR shall be in his name. It was further agreed that this agreement does not constitute DISTRIBUTOR the agent or legal representative of the COMPANY for any purpose whatsoever. Is Ker & Co is an AGENT/BROKER of the COMPANY? And should the commercial brokers percentage tax apply? YES, it is an AGENT/BROKER of the company and the commercial brokers percentage tax should apply. The relationship is not one of vendor and vendee but that of broker and principal. The mere disclaimer in a contract than an entity like petitioner is not the agent of legal representative x x x for any purpose or whatsoever does not suffice to yield the conclusion that it is an independent merchant if the control over the goods for resale of the goods consigned is pervasive in character: 1. 2. 3. DISTRIBUTOR can dispose the products of the COMPANY only to certain persons or entities within stipulated limits DISTRIBUTOR holds upon consignment the products, which remain properties of the COMPANY Sales made by DISTRIBUTOR are subject to approval by the COMPANY

NOTES When one is or is not a commercial broker The duty assumed by the broker is to bring the minds of the buyer and seller to an agreement for a sale and the price and terms on which it is to be made. Where a company does not act as negotiator or middleman to close a deal between one person and another does work or contract in the name of another, it is not a commercial broker hence it is not liable to the payment of the fixed and percentage taxes on commercial brokers. Distinction between commercial broker and commission merchant A commission merchant is a commercial agent to whom the possession of personalty is entrusted by or for the owner, to be sold, for compensation in pursuance of the agents usual trade or business with title to goods remaining In the principal as distinguished from a person who purchases merchandise with his own capital, takes title in his own name, and sells for his own account at whatever price he may deem advisable. A commission merchant differs from a broker in that he may buy or sell in his own name without closing his principal, while the broker can only buy or sell in the name of his principal.

You might also like