Published — February 1, 2021
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Read also: FORM OF TRUST RECEIPTS
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Entruster shall be entitled to the proceeds from the sale of the goods, documents or instruments released under a trust receipt.
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The entruster may cancel the trust and take possession of the goods, documents or instruments subject of the trust.
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The proceeds of sale shall be applied (a) to the payment of the expenses thereof; (b) to the payment of the expenses of re-taking, keeping and storing the goods, documents or instruments; and (c) to the satisfaction of the entrustee’s indebtedness to the entruster.
The parties to a trust receipt transaction are the entruster and entrustee. Entruster is the lender, financer or creditor. Entruster holds title over the good, document, or instrument subject of a trust receipt transaction. On the other hand, entrustee is a borrower, buyer, importer or debtor. He is the person to whom the goods are delivered for sale or processing in trust, with the obligation to return the proceeds of sale of the goods or the goods to the entruster.
What are the rights of an entruster?
PRESIDENTIAL DECREE No. 115 or TRUST RECEIPTS LAW provides that:
The entruster shall be entitled to the proceeds from the sale of the goods, documents or instruments released under a trust receipt to the entrustee to the extent of the amount owing to the entruster or as appears in the trust receipt, or to the return of the goods, documents or instruments in case of non-sale, and to the enforcement of all other rights conferred on him in the trust receipt provided such are not contrary to the provisions of Presidential Decree No. 115.
The entruster may cancel the trust and take possession of the goods, documents or instruments subject of the trust or of the proceeds realized therefrom at any time upon default or failure of the entrustee to comply with any of the terms and conditions of the trust receipt or any other agreement between the entruster and the entrustee, and the entruster in possession of the goods, documents or instruments may, on or after default, give notice to the entrustee of the intention to sell, and may, not less than five days after serving or sending of such notice, sell the goods, documents or instruments at public or private sale, and the entruster may, at a public sale, become a purchaser. The proceeds of any such sale, whether public or private, shall be applied (a) to the payment of the expenses thereof; (b) to the payment of the expenses of re-taking, keeping and storing the goods, documents or instruments; (c) to the satisfaction of the entrustee’s indebtedness to the entruster. The entrustee shall receive any surplus but shall be liable to the entruster for any deficiency. Notice of sale shall be deemed sufficiently given if in writing, and either personally served on the entrustee or sent by post-paid ordinary mail to the entrustee’s last known business address.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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