Inchausti and Co vs.

Ellis Cromwell
GR L-6584
Oct 161911

Facts:
1) Inchausti is a seller of hemps. It is a custom to sell hemps in bales. In fact, whwnever
hemps are sold, it is understood to be in bales.
2) Bale had an additional cost of 1.75.
3) Inchausti in its dealings from 1908 to 1910 received an additional amount of 31,080
(price of bale) aside from the actual price of hemps.
4) The Collector of Internal revenue included this amount in its computation for taxes. He
demanded that Inchausti pay 1,370.68
5) Inchausti forwarded the case to the court, claiming that the said charge was not
included in the selling price of the hemp but a service charge for bailing the hemp.
Issue:
Was the charge for the bailing a part of the contract of sale or a separate contract for labor?

Held:
The charge for bailing is part of the contract of sale. The bailing is inherent part of the product
when it is sold, it is understood to be baled, there is no need for further stipulations for it. The
test is by the inquiry whether the thing transferred is one not in existence and which never
would have existed but for the order of the party desiring to acquire it.