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Notes On Negotiable Instruments 11
Notes On Negotiable Instruments 11
Notes On Negotiable Instruments 11
Under the Trust Receipts Law (TRL), a trust receipt transaction is any transaction
by and between an entruster and an entrustee where the former releases possession of
goods to the latter upon the execution of the entrustee of a trust receipt. By the receipt,
the entrustee binds himself to hold the goods in trust for the entruster and to sell or
otherwise dispose of them, with the obligation to remit the proceeds thereof to the
entruster.
1. To receive the proceeds from the sale of the goods, etc. released under
a trust receipt to the extent of the amount owing to him as appears in
the receipt.
2. To receive the goods, etc. upon the return of the same by the entrustee
in case of non-sale.
3. To enforce all other rights conferred upon him in the trust receipt.
What is the right of a purchaser for value and in good faith upon buying the goods
sold by the entrustee?
The purchaser for value and in good faith acquires the goods, documents or
instruments free from the entrustees security interest.
The entrustee, even though he is not the owner of the goods. Loss of goods
pending their disposition, does not extinguish the entrustees liability, even if the loss
was not due to the fault or negligence of the entrustee.