PACIFIC COMMERCIAL COMPANY V.

ALFRED YATCO

July 20, 1939 Avancena, C.J. The broker, unlike the commission merchant, has no relation with the
thing he sells or buys. He is merely an intermediary between the purchaser and the vendor.

Facts: Pacific sold for the account of Victoria Milling Co. refined sugar up to the total amount of
1M. Pacific received by way of commission 29K. Victoria Milling paid merchant sales tax in its
capacity as manufacturer and owner of the sugar sold. Likewise, Pacific paid tax also. There were
two ways in which Pacific made the sales of sugar after looking for purchasers and sending the
purchase order to Victoria Milling: 1) the purchase is made for the delivery of the sugar
EXWAREHOUSE sugar is first deposited in the warehouse of Pacific before delivery to the
purchaser. 2) the purchase is made for the delivery EX-SHIP Pacific would simply hand over the
bill of lading to the purchaser and collect the price CFI of Manila: in the first case, Pacific acted as
a commission merchant; in the second case as a broker ordered Yatco to return to Pacific the
amount collected from it by way of tax on the sale of sugar to be delivered EX-SHIP and denied
prayer for return of amount paid for the sales of sugar to be delivered EX-WAREHOUSE.

Issues:

1) WON there is double taxation NO

2) WON Pacific acted as a commission merchant as to the sugar delivered ex-warehouse YES

3) WON Pacific acted as a mere commercial broker as to the sugar delivered ex-ship YES

Ratio:

1) There is no double taxation. Tax is not upon property or products, but upon occupation or
industry.

2) A commission merchant is one engaged in the purchase or sale for another of personal property
which, for this purpose, is placed in his possession and at his disposal. He maintains a relation
not only with his principal and the purchasers or vendors, but also with the property which is
the property which is the subject matter of transaction. The deposit of the sugar in the
warehouses of Pacific was made upon its own account and at its own risk until it was sold and
taken by the purchaser.

3) The broker has no relation with the thing he sells or buys. He is merely an intermediary between
the purchaser and the vendor. He acquired neither the possession nor the custody of the things
sold. His only office is to bring together the parties to the transaction. The sugar was shipped by
Pacific at its expense and risk until it reached its destination, where it was later taken ex-ship by
the purchaser. Pacific never had possession of the sugar at any time. The bill of lading sent to the
broker was sent only for the purpose of turning it over to the purchaser for the collection of the
price. The sugar did not come to its possession in any sense. KER & CO., LTD VS LINGAD