Comm2 Cases

8/17/2019 Comm2 Cases

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ACT NO. 2137 THE WAREHOUSE RECEIPTS LAW

I — THE ISSUE OF WAREHOUSE RECEIPTS

SECTION 1. Persons who may issue recei!s. — Warehouse recei!s may "e issue#"y any warehouseman.

SECTION $. Form o% recei!s& essen!ia' !erms. — Warehouse recei!s nee# no! "e in

any ar!icu'ar %orm "u! e(ery such recei! mus! em"o#y wi!hin i!s wri!!en or rin!e#

!erms)

*a+ The 'oca!ion o% !he warehouse where !he ,oo#s are s!ore#-

*"+ The #a!e o% !he issue o% !he recei!-

*c+ The consecu!i(e num"er o% !he recei!-

*#+ A s!a!emen! whe!her !he ,oo#s recei(e# wi'' "e #e'i(ere# !o !he "earer- !o a

secie# erson or !o a secie# erson or his or#er-

*e+ The ra!e o% s!ora,e char,es-

*%+ A #escri!ion o% !he ,oo#s or o% !he ac/a,es con!ainin, !hem-

*,+ The si,na!ure o% !he warehouseman which may "e ma#e "y his au!hori0e#

a,en!-

*h+ I% !he recei! is issue# %or ,oo#s o% which !he warehouseman is owner- ei!her

so'e'y or oin!'y or in common wi!h o!hers- !he %ac! o% such ownershi- an#

*i+ A s!a!emen! o% !he amoun! o% a#(ances ma#e an# o% 'ia"i'i!ies incurre# %or which

!he warehouseman c'aims a 'ien. I% !he recise amoun! o% such a#(ances ma#e or o%

such 'ia"i'i!ies incurre# is- a! !he !ime o% !he issue o%- un/nown !o !he

warehouseman or !o his a,en! who issues i!- a s!a!emen! o% !he %ac! !ha! a#(ances

ha(e "een ma#e or 'ia"i'i!ies incurre# an# !he urose !hereo% is su2cien!.

A warehouseman sha'' "e 'ia"'e !o any erson inure# !here"y %or a'' #ama,es

cause# "y !he omission %rom a ne,o!ia"'e recei! o% any o% !he !erms herein

re3uire#.

SECTION 4. Form o% recei!s. — Wha! !erms may "e inser!e#. — A warehouseman

may inser! in a recei! issue# "y him any o!her !erms an# con#i!ions ro(i#e# !ha!

such !erms an# con#i!ions sha'' no!)

*a+ 5e con!rary !o !he ro(isions o% !his Ac!.

*"+ In any wise imair his o"'i,a!ion !o e6ercise !ha! #e,ree o% care in !he sa%e7

/eein, o% !he ,oo#s en!rus!e# !o him which is reasona"'y care%u' man wou'#

e6ercise in re,ar# !o simi'ar ,oo#s o% his own.

SECTION 8. 9eni!ion o% non7ne,o!ia"'e recei!. — A recei! in which i! is s!a!e#

!ha! !he ,oo#s recei(e# wi'' "e #e'i(ere# !o !he #eosi!or or !o any o!her secie#

erson- is a non7ne,o!ia"'e recei!.

SECTION :. 9eni!ion o% ne,o!ia"'e recei!. — A recei! in which i! is s!a!e# !ha! !he

,oo#s recei(e# wi'' "e #e'i(ere# !o !he "earer or !o !he or#er o% any erson name#

in such recei! is a ne,o!ia"'e recei!.


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No ro(ision sha'' "e inser!e# in a ne,o!ia"'e recei! !ha! i! is non7ne,o!ia"'e. Such

ro(ision- i% inser!e# sha'' "e (oi#.

SECTION ;. 9u'ica!e recei!s mus! "e so mar/e#. — When more !han one

ne,o!ia"'e recei! is issue# %or !he same ,oo#s- !he wor# s 'ien&

*"+ An oer !o surren#er !he recei!- i% ne,o!ia"'e- wi!h such in#orsemen!s as wou'#

"e necessary %or !he ne,o!ia!ion o% !he recei!& an#

*c+ A rea#iness an# wi''in,ness !o si,n- when !he ,oo#s are #e'i(ere#- an

ac/now'e#,men! !ha! !hey ha(e "een #e'i(ere#- i% such si,na!ure is re3ues!e# "y!he warehouseman.

In case !he warehouseman re%uses or %ai's !o #e'i(er !he ,oo#s in com'iance wi!h a

#eman# "y !he ho'#er or #eosi!or so accomanie#- !he "ur#en sha'' "e uon !he

warehouseman !o es!a"'ish !he e6is!ence o% a 'aw%u' e6cuse %or such re%usa'.

SECTION D. us!ica!ion o% warehouseman in #e'i(erin,. — A warehouseman is

us!ie# in #e'i(erin, !he ,oo#s- su"ec! !o !he ro(isions o% !he !hree %o''owin,

sec!ions- !o one who is)

*a+ The erson 'aw%u''y en!i!'e# !o !he ossession o% !he ,oo#s- or his a,en!&

*"+ A erson who is ei!her himse'% en!i!'e# !o #e'i(ery "y !he !erms o% a non7

ne,o!ia"'e recei! issue# %or !he ,oo#s- or who has wri!!en au!hori!y %rom !he

erson so en!i!'e# ei!her in#orse# uon !he recei! or wri!!en uon ano!her aer&

or

*c+ A erson in ossession o% a ne,o!ia"'e recei! "y !he !erms o% which !he ,oo#s

are #e'i(era"'e !o him or or#er- or !o "earer- or which has "een in#orse# !o him or in

"'an/ "y !he erson !o whom #e'i(ery was romise# "y !he !erms o% !he recei! or

"y his me#ia!e or imme#ia!e in#orser.


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SECTION 1. Warehouseman>s 'ia"i'i!y %or mis#e'i(ery. — Where a warehouseman

#e'i(ers !he ,oo#s !o one who is no! in %ac! 'aw%u''y en!i!'e# !o !he ossession o%

!hem- !he warehouseman sha'' "e 'ia"'e as %or con(ersion !o a'' ha(in, a ri,h! o%

roer!y or ossession in !he ,oo#s i% he #e'i(ere# !he ,oo#s o!herwise !han as

au!hori0e# "y su"#i(isions *"+ an# *c+ o% !he rece#in, sec!ion- an# !hou,h he#e'i(ere# !he ,oo#s as au!hori0e# "y sai# su"#i(isions- he sha'' "e so 'ia"'e- i% rior

!o such #e'i(ery he ha# ei!her)

*a+ 5een re3ues!e#- "y or on "eha'% o% !he erson 'aw%u''y en!i!'e# !o a ri,h! o%

roer!y or ossession in !he ,oo#s- no! !o ma/e such #e'i(er& or

*"+ Ha# in%orma!ion !ha! !he #e'i(ery a"ou! !o "e ma#e was !o one no! 'aw%u''y

en!i!'e# !o !he ossession o% !he ,oo#s.

SECTION 11. Ne,o!ia"'e recei! mus! "e cance''e# when ,oo#s #e'i(ere#. — E6ce!

as ro(i#e# in sec!ion !hir!y7si6- where a warehouseman #e'i(ers ,oo#s %or which he

ha# issue# a ne,o!ia"'e recei!- !he ne,o!ia!ion o% which wou'# !rans%er !he ri,h! !o

!he ossession o% !he ,oo#s- an# %ai's !o !a/e u an# cance' !he recei!- he sha'' "e

'ia"'e !o any one who urchases %or (a'ue in ,oo# %ai!h such recei!- %or %ai'ure !o

#e'i(er !he ,oo#s !o him- whe!her such urchaser ac3uire# !i!'e !o !he recei! "e%ore

or a%!er !he #e'i(ery o% !he ,oo#s "y !he warehouseman.

SECTION 1$. Ne,o!ia"'e recei!s mus! "e cance''e# or mar/e# when ar! o% ,oo#s

#e'i(ere#. — E6ce! as ro(i#e# in sec!ion !hir!y7si6- where a warehouseman

#e'i(ers ar! o% !he ,oo#s %or which he ha# issue# a ne,o!ia"'e recei! an# %ai's

ei!her !o !a/e u an# cance' such recei! or !o 'ace 'ain'y uon i! a s!a!emen! o%wha! ,oo#s or ac/a,es ha(e "een #e'i(ere#- he sha'' "e 'ia"'e !o any one who

urchases %or (a'ue in ,oo# %ai!h such recei!- %or %ai'ure !o #e'i(er a'' !he ,oo#s

secie# in !he recei!- whe!her such urchaser ac3uire# !i!'e !o !he recei! "e%ore

or a%!er !he #e'i(ery o% any or!ion o% !he ,oo#s "y !he warehouseman.

SECTION 14. A'!ere# recei!s. — The a'!era!ion o% a recei! sha'' no! e6cuse !he

warehouseman who issue# i! %rom any 'ia"i'i!y i% such a'!era!ion was)

*a+ Imma!eria'-

*"+ Au!hori0e#- or

*c+ a#e wi!hou! %rau#u'en! in!en!.

I% !he a'!era!ion was au!hori0e#- !he warehouseman sha'' "e 'ia"'e accor#in, !o !he

!erms o% !he recei! as a'!ere#. I% !he a'!era!ion was unau!hori0e# "u! ma#e wi!hou!

%rau#u'en! in!en!- !he warehouseman sha'' "e 'ia"'e accor#in, !o !he !erms o% !he

recei! as !hey were "e%ore a'!era!ion.

a!eria' an# %rau#u'en! a'!era!ion o% a recei! sha'' no! e6cuse !he warehouseman

who issue# i! %rom 'ia"i'i!y !o #e'i(er accor#in, !o !he !erms o% !he recei! as

ori,ina''y issue#- !he ,oo#s %or which i! was issue# "u! sha'' e6cuse him %rom any

o!her 'ia"i'i!y !o !he erson who ma#e !he a'!era!ion an# !o any erson who !oo/

wi!h no!ice o% !he a'!era!ion. Any urchaser o% !he recei! %or (a'ue wi!hou! no!ice o%

!he a'!era!ion sha'' ac3uire !he same ri,h!s a,ains! !he warehouseman which such

urchaser wou'# ha(e ac3uire# i% !he recei! ha# no! "een a'!ere# a! !he !ime o%

urchase.

SECTION 18. ?os! or #es!roye# recei!s. — Where a ne,o!ia"'e recei! has "een 'os!

or #es!roye#- a cour! o% come!en! uris#ic!ion may or#er !he #e'i(ery o% !he ,oo#s

uon sa!is%ac!ory roo% o% such 'oss or #es!ruc!ion an# uon !he ,i(in, o% a "on#


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wi!h su2cien! sure!ies !o "e aro(e# "y !he cour! !o ro!ec! !he warehouseman

%rom any 'ia"i'i!y or e6ense- which he or any erson inure# "y such #e'i(ery may

incur "y reason o% !he ori,ina' recei! remainin, ou!s!an#in,. The cour! may a'so in

i!s #iscre!ion or#er !he aymen! o% !he warehouseman>s reasona"'e cos!s an#

counse' %ees.

The #e'i(ery o% !he ,oo#s un#er an or#er o% !he cour! as ro(i#e# in !his sec!ion-

sha'' no! re'ie(e !he warehouseman %rom 'ia"i'i!y !o a erson !o whom !he

ne,o!ia"'e recei! has "een or sha'' "e ne,o!ia!e# %or (a'ue wi!hou! no!ice o% !he

rocee#in,s or o% !he #e'i(ery o% !he ,oo#s.

SECTION 1:. Eec! o% #u'ica!e recei!s. — A recei! uon !he %ace o% which !he

wor#


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!hem as reasona"'y care%u' owner o% simi'ar ,oo#s wou'# e6ercise- "u! he sha'' no!

"e 'ia"'e- in !he a"sence o% an a,reemen! !o !he con!rary- %or any 'oss or inury !o

!he ,oo#s which cou'# no! ha(e "een a(oi#e# "y !he e6ercise o% such care $5wuI.

SECTION $$. @oo#s mus! "e /e! seara!e. — E6ce! as ro(i#e# in !he %o''owin,

sec!ion- a warehouseman sha'' /ee !he ,oo#s so %ar seara!e %rom ,oo#s o% o!her#eosi!ors an# %rom o!her ,oo#s o% !he same #eosi!or %or which a seara!e recei!

has "een issue#- as !o ermi! a! a'' !imes !he i#en!ica!ion an# re#e'i(ery o% !he

,oo#s #eosi!e#.

SECTION $4. Fun,i"'e ,oo#s may "e commin,'e# i% warehouseman au!hori0e#. — I%

au!hori0e# "y a,reemen! or "y cus!om- a warehouseman may min,'e %un,i"'e

,oo#s wi!h o!her ,oo#s o% !he same /in# an# ,ra#e. In such case- !he (arious

#eosi!ors o% !he min,'e# ,oo#s sha'' own !he en!ire mass in common an# each

#eosi!or sha'' "e en!i!'e# !o such or!ion !hereo% as !he amoun! #eosi!e# "y him

"ears !o !he who'e.

SECTION $8. ?ia"i'i!y o% warehouseman !o #eosi!ors o% commin,'e# ,oo#s. — The

warehouseman sha'' "e se(era''y 'ia"'e !o each #eosi!or %or !he care an# re#e'i(ery

o% his share o% such mass !o !he same e6!en! an# un#er !he same circums!ances as

i% !he ,oo#s ha# "een /e! seara!e.

SECTION $:. A!!achmen! or 'e(y uon ,oo#s %or which a ne,o!ia"'e recei! has

"een issue#. — I% ,oo#s are #e'i(ere# !o a warehouseman "y !he owner or "y a

erson whose ac! in con(eyin, !he !i!'e !o !hem !o a urchaser in ,oo# %ai!h %or

(a'ue wou'# "in# !he owner- an# a ne,o!ia"'e recei! is issue# %or !hem- !hey can

no! !herea%!er- whi'e in !he ossession o% !he warehouseman- "e a!!ache# "y,arnishmen! or o!herwise- or "e 'e(ie# uon un#er an e6ecu!ion un'ess !he recei!

"e rs! surren#ere# !o !he warehouseman or i!s ne,o!ia!ion enoine#. The

warehouseman sha'' in no case "e come''e# !o #e'i(er u !he ac!ua' ossession o%

!he ,oo#s un!i' !he recei! is surren#ere# !o him or imoun#e# "y !he cour! P3;,S.

SECTION $;. Cre#i!or>s reme#ies !o reach ne,o!ia"'e recei!s. — A cre#i!or whose

#e"!or is !he owner o% a ne,o!ia"'e recei! sha'' "e en!i!'e# !o such ai# %rom cour!s

o% aroria!e uris#ic!ion- "y inunc!ion an# o!herwise- in a!!achin, such recei! or

in sa!is%yin, !he c'aim "y means !hereo% as is a''owe# a! 'aw or in e3ui!y in !hese

is'an#s in re,ar# !o roer!y which can no! rea#i'y "e a!!ache# or 'e(ie# uon "yor#inary 'e,a' rocess.

SECTION $=. Wha! c'aims are inc'u#e# in !he warehouseman>s 'ien. — Su"ec! !o !he

ro(isions o% sec!ion !hir!y- a warehouseman sha'' ha(e a 'ien on ,oo#s #eosi!e# or

on !he rocee#s !hereo% in his han#s- %or a'' 'aw%u' char,es %or s!ora,e an#

reser(a!ion o% !he ,oo#s& a'so %or a'' 'aw%u' c'aims %or money a#(ance#- in!eres!-

insurance- !ransor!a!ion- 'a"or- wei,hin,- cooerin, an# o!her char,es an#

e6enses in re'a!ion !o such ,oo#s- a'so %or a'' reasona"'e char,es an# e6enses %or

no!ice- an# a#(er!isemen!s o% sa'e- an# %or sa'e o% !he ,oo#s where #e%au'! ha#

"een ma#e in sa!is%yin, !he warehouseman>s 'ien.

SECTION $B. A,ains! wha! roer!y !he 'ien may "e en%orce#. — Su"ec! !o !he

ro(isions o% sec!ion !hir!y- a warehouseman>s 'ien may "e en%orce#)

*a+ A,ains! a'' ,oo#s- whene(er #eosi!e#- "e'on,in, !o !he erson who is 'ia"'e as

#e"!or %or !he c'aims in re,ar# !o which !he 'ien is asser!e#- an#

*"+ A,ains! a'' ,oo#s "e'on,in, !o o!hers which ha(e "een #eosi!e# a! any !ime "y

!he erson who is 'ia"'e as #e"!or %or !he c'aims in re,ar# !o which !he 'ien is

asser!e# i% such erson ha# "een so en!rus!e# wi!h !he ossession o% ,oo#s !ha! a

'e#,e o% !he same "y him a! !he !ime o% !he #eosi! !o one who !oo/ !he ,oo#s in


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,oo# %ai!h %or (a'ue wou'# ha(e "een (a'i#.

SECTION $D. How !he 'ien may "e 'os!. — A warehouseman 'oses his 'ien uon

,oo#s)

*a+ 5y surren#erin, ossession !hereo%- or

*"+ 5y re%usin, !o #e'i(er !he ,oo#s when a #eman# is ma#e wi!h which he is "oun#

!o com'y un#er !he ro(isions o% !his Ac!.

SECTION 4. Ne,o!ia"'e recei! mus! s!a!e char,es %or which !he 'ien is c'aime#. —

I% a ne,o!ia"'e recei! is issue# %or ,oo#s- !he warehouseman sha'' ha(e no 'ien

!hereon e6ce! %or char,es %or s!ora,e o% ,oo#s su"se3uen! !o !he #a!e o% !he

recei! un'ess !he recei! e6ress'y enumera!e# o!her char,es %or which a 'ien is

c'aime#. In such case- !here sha'' "e a 'ien %or !he char,es enumera!e# so %ar as

!hey are wi!hin !he !erms o% sec!ion !wen!y7se(en a'!hou,h !he amoun! o% !he

char,es so enumera!e# is no! s!a!e# in !he recei!.

SECTION 41. Warehouseman nee# no! #e'i(er un!i' 'ien is sa!ise#. — A

warehouseman ha(in, a 'ien (a'i# a,ains! !he erson #eman#in, !he ,oo#s may

re%use !o #e'i(er !he ,oo#s !o him un!i' !he 'ien is sa!ise#.

SECTION 4$. Warehouseman>s 'ien #oes no! rec'u#e o!her reme#ies. — Whe!her a

warehouseman has or has no! a 'ien uon !he ,oo#s- he is en!i!'e# !o a'' reme#ies

a''owe# "y 'aw !o a cre#i!or a,ains! a #e"!or %or !he co''ec!ion %rom !he #eosi!or o%

a'' char,es an# a#(ances which !he #eosi!or has e6ress'y or im'ie#'y con!rac!e#

wi!h !he warehouseman !o ay.

SECTION 44. Sa!is%ac!ion o% 'ien "y sa'e. — A warehouseman>s 'ien %or a c'aim which

has "ecome #ue may "e sa!ise# as %o''ows)

*a+ An i!emi0e# s!a!emen! o% !he warehouseman>s c'aim- showin, !he sum #ue a!

!he !ime o% !he no!ice an# !he #a!e or #a!es when i! "ecomes #ue-

*"+ A "rie% #escri!ion o% !he ,oo#s a,ains! which !he 'ien e6is!s-

*c+ A #eman# !ha! !he amoun! o% !he c'aim as s!a!e# in !he no!ice o% such %ur!herc'aim as sha'' accrue- sha'' "e ai# on or "e%ore a #ay men!ione#- no! 'ess !han !en

#ays %rom !he #e'i(ery o% !he no!ice i% i! is ersona''y #e'i(ere#- or %rom !he !ime

when !he no!ice sha'' reach i!s #es!ina!ion- accor#in, !o !he #ue course o% os!- i%

!he no!ice is sen! "y mai'-

*#+ A s!a!emen! !ha! un'ess !he c'aim is ai# wi!hin !he !ime secie#- !he ,oo#s

wi'' "e a#(er!ise# %or sa'e an# so'# "y auc!ion a! a secie# !ime an# 'ace.

In accor#ance wi!h !he !erms o% a no!ice so ,i(en- a sa'e o% !he ,oo#s "y auc!ion

may "e ha# !o sa!is%y any (a'i# c'aim o% !he warehouseman %or which he has a 'ien

on !he ,oo#s. The sa'e sha'' "e ha# in !he 'ace where !he 'ien was ac3uire#- or- i%

such 'ace is mani%es!'y unsui!a"'e %or !he urose o% !he c'aim secie# in !he

no!ice !o !he #eosi!or has e'ase#- an# a#(er!isemen! o% !he sa'e- #escri"in, !he

,oo#s !o "e so'#- an# s!a!in, !he name o% !he owner or erson on whose accoun!

!he ,oo#s are he'#- an# !he !ime an# 'ace o% !he sa'e- sha'' "e u"'ishe# once a

wee/ %or !wo consecu!i(e wee/s in a newsaer u"'ishe# in !he 'ace where such

sa'e is !o "e he'#. The sa'e sha'' no! "e he'# 'ess !han %!een #ays %rom !he !ime o%

!he rs! u"'ica!ion. I% !here is no newsaer u"'ishe# in such 'ace- !he

a#(er!isemen! sha'' "e os!e# a! 'eas! !en #ays "e%ore such sa'e in no! 'ess !han si6

consicuous 'aces !herein.


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From !he rocee#s o% such sa'e- !he warehouseman sha'' sa!is%y his 'ien inc'u#in,

!he reasona"'e char,es o% no!ice- a#(er!isemen! an# sa'e. The "a'ance- i% any- o%

such rocee#s sha'' "e he'# "y !he warehouseman an# #e'i(ere# on #eman# !o !he

erson !o whom he wou'# ha(e "een "oun# !o #e'i(er or us!ie# in #e'i(erin,

,oo#s.

A! any !ime "e%ore !he ,oo#s are so so'#- any erson c'aimin, a ri,h! o% roer!y or

ossession !herein may ay !he warehouseman !he amoun! necessary !o sa!is%y his

'ien an# !o ay !he reasona"'e e6enses an# 'ia"i'i!ies incurre# in ser(in, no!ices

an# a#(er!isin, an# rearin, %or !he sa'e u !o !he !ime o% such aymen!. The

warehouseman sha'' #e'i(er !he ,oo#s !o !he erson ma/in, aymen! i% he is a

erson en!i!'e#- un#er !he ro(ision o% !his Ac!- !o !he ossession o% !he ,oo#s on

aymen! o% char,es !hereon. O!herwise- !he warehouseman sha'' re!ain !he

ossession o% !he ,oo#s accor#in, !o !he !erms o% !he ori,ina' con!rac! o% #eosi!.

SECTION 48. Perisha"'e an# ha0ar#ous ,oo#s. — I% ,oo#s are o% a erisha"'e na!ure-

or "y /eein, wi'' #e!eriora!e ,rea!'y in (a'ue- or- "y !heir or#er- 'ea/a,e-

inamma"i'i!y- or e6'osi(e na!ure- wi'' "e 'ia"'e !o inure o!her roer!y - !he

warehouseman may ,i(e such no!ice !o !he owner or !o !he erson in whose names

!he ,oo#s are s!ore#- as is reasona"'e an# ossi"'e un#er !he circums!ances- !o

sa!is%y !he 'ien uon such ,oo#s an# !o remo(e !hem %rom !he warehouse an# in !he

e(en! o% !he %ai'ure o% such erson !o sa!is%y !he 'ien an# !o recei(e !he ,oo#s wi!hin

!he !ime so secie#- !he warehouseman may se'' !he ,oo#s a! u"'ic or ri(a!e

sa'e wi!hou! a#(er!isin,. I% !he warehouseman- a%!er a reasona"'e eor!- is una"'e

!o se'' such ,oo#s- he may #isose o% !hem in any 'aw%u' manner an# sha'' incur no

'ia"i'i!y "y reason !hereo%.

The rocee#s o% any sa'e ma#e un#er !he !erms o% !his sec!ion sha'' "e #isose# o%

in !he same way as !he rocee#s o% sa'es ma#e un#er !he !erms o% !he rece#in,

sec!ion.

SECTION 4:. O!her me!ho#s o% en%orcin, 'ien. — The reme#y %or en%orcin, a 'ien

herein ro(i#e# #oes no! rec'u#e any o!her reme#ies a''owe# "y 'aw %or !he

en%orcemen! o% a 'ien a,ains! ersona' roer!y nor "ar !he ri,h! !o reco(er so much

o% !he warehouseman>s c'aim as sha'' no! "e ai# "y !he rocee#s o% !he sa'e o% !he

roer!y.

SECTION 4;. Eec! o% sa'e. — A%!er ,oo#s ha(e "een 'aw%u''y so'# !o sa!is%y a

warehouseman>s 'ien- or ha(e "een 'aw%u''y so'# or #isose# o% "ecause o% !heir

erisha"'e or ha0ar#ous na!ure- !he warehouseman sha'' no! !herea%!er "e 'ia"'e %or

%ai'ure !o #e'i(er !he ,oo#s !o !he #eosi!or or owner o% !he ,oo#s or !o a ho'#er o%

!he recei! ,i(en %or !he ,oo#s when !hey were #eosi!e#- e(en i% such recei! "e

ne,o!ia"'e =mNE05".

III — NE@OTIATION AN9 TRANSFER OF RECEIPTS

SECTION 4=. Ne,o!ia!ion o% ne,o!ia"'e recei! o% #e'i(ery. — A ne,o!ia"'e recei!

may "e ne,o!ia!e# "y #e'i(ery)

*a+ Where- "y !erms o% !he recei!- !he warehouseman un#er!a/es !o #e'i(er !he

,oo#s !o !he "earer- or

*"+ Where- "y !he !erms o% !he recei!- !he warehouseman un#er!a/es !o #e'i(er !he

,oo#s !o !he or#er o% a secie# erson- an# such erson or a su"se3uen! in#orsee

o% !he recei! has in#orse# i! in "'an/ or !o "earer.

Where- "y !he !erms o% a ne,o!ia"'e recei!- !he ,oo#s are #e'i(era"'e !o "earer or


8/22

where a ne,o!ia"'e recei! has "een in#orse# in "'an/ or !o "earer- any ho'#er may

in#orse !he same !o himse'% or !o any o!her secie# erson- an#- in such case- !he

recei! sha'' !herea%!er "e ne,o!ia!e# on'y "y !he in#orsemen! o% such in#orsee.

SECTION 4B. Ne,o!ia!ion o% ne,o!ia"'e recei! "y in#orsemen!. — A ne,o!ia"'e

recei! may "e ne,o!ia!e# "y !he in#orsemen! o% !he erson !o whose or#er !he,oo#s are- "y !he !erms o% !he recei!- #e'i(era"'e. Such in#orsemen! may "e in

"'an/- !o "earer or !o a secie# erson. I% in#orse# !o a secie# erson- i! may "e

a,ain ne,o!ia!e# "y !he in#orsemen! o% such erson in "'an/- !o "earer or !o

ano!her secie# erson. Su"se3uen! ne,o!ia!ion may "e ma#e in 'i/e manner.

SECTION 4D. Trans%er o% recei!. — A recei! which is no! in such %orm !ha! i! can "e

ne,o!ia!e# "y #e'i(ery may "e !rans%erre# "y !he ho'#er "y #e'i(ery !o a urchaser

or #onee.

A non7ne,o!ia"'e recei! can no! "e ne,o!ia!e#- an# !he in#orsemen! o% such a

recei! ,i(es !he !rans%eree no a##i!iona' ri,h!.

SECTION 8. Who may ne,o!ia!e a recei!. — A ne,o!ia"'e recei! may "e

ne,o!ia!e#)

*a+ 5y !he owner !hereo%- or

*"+ 5y any erson !o whom !he ossession or cus!o#y o% !he recei! has "een

en!rus!e# "y !he owner- i%- "y !he !erms o% !he recei!- !he warehouseman

un#er!a/es !o #e'i(er !he ,oo#s !o !he or#er o% !he erson !o whom !he ossession

or cus!o#y o% !he recei! has "een en!rus!e#- or i%- a! !he !ime o% such en!rus!in,-!he recei! is in such %orm !ha! i! may "e ne,o!ia!e# "y #e'i(ery.

SECTION 81. Ri,h!s o% erson !o whom a recei! has "een ne,o!ia!e#. — A erson

!o whom a ne,o!ia"'e recei! has "een #u'y ne,o!ia!e# ac3uires !here"y)

*a+ Such !i!'e !o !he ,oo#s as !he erson ne,o!ia!in, !he recei! !o him ha# or ha#

a"i'i!y !o con(ey !o a urchaser in ,oo# %ai!h %or (a'ue- an# a'so such !i!'e !o !he

,oo#s as !he #eosi!or or erson !o whose or#er !he ,oo#s were !o "e #e'i(ere# "y

!he !erms o% !he recei! ha# or ha# a"i'i!y !o con(ey !o a urchaser in ,oo# %ai!h %or

(a'ue- an#

*"+ The #irec! o"'i,a!ion o% !he warehouseman !o ho'# ossession o% !he ,oo#s %or

him accor#in, !o !he !erms o% !he recei! as %u''y as i% !he warehouseman an#

con!rac!e# #irec!'y wi!h him.

SECTION 8$. Ri,h!s o% erson !o whom recei! has "een !rans%erre#. — A erson !o

whom a recei! has "een !rans%erre# "u! no! ne,o!ia!e# ac3uires !here"y- as

a,ains! !he !rans%eror- !he !i!'e o% !he ,oo#s su"ec! !o !he !erms o% any a,reemen!

wi!h !he !rans%eror.

I% !he recei! is non7ne,o!ia"'e- such erson a'so ac3uires !he ri,h! !o no!i%y !he

warehouseman o% !he !rans%er !o him o% such recei! an# !here"y !o ac3uire !he

#irec! o"'i,a!ion o% !he warehouseman !o ho'# ossession o% !he ,oo#s %or him

accor#in, !o !he !erms o% !he recei!.

Prior !o !he no!ica!ion o% !he warehouseman "y !he !rans%eror or !rans%eree o% a

non7ne,o!ia"'e recei!- !he !i!'e o% !he !rans%eree !o !he ,oo#s an# !he ri,h! !o

ac3uire !he o"'i,a!ion o% !he warehouseman may "e #e%ea!e# "y !he 'e(y o% an

a!!achmen! or e6ecu!ion uon !he ,oo#s "y a cre#i!or o% !he !rans%eror or "y a

no!ica!ion !o !he warehouseman "y !he !rans%eror or a su"se3uen! urchaser %rom

!he !rans%eror o% a su"se3uen! sa'e o% !he ,oo#s "y !he !rans%eror.


9/22

SECTION 84. Trans%er o% ne,o!ia"'e recei! wi!hou! in#orsemen!. — Where a

ne,o!ia"'e recei! is !rans%erre# %or (a'ue "y #e'i(ery an# !he in#orsemen! o% !he

!rans%eror is essen!ia' %or ne,o!ia!ion- !he !rans%eree ac3uires a ri,h! a,ains! !he

!rans%eror !o come' him !o in#orse !he recei! un'ess a con!rary in!en!ion aears.

The ne,o!ia!ion sha'' !a/e eec! as o% !he !ime when !he in#orsemen! is ac!ua''yma#e.

SECTION 88. Warran!ies o% a sa'e o% recei!. — A erson who- %or (a'ue- ne,o!ia!es

or !rans%ers a recei! "y in#orsemen! or #e'i(ery- inc'u#in, one who assi,ns %or

(a'ue a c'aim secure# "y a recei!- un'ess a con!rary in!en!ion aears- warran!s)

*a+ Tha! !he recei! is ,enuine-

*"+ Tha! he has a 'e,a' ri,h! !o ne,o!ia!e or !rans%er i!-

*c+ Tha! he has /now'e#,e o% no %ac! which wou'# imair !he (a'i#i!y or wor!h o% !he

recei!- an#

*#+ Tha! he has a ri,h! !o !rans%er !he !i!'e !o !he ,oo#s an# !ha! !he ,oo#s are

merchan!a"'e or ! %or a ar!icu'ar urose whene(er such warran!ies wou'# ha(e

"een im'ie#- i% !he con!rac! o% !he ar!ies ha# "een !o !rans%er wi!hou! a recei! o%

!he ,oo#s reresen!e# !here"y.

SECTION 8:. In#orser no! a ,uaran!or. — The in#orsemen! o% a recei! sha'' no!

ma/e !he in#orser 'ia"'e %or any %ai'ure on !he ar! o% !he warehouseman or

re(ious in#orsers o% !he recei! !o %u''' !heir resec!i(e o"'i,a!ions.

SECTION 8;. No warran!y im'ie# %rom acce!in, aymen! o% a #e"!. — A

mor!,a,ee- 'e#,ee- or ho'#er %or securi!y o% a recei! who- in ,oo# %ai!h- #eman#s

or recei(es aymen! o% !he #e"! %or which such recei! is securi!y- whe!her %rom a

ar!y !o a #ra%! #rawn %or such #e"! or %rom any o!her erson- sha'' no!- "y so #oin,-

"e #eeme# !o reresen! or !o warran! !he ,enuineness o% such recei! or !he

3uan!i!y or 3ua'i!y o% !he ,oo#s !herein #escri"e# AO##.

SECTION 8=. When ne,o!ia!ion no! imaire# "y %rau#- mis!a/e or #uress. — The

(a'i#i!y o% !he ne,o!ia!ion o% a recei! is no! imaire# "y !he %ac! !ha! suchne,o!ia!ion was a "reach o% #u!y on !he ar! o% !he erson ma/in, !he ne,o!ia!ion

or "y !he %ac! !ha! !he owner o% !he recei! was in#uce# "y %rau#- mis!a/e or #uress

or !o en!rus! !he ossession or cus!o#y o% !he recei! !o such erson- i% !he erson

!o whom !he recei! was ne,o!ia!e# or a erson !o whom !he recei! was

su"se3uen!'y ne,o!ia!e# ai# (a'ue !here%or- wi!hou! no!ice o% !he "reach o% #u!y-

or %rau#- mis!a/e or #uress rB!".

SECTION 8B. Su"se3uen! ne,o!ia!ion. — Where a erson ha(in, so'#- mor!,a,e#- or

'e#,e# ,oo#s which are in warehouse an# %or which a ne,o!ia"'e recei! has "een

issue#- or ha(in, so'#- mor!,a,e#- or 'e#,e# !he ne,o!ia"'e recei! reresen!in,

such ,oo#s- con!inues in ossession o% !he ne,o!ia"'e recei!- !he su"se3uen!

ne,o!ia!ion !hereo% "y !he erson un#er any sa'e or o!her #isosi!ion !hereo% !o any

erson recei(in, !he same in ,oo# %ai!h- %or (a'ue an# wi!hou! no!ice o% !he re(ious

sa'e- mor!,a,e or 'e#,e- sha'' ha(e !he same eec! as i% !he rs! urchaser o% !he

,oo#s or recei! ha# e6ress'y au!hori0e# !he su"se3uen! ne,o!ia!ion.

SECTION 8D. Ne,o!ia!ion #e%ea!s (en#or>s 'ien. — Where a ne,o!ia"'e recei! has

"een issue# %or ,oo#s- no se''er>s 'ien or ri,h! o% s!oa,e in !ransi!u sha'' #e%ea!

!he ri,h!s o% any urchaser %or (a'ue in ,oo# %ai!h !o whom such recei! has "een

ne,o!ia!e#- whe!her such ne,o!ia!ion "e rior or su"se3uen! !o !he no!ica!ion !o

!he warehouseman who issue# such recei! o% !he se''er>s c'aim !o a 'ien or ri,h! o%


10/22

s!oa,e in !ransi!u. Nor sha'' !he warehouseman "e o"'i,e# !o #e'i(er or us!ie#

in #e'i(erin, !he ,oo#s !o an unai# se''er un'ess !he recei! is rs! surren#ere# %or

cance''a!ion.

IJ — CRIINA? OFFENSES

SECTION :. Issue o% recei! %or ,oo#s no! recei(e#. — A warehouseman- or an

o2cer- a,en!- or ser(an! o% a warehouseman who issues or ai#s in issuin, a recei!

/nowin, !ha! !he ,oo#s %or which such recei! is issue# ha(e no! "een ac!ua''y

recei(e# "y such warehouseman- or are no! un#er his ac!ua' con!ro' a! !he !ime o%

issuin, such recei!- sha'' "e ,ui'!y o% a crime- an#- uon con(ic!ion- sha'' "e

unishe# %or each oense "y imrisonmen! no! e6cee#in, (e years- or "y a ne

no! e6cee#in, !en !housan# esos- or "o!h.

SECTION :1. Issue o% recei! con!ainin, %a'se s!a!emen!. — A warehouseman- or any

o2cer- a,en! or ser(an! o% a warehouseman who %rau#u'en!'y issues or ai#s in

%rau#u'en!'y issuin, a recei! %or ,oo#s /nowin, !ha! i! con!ains any %a'se

s!a!emen!- sha'' "e ,ui'!y o% a crime- an# uon con(ic!ion- sha'' "e unishe# %or

each oense "y imrisonmen! no! e6cee#in, one year- or "y a ne no! e6cee#in,

!wo !housan# esos- or "y "o!h.

SECTION :$. Issue o% #u'ica!e recei! no! so mar/e#. — A warehouse- or any

o2cer- a,en!- or ser(an! o% a warehouseman who issues or ai#s in issuin, a

#u'ica!e or a##i!iona' ne,o!ia"'e recei! %or ,oo#s /nowin, !ha! a %ormer

ne,o!ia"'e recei! %or !he same ,oo#s or any ar! o% !hem is ou!s!an#in, an#

uncance'e#- wi!hou! 'ain'y 'acin, uon !he %ace !hereo% !he wor# s ,oo#s or recei!s which #o no! s!a!e !ha!

%ac!. — Where !hey are #eosi!e# wi!h or he'# "y a warehouseman ,oo#s o% which

he is owner- ei!her so'e'y or oin!'y or in common wi!h o!hers- such warehouseman-

or any o% his o2cers- a,en!s- or ser(an!s who- /nowin, !his ownershi- issues or

ai#s in issuin, a ne,o!ia"'e recei! %or such ,oo#s which #oes no! s!a!e suchownershi- sha'' "e ,ui'!y o% a crime- an#- uon con(ic!ion- sha'' "e unishe# %or

each oense "y imrisonmen! no! e6cee#in, one year- or "y a ne no! e6cee#in,

!wo !housan# esos- or "y "o!h.

SECTION :8. 9e'i(ery o% ,oo#s wi!hou! o"!ainin, ne,o!ia"'e recei!. — A

warehouseman- or any o2cer- a,en!- or ser(an! o% a warehouseman- who #e'i(ers

,oo#s ou! o% !he ossession o% such warehouseman- /nowin, !ha! a ne,o!ia"'e

recei! !he ne,o!ia!ion o% which wou'# !rans%er !he ri,h! !o !he ossession o% such

,oo#s is ou!s!an#in, an# uncance'e#- wi!hou! o"!ainin, !he ossession o% such

recei! a! or "e%ore !he !ime o% such #e'i(ery- sha''- e6ce! in !he cases ro(i#e# %or

in sec!ions %our!een an# !hir!y7si6- "e %oun# ,ui'!y o% a crime- an#- uon con(ic!ion-

sha'' "e unishe# %or each oense "y imrisonmen! no! e6cee#in, one year- or "y a

ne no! e6cee#in, !wo !housan# esos- or "y "o!h cAo.

SECTION ::. Ne,o!ia!ion o% recei! %or mor!,a,e# ,oo#s. — Any erson who

#eosi!s ,oo#s !o which he has no !i!'e- or uon which !here is a 'ien or mor!,a,e-

an# who !a/es %or such ,oo#s a ne,o!ia"'e recei! which he a%!erwar#s ne,o!ia!es

%or (a'ue wi!h in!en! !o #ecei(e an# wi!hou! #isc'osin, his wan! o% !i!'e or !he

e6is!ence o% !he 'ien or mor!,a,e- sha'' "e ,ui'!y o% a crime- an#- uon con(ic!ion-

sha'' "e unishe# %or each oense "y imrisonmen! no! e6cee#in, one year- or "y a

ne no! e6cee#in, !wo !housan# esos- or "y "o!h.


11/22

J — INTERPRETATION

SECTION :;. Case no! ro(i#e# %or in Ac!. — Any case no! ro(i#e# %or in !his Ac!

sha'' "e ,o(erne# "y !he ro(isions o% e6is!in, 'e,is'a!ion- or in #e%au'! !hereo%- "y!he ru'e o% !he 'aw merchan!.

SECTION :=. Name o% Ac!. — This Ac! may "e ci!e# as !he Warehouse Recei!s Ac!.

SECTION :B. 9eni!ions. — *a+ In !his Ac!- un'ess !he con!en! or su"ec! ma!!er

o!herwise re3uires)


12/22

ACT No. 3952

THE BULK SALES LAW (as amene!

AN ACT TO RE"ULATE THE SALE# TRANS$ER# %ORT"A"E OR ASSI"N%ENT

O$ "OO&S# WARES# %ERCHAN&ISE# PRO'ISIONS OR %ATERIALS# IN BULK#

AN& PRESCRIBIN" PENALTIES $OR THE 'IOLATION O$ THE PRO'ISIONS

THEREO$

Se)*on 1. This Ac! sha'' "e /nown as


13/22


14/22

PRESI&ENTIAL &ECREE No. 115 an,a8 29# 1973

PRO'I&IN" $OR THE RE"ULATION O$ TRUST RECEIPTS TRANSACTIONS

WHEREAS- !he u!i'i0a!ion o% !rus! recei!s- as a con(enien! "usiness #e(ice !o assis!

imor!ers an# merchan!s so'(e !heir nancin, ro"'ems- ha# ,aine# ou'ar

acce!ance in in!erna!iona' an# #omes!ic "usiness rac!ices- ar!icu'ar'y in

commercia' "an/in, !ransac!ions&

WHEREAS- !here is no secic 'aw in !he Phi'iines !ha! ,o(erns !rus! recei!

!ransac!ions- esecia''y !he ri,h!s an# o"'i,a!ions o% !he ar!ies in(o'(e# !herein

an# !he en%orcemen! o% !he sai# ri,h!s in case o% #e%au'! or (io'a!ion o% !he !erms o%

!he !rus! recei! a,reemen!&

WHEREAS- !he recommen#a!ions con!aine# in !he reor! on !he nancia' sys!em

which ha(e "een acce!e#- wi!h cer!ain mo#ica!ions "y !he mone!ary au!hori!ies

inc'u#e#- amon, o!hers- !he enac!men! o% a 'aw re,u'a!in, !he !rus! recei!

!ransac!ions&

NOW- THEREFORE- I- FER9INAN9 E. ARCOS- Presi#en! o% !he Phi'iines- "y (ir!ue

o% !he owers (es!e# in me "y !he Cons!i!u!ion- as Comman#er7in7Chie% o% a'' !he

Arme# Forces o% !he Phi'iines- an# ursuan! !o Proc'ama!ion No. 1B1- #a!e#

Se!em"er $1- 1D=$- an# @enera' Or#er No. 1- #a!e# Se!em"er $$- 1D=$- as

amen#e#- an# in or#er !o eec! !he #esire# chan,es an# re%orms in !he socia'-

economic- an# o'i!ica' s!ruc!ure o% our socie!y- #o here"y or#er an# #ecree an#

ma/e as ar! o% !he 'aw o% !he 'an# !he %o''owin,)Se)*on 1. Short Title. This 9ecree sha'' "e /nown as !he Trus! Recei!s ?aw.

Se)*on 2. Declaration of Policy. I! is here"y #ec'are# !o "e !he o'icy o% !he s!a!e

*a+ !o encoura,e an# romo!e !he use o% !rus! recei!s as an a##i!iona' an#

con(enien! ai# !o commerce an# !ra#e& *"+ !o ro(i#e %or !he re,u'a!ion o% !rus!

recei!s !ransac!ions in or#er !o assure !he ro!ec!ion o% !he ri,h!s an# en%orcemen!

o% o"'i,a!ions o% !he ar!ies in(o'(e# !herein& an# *c+ !o #ec'are !he misuse an#Lor

misaroria!ion o% ,oo#s or rocee#s rea'i0e# %rom !he sa'e o% ,oo#s- #ocumen!s

or ins!rumen!s re'ease# un#er !rus! recei!s as a crimina' oense unisha"'e un#er

Ar!ic'e Three hun#re# an# %!een o% !he Re(ise# Pena' Co#e.

Se)*on 3. Denition of terms. As use# in !his 9ecree- un'ess !he con!e6! o!herwisere3uires- !he !erm

*a+


15/22


16/22

Se)*on 5. Form of trust receipts; contents. A !rus! recei! nee# no! "e in any

ar!icu'ar %orm- "u! e(ery such recei! mus! su"s!an!ia''y con!ain *a+ a #escri!ion

o% !he ,oo#s- #ocumen!s or ins!rumen!s su"ec! o% !he !rus! recei!& *$+ !he !o!a'

in(oice (a'ue o% !he ,oo#s an# !he amoun! o% !he #ra%! !o "e ai# "y !he en!rus!ee&

*4+ an un#er!a/in, or a commi!men! o% !he en!rus!ee *a+ !o ho'# in !rus! %or !he

en!rus!er !he ,oo#s- #ocumen!s or ins!rumen!s !herein #escri"e#& *"+ !o #isose o%!hem in !he manner ro(i#e# %or in !he !rus! recei!& an# *c+ !o !urn o(er !he

rocee#s o% !he sa'e o% !he ,oo#s- #ocumen!s or ins!rumen!s !o !he en!rus!er !o !he

e6!en! o% !he amoun! owin, !o !he en!rus!er or as aears in !he !rus! recei! or !o

re!urn !he ,oo#s- #ocumen!s or ins!rumen!s in !he e(en! o% !heir non7sa'e wi!hin !he

erio# secie# !herein.

The !rus! recei! may con!ain o!her !erms an# con#i!ions a,ree# uon "y !he

ar!ies in a##i!ion !o !hose hereina"o(e enumera!e# ro(i#e# !ha! such !erms an#

con#i!ions sha'' no! "e con!rary !o !he ro(isions o% !his 9ecree- any e6is!in, 'aws-

u"'ic o'icy or mora's- u"'ic or#er or ,oo# cus!oms.

Se)*on 4. Currency in which a trust receipt may be denominated. A !rus! recei!may "e #enomina!e# in !he Phi'iine currency or any %orei,n currency acce!a"'e

an# e'i,i"'e as ar! o% in!erna!iona' reser(es o% !he Phi'iines- !he ro(isions o%

e6is!in, 'aw- e6ecu!i(e or#ers- ru'es an# re,u'a!ions !o !he con!rary

no!wi!hs!an#in,) Pro(i#e#- howe(er- Tha! in !he case o% !rus! recei!s #enomina!e#

in %orei,n currency- aymen! sha'' "e ma#e in i!s e3ui(a'en! in Phi'iine currency

comu!e# a! !he re(ai'in, e6chan,e ra!e on !he #a!e !he rocee#s o% sa'e o% !he

,oo#s- #ocumen!s or ins!rumen!s he'# in !rus! "y !he en!rus!ee are !urne# o(er !o

!he en!rus!er or on such o!her #a!e as may "e s!iu'a!e# in !he !rus! recei! or o!her

a,reemen!s e6ecu!e# "e!ween !he en!rus!er an# !he en!rus!ee.

Se)*on 7. Rihts of the entruster. The en!rus!er sha'' "e en!i!'e# !o !he rocee#s

%rom !he sa'e o% !he ,oo#s- #ocumen!s or ins!rumen!s re'ease# un#er a !rus! recei!

!o !he en!rus!ee !o !he e6!en! o% !he amoun! owin, !o !he en!rus!er or as aears in

!he !rus! recei!- or !o !he re!urn o% !he ,oo#s- #ocumen!s or ins!rumen!s in case o%

non7sa'e- an# !o !he en%orcemen! o% a'' o!her ri,h!s con%erre# on him in !he !rus!

recei! ro(i#e# such are no! con!rary !o !he ro(isions o% !his 9ecree.

The en!rus!er may cance' !he !rus! an# !a/e ossession o% !he ,oo#s- #ocumen!s or

ins!rumen!s su"ec! o% !he !rus! or o% !he rocee#s rea'i0e# !here%rom a! any !ime

uon #e%au'! or %ai'ure o% !he en!rus!ee !o com'y wi!h any o% !he !erms an#

con#i!ions o% !he !rus! recei! or any o!her a,reemen! "e!ween !he en!rus!er an#

!he en!rus!ee- an# !he en!rus!er in ossession o% !he ,oo#s- #ocumen!s or

ins!rumen!s may- on or a%!er #e%au'!- ,i(e no!ice !o !he en!rus!ee o% !he in!en!ion !ose''- an# may- no! 'ess !han (e #ays a%!er ser(in, or sen#in, o% such no!ice- se''

!he ,oo#s- #ocumen!s or ins!rumen!s a! u"'ic or ri(a!e sa'e- an# !he en!rus!er

may- a! a u"'ic sa'e- "ecome a urchaser. The rocee#s o% any such sa'e- whe!her

u"'ic or ri(a!e- sha'' "e a'ie# *a+ !o !he aymen! o% !he e6enses !hereo%& *"+ !o

!he aymen! o% !he e6enses o% re7!a/in,- /eein, an# s!orin, !he ,oo#s-

#ocumen!s or ins!rumen!s& *c+ !o !he sa!is%ac!ion o% !he en!rus!ee>s in#e"!e#ness !o

!he en!rus!er. The en!rus!ee sha'' recei(e any sur'us "u! sha'' "e 'ia"'e !o !he

en!rus!er %or any #eciency. No!ice o% sa'e sha'' "e #eeme# su2cien!'y ,i(en i% in

wri!in,- an# ei!her ersona''y ser(e# on !he en!rus!ee or sen! "y os!7ai# or#inary

mai' !o !he en!rus!ee>s 'as! /nown "usiness a##ress.Se)*on . !ntruster not responsible on sale by entrustee. The en!rus!er ho'#in, a

securi!y in!eres! sha'' no!- mere'y "y (ir!ue o% such in!eres! or ha(in, ,i(en !he

en!rus!ee 'i"er!y o% sa'e or o!her #isosi!ion o% !he ,oo#s- #ocumen!s or ins!rumen!s

un#er !he !erms o% !he !rus! recei! !ransac!ion "e resonsi"'e as rincia' or as

(en#or un#er any sa'e or con!rac! !o se'' ma#e "y !he en!rus!ee.

Se)*on 9. "bliations of the entrustee. The en!rus!ee sha'' *1+ ho'# !he ,oo#s-

#ocumen!s or ins!rumen!s in !rus! %or !he en!rus!er an# sha'' #isose o% !hem

s!ric!'y in accor#ance wi!h !he !erms an# con#i!ions o% !he !rus! recei!& *$+ recei(e

!he rocee#s in !rus! %or !he en!rus!er an# !urn o(er !he same !o !he en!rus!er !o

!he e6!en! o% !he amoun! owin, !o !he en!rus!er or as aears on !he !rus! recei!&

*4+ insure !he ,oo#s %or !heir !o!a' (a'ue a,ains! 'oss %rom re- !he%!- i'%era,e or


17/22

o!her casua'!ies& *8+ /ee sai# ,oo#s or rocee#s !hereo% whe!her in money or

wha!e(er %orm- seara!e an# caa"'e o% i#en!ica!ion as roer!y o% !he en!rus!er&

*:+ re!urn !he ,oo#s- #ocumen!s or ins!rumen!s in !he e(en! o% non7sa'e or uon

#eman# o% !he en!rus!er& an# *;+ o"ser(e a'' o!her !erms an# con#i!ions o% !he !rus!

recei! no! con!rary !o !he ro(isions o% !his 9ecree.

Se)*on 16. #iability of entrustee for loss. The ris/ o% 'oss sha'' "e "orne "y !heen!rus!ee. ?oss o% ,oo#s- #ocumen!s or ins!rumen!s which are !he su"ec! o% a !rus!

recei!- en#in, !heir #isosi!ion- irresec!i(e o% whe!her or no! i! was #ue !o !he

%au'! or ne,'i,ence o% !he en!rus!ee- sha'' no! e6!in,uish his o"'i,a!ion !o !he

en!rus!er %or !he (a'ue !hereo%.

Se)*on 11. Rihts of purchaser for $alue and in ood faith. Any urchaser o% ,oo#s

%rom an en!rus!ee wi!h ri,h! !o se''- or o% #ocumen!s or ins!rumen!s !hrou,h !heir

cus!omary %orm o% !rans%er- who "uys !he ,oo#s- #ocumen!s- or ins!rumen!s %or

(a'ue an# in ,oo# %ai!h %rom !he en!rus!ee- ac3uires sai# ,oo#s- #ocumen!s or

ins!rumen!s %ree %rom !he en!rus!er>s securi!y in!eres!.

Se)*on 12. %alidity of entruster&s security interest as aainst creditors. Theen!rus!er>s securi!y in!eres! in ,oo#s- #ocumen!s- or ins!rumen!s ursuan! !o !he

wri!!en !erms o% a !rus! recei! sha'' "e (a'i# as a,ains! a'' cre#i!ors o% !he en!rus!ee

%or !he #ura!ion o% !he !rus! recei! a,reemen!.

Se)*on 13. Penalty clause. The %ai'ure o% an en!rus!ee !o !urn o(er !he rocee#s o%

!he sa'e o% !he ,oo#s- #ocumen!s or ins!rumen!s co(ere# "y a !rus! recei! !o !he

e6!en! o% !he amoun! owin, !o !he en!rus!er or as aears in !he !rus! recei! or !o

re!urn sai# ,oo#s- #ocumen!s or ins!rumen!s i% !hey were no! so'# or #isose# o% in

accor#ance wi!h !he !erms o% !he !rus! recei! sha'' cons!i!u!e !he crime o% es!a%a-

unisha"'e un#er !he ro(isions o% Ar!ic'e Three hun#re# an# %!een- ara,rah one

*"+ o% Ac! Num"ere# Three !housan# ei,h! hun#re# an# %!een- as amen#e#-

o!herwise /nown as !he Re(ise# Pena' Co#e. I% !he (io'a!ion or oense is commi!!e#

"y a corora!ion- ar!nershi- associa!ion or o!her uri#ica' en!i!ies- !he ena'!y

ro(i#e# %or in !his 9ecree sha'' "e imose# uon !he #irec!ors- o2cers- em'oyees

or o!her o2cia's or ersons !herein resonsi"'e %or !he oense- wi!hou! reu#ice !o

!he ci(i' 'ia"i'i!ies arisin, %rom !he crimina' oense.

Se)*on 1. Cases not co$ered by this Decree. Cases no! ro(i#e# %or in !his

9ecree sha'' "e ,o(erne# "y !he a'ica"'e ro(isions o% e6is!in, 'aws.

Se)*on 15. Separability clause. I% any ro(ision or sec!ion o% !his 9ecree or !he

a'ica!ion !hereo% !o any erson or circums!ance is he'# in(a'i#- !he o!her

ro(isions or sec!ions hereo% an# !he a'ica!ion o% such ro(isions or sec!ions !o

o!her ersons or circums!ances sha'' no! "e aec!e# !here"y.Se)*on 14. Repealin clause. A'' Ac!s inconsis!en! wi!h !his 9ecree are here"y

reea'e#.

Se)*on 17. This Decree shall ta'e e(ect immediately.

9one in !he Ci!y o% ani'a- !his $D!h #ay o% anuary- in !he year o% Our ?or#-

nine!een hun#re# an# se(en!y7!hree.

Re:,;-* A) No. 762 ,ne 13# 1991

AN ACT TO PRO%OTE $OREI"N IN'EST%ENTS# PRESCRIBE THE

PROCE&URES $OR RE"ISTERIN" ENTERPRISES &OIN" BUSINESS IN THE

PHILIPPINES# AN& $OR OTHER PURPOSES)e it enacted by the Senate and *ouse of Representati$es of the Philippines in

Conress assembled+)

Se)*on 1. Title. 7 This Ac! sha'' "e /nown as !he-


18/22

en!errises !ha! si,nican!'y e6an# 'i(e'ihoo# an# em'oymen! oor!uni!ies %or

Fi'iinos& enhance economic (a'ue o% %arm ro#uc!s& romo!e !he we'%are o% Fi'iino

consumers& e6an# !he scoe- 3ua'i!y an# (o'ume o% e6or!s an# !heir access !o

%orei,n mar/e!s& an#Lor !rans%er re'e(an! !echno'o,ies in a,ricu'!ure- in#us!ry an#

suor! ser(ices. Forei,n in(es!men!s sha'' "e we'come as a su'emen! !o Fi'iino

cai!a' an# !echno'o,y in !hose en!errises ser(in, main'y !he #omes!ic mar/e!.As a ,enera' ru'e- !here are no res!ric!ions on e6!en! o% %orei,n ownershi o% e6or!

en!errises. In #omes!ic mar/e! en!errises- %orei,ners can in(es! as much as one

hun#re# ercen! *1M+ e3ui!y e6ce! in areas inc'u#e# in !he ne,a!i(e 'is!. Forei,n

owne# rms ca!erin, main'y !o !he #omes!ic mar/e! sha'' "e encoura,e# !o

un#er!a/e measures !ha! wi'' ,ra#ua''y increase Fi'iino ar!icia!ion in !heir

"usinesses "y !a/in, in Fi'iino ar!ners- e'ec!in, Fi'iinos !o !he "oar# o% #irec!ors-

im'emen!in, !rans%er o% !echno'o,y !o Fi'iinos- ,enera!in, more em'oymen! %or

!he economy an# enhancin, s/i''s o% Fi'iino wor/ers.

Se)*on 3. Denitions. 7 As use# in !his Ac!)

a+ The !erm


19/22

Se)*on . Sco!e. 7 This Ac! sha'' no! a'y !o "an/in, an# o!her nancia'

ins!i!u!ions which are ,o(erne# an# re,u'a!e# "y !he @enera' 5an/in, Ac! an# o!her

'aws un#er !he suer(ision o% !he Cen!ra' 5an/.

Se)*on 5. "egistration of Investments of #on$P%ili!!ine #ationals. 7

Wi!hou! nee# o% rior aro(a'- a non7Phi'iine na!iona'- as !ha! !erm is #ene# in

Sec!ion 4 a+- an# no! o!herwise #is3ua'ie# "y 'aw may uon re,is!ra!ion wi!h !heSecuri!ies an# E6chan,e Commission *SEC+- or wi!h !he 5ureau o% Tra#e Re,u'a!ion

an# Consumer Pro!ec!ion *5TRCP+ o% !he 9ear!men! o% Tra#e an# In#us!ry in !he

case o% sin,'e rorie!orshis- #o "usiness as #ene# in Sec!ion 4 *#+ o% !his Ac! or

in(es! in a #omes!ic en!errise u !o one hun#re# ercen! *1M+ o% i!s cai!a'-

un'ess ar!icia!ion o% non7Phi'iine na!iona's in !he en!errise is rohi"i!e# or

'imi!e# !o a sma''er ercen!a,e "y e6is!in, 'aw an#Lor 'imi!e# !o a sma''er

ercen!a,e "y e6is!in, 'aw an#Lor un#er !he ro(isions o% !his Ac!. The SEC or

5TRCP- as !he case may "e- sha'' no! imose any 'imi!a!ions on !he e6!en! o% %orei,n

ownershi in an en!errise a##i!iona' !o !hose ro(i#e# in !his Ac!) Pro(i#e#-

howe(er- Tha! any en!errise see/in, !o a(ai' o% incen!i(es un#er !he Omni"usIn(es!men! Co#e o% 1DB= mus! a'y %or re,is!ra!ion wi!h !he 5oar# o% In(es!men!s

*5OI+- which sha'' rocess such a'ica!ion %or re,is!ra!ion in accor#ance wi!h !he

cri!eria %or e(a'ua!ion rescri"e# in sai# Co#e) Pro(i#e#- na''y- Tha! a non7

Phi'iine na!iona' in!en#in, !o en,a,e in !he same 'ine o% "usiness as an e6is!in,

oin! (en!ure in his a'ica!ion %or re,is!ra!ion wi!h SEC. 9urin, !he !ransi!ory erio#

as ro(i#e# in Sec!ion 1: hereo%- SEC sha'' #isa''ow re,is!ra!ion o% !he a'yin, non7

Phi'iine na!iona' i% !he e6is!in, oin! (en!ure en!errise- ar!icu'ar'y !he Fi'iino

ar!ners !herein- can reasona"'y ro(e !hey are caa"'e !o ma/e !he in(es!men!

nee#e# %or !hey are come!in, a'ican!. Uon eec!i(i!y o% !his Ac!- SEC sha''

eec! re,is!ra!ion o% any en!errise a'yin, un#er !his Ac! wi!hin %!een *1:+ #ays

uon su"mission o% com'e!e# re3uiremen!s.

Se)*on 4. Foreign Investments in &'!ort &nter!rises. 7 Forei,n in(es!men! in

e6or! en!errises whose ro#uc!s an# ser(ices #o no! %a'' wi!hin ?is!s A an# 5 o%

!he Forei,n In(es!men! Ne,a!i(e ?is! ro(i#e# un#er Sec!ion B hereo% is a''owe# u

!o one hun#re# ercen! *1M+ ownershi.

E6or! en!errises which are non7Phi'iine na!iona's sha'' re,is!er wi!h 5OI an#

su"mi! !he reor!s !ha! may "e re3uire# !o ensure con!inuin, com'iance o% !he

e6or! en!errise wi!h i!s e6or! re3uiremen!. 5OI sha'' a#(ise SEC or 5TRCP- as !he

case may "e- o% any e6or! en!errise !ha! %ai's !o mee! !he e6or! ra!io

re3uiremen!. The SEC or 5TRCP sha'' !hereuon or#er !he non7com'yin, e6or!

en!errise !o re#uce i!s sa'es !o !he #omes!ic mar/e! !o no! more !han %or!y ercen!*8M+ o% i!s !o!a' ro#uc!ion& %ai'ure !o com'y wi!h such SEC or 5TRCP or#er-

wi!hou! us!ia"'e reason- sha'' su"ec! !he en!errise !o cance''a!ion o% SEC or

5TRCP re,is!ra!ion- an#Lor !he ena'!ies ro(i#e# in Sec!ion 18 hereo%.

Se)*on 7. Foreign Investments in Domestic (arket &nter!rises. 7 Non7

Phi'iine na!iona's may own u !o one hun#re# ercen! *1M+ o% #omes!ic mar/e!

en!errises un'ess %orei,n ownershi !herein is rohi"i!e# or 'imi!e# "y e6is!in, 'aw

or !he Forei,n In(es!men! Ne,a!i(e ?is! un#er Sec!ion B hereo%.

A #omes!ic mar/e! en!errise may chan,e i!s s!a!us !o e6or! en!errise i% o(er a

!hree *4+ year erio# i! consis!en!'y e6or!s in each year !hereo% si6!y er cen!

*;M+ or more o% i!s ou!u!.Se)*on . )ist of Investment Areas "eserved to P%ili!!ine

#ationals (Foreign Investment #egative )ist !. 7 The Forei,n In(es!men!

Ne,a!i(e ?is! sha'' ha(e !hree *4+ comonen! 'is!s) A- 5- an# C)

a+ ?is! A sha'' enumera!e !he areas o% ac!i(i!ies reser(e# !o Phi'iine na!iona's "y

man#a!e o% !he Cons!i!u!ion an# secic 'aws.

"+ ?is! 5 sha'' con!ain !he areas o% ac!i(i!ies an# en!errises ursuan! !o 'aw)

1+ Which are #e%ense7re'a!e# ac!i(i!ies- re3uirin, rior c'earance an# au!hori0a!ion

%rom 9ear!men! o% Na!iona' 9e%ense *9N9+ !o en,a,e in such ac!i(i!y- such as !he

manu%ac!ure- reair- s!ora,e an#Lor #is!ri"u!ion o% rearms- ammuni!ion- 'e!ha'

weaons- mi'i!ary or#nance- e6'osi(es- yro!echnics an# simi'ar ma!eria's& un'esssuch manu%ac!urin, or reair ac!i(i!y is secica''y au!hori0e#- wi!h a su"s!an!ia'


20/22


21/22

which re!ains !he ri,h! an# so'e resonsi"i'i!y !o #e!ermine whe!her !o recommen#

!o !he Presi#en! !o romu',a!e !he area o% in(es!men! in ?is! C o% !he Ne,a!i(e ?is!.

An in#us!ry or area o% in(es!men! inc'u#e# in ?is! C o% !he Ne,a!i(e ?is! "y

Presi#en!ia' Proc'ama!ion sha'' remain in !he sai# ?is! C %or !wo *$+ years- wi!hou!

reu#ice !o re7inc'usion uon new e!i!ion- an# #ue rocess.

Se)*on 16. Strategic Industries. 7 Wi!hin ei,h!een *1B+ mon!hs a%!er !heeec!i(i!y o% !his Ac!- !he NE9A 5oar# sha'' %ormu'a!e an# u"'ish a 'is! o% in#us!ries

s!ra!e,ic !o !he #e(e'omen! o% !he economy. The 'is! sha'' seci%y- as a ma!!er o%

o'icy an# no! as a 'e,a' re3uiremen!- !he #esire# e3ui!y ar!icia!ion "y

@o(ernmen! an#Lor ri(a!e Fi'iino in(es!ors in each s!ra!e,ic in#us!ry. Sai# 'is! o%

s!ra!e,ic in#us!ries- as we'' as !he correson#in, #esire# e3ui!y ar!icia!ion o%

,o(ernmen! an#Lor ri(a!e Fi'iino in(es!ors- may "e amen#e# "y NE9A !o reec!

chan,es in economic nee#s an# o'icy #irec!ions o% @o(ernmen!. The amen#e# 'is!

o% s!ra!e,ic in#us!ries sha'' "e u"'ishe# concurren!'y wi!h u"'ica!ion o% !he Forei,n

In(es!men! Ne,a!i(e ?is!.

The !erm


22/22

9urin, !he ini!ia' !ransi!ory erio# o% !hir!y7si6 *4;+ mon!hs a%!er issuance o% !he

Ru'es an# Re,u'a!ions !o im'emen! !his Ac!- !he Transi!ory Forei,n In(es!men!

Ne,a!i(e ?is! sha'' consis! o% !he %o''owin,)

A. ?is! A)

1. A'' areas o% in(es!men! in which %orei,n ownershi is 'imi!e# "y man#a!e o%

Cons!i!u!ion an# secic 'aws.5. ?is! 5)

1. anu%ac!ure- reair- s!ora,e an#Lor #is!ri"u!ion o% rearms- ammuni!ions- 'e!ha'

weaons- mi'i!ary or#inance- e6'osi(es- yro!echnics an# simi'ar ma!eria's re3uire#

"y 'aw !o "e 'icense# "y an# un#er !he con!inuin, re,u'a!ion o% !he 9ear!men! o%

Na!iona' 9e%ense& un'ess such manu%ac!urin, or reair ac!i(i!y is secica''y

au!hori0e# wi!h a su"s!an!ia' e6or! comonen!- !o a non7Phi'iine na!iona' "y !he

Secre!ary o% Na!iona' 9e%ense&

$. anu%ac!ure an# #is!ri"u!ion o% #an,erous #ru,s& a'' %orms o% ,am"'in,&

ni,h!c'u"s- "ars- "eerhouses- #ance ha''s& sauna an# s!eam "a!hhouses- massa,e

c'inic an# o!her 'i/e ac!i(i!ies re,u'a!e# "y 'aw "ecause o% ris/s !hey may ose !ou"'ic hea'!h an# mora's&

4. Sma'' an# me#ium7si0e #omes!ic mar/e! en!errises wi!h ai#7in e3ui!y cai!a' or

'ess !han !he e3ui(a'en! o% US:-- un'ess !hey in(o'(e a#(ance# !echno'o,y

as #e!ermine# "y !he 9ear!men! o% Science an# Techno'o,y- an#

8. E6or! en!errises which u!i'i0e raw ma!eria's %rom #e'e!in, na!ura' resources-

an# wi!h ai#7in e3ui!y cai!a' o% 'ess !han !he e3ui(a'en! US:-.

C. ?is! C)

1. Imor! an# who'esa'e ac!i(i!ies no! in!e,ra!e# wi!h ro#uc!ion or manu%ac!ure o%

,oo#s&

$. Ser(ices re3uirin, a 'icense or secic au!hori0a!ion- an# su"ec! !o con!inuin,re,u'a!ions "y na!iona' ,o(ernmen! a,encies o!her !han 5OI an# SEC which a! !he

!ime o% eec!i(i!y o% !his Ac! are res!ric!e# !o Phi'iine na!iona's "y e6is!in,

a#minis!ra!i(e re,u'a!ions an# rac!ice o% !he re,u'a!ory a,encies concerne#)

Pro(i#e#- Tha! a%!er eec!i(i!y o% !his Ac!- no o!her ser(ices sha'' "e a##i!iona''y

su"ec!e# !o such res!ric!ions on na!iona'i!y o% ownershi "y !he correson#in,

re,u'a!ory a,encies- an# such res!ric!ions once remo(e# sha'' no! "e reimose#&

an#

4. En!errises owne# in !he maori!y "y a %orei,n 'icensor an#Lor i!s a2'ia!es %or !he

assem"'y- rocessin, or manu%ac!ure o% ,oo#s %or !he #omes!ic mar/e! which are

"ein, ro#uce# "y a Phi'iine na!iona' as o% !he #a!e o% eec!i(i!y o% !his Ac! un#er

a !echno'o,y- /now7how an#Lor "ran# name 'icense %rom such 'icensor #urin, !he

!erm o% !he 'icense a,reemen!) Pro(i#e#- Tha!- !he 'icense is #u'y re,is!ere# wi!h

!he Cen!ra' 5an/ an#Lor !he Techno'o,y Trans%er 5oar# an# is oera!i(e'y in %orce as

o% !he #a!e o% eec!i(i!y o% !his Ac!.

NE9A sha'' ma/e !he enumera!ion as aroria!e o% !he areas o% !he in(es!men!

co(ere# in !his Transi!ory Forei,n In(es!men! Ne,a!i(e ?is! an# u"'ish !he Ne,a!i(e

?is! in %u'' a! !he same !ime as- or rior !o- !he u"'ica!ion o% !he ru'es an#

re,u'a!ions !o im'emen! !his Ac!.

The areas o% in(es!men! con!aine# in ?is! C a"o(e sha'' "e reser(e# !o Phi'iine

na!iona's on'y #urin, !he !ransi!ory erio#. The inc'usion o% any o% !hem in !he

re,u'ar Ne,a!i(e ?is! wi'' re3uire #e!ermina!ion "y NE9A a%!er #ue u"'ic hearin,s!ha! such inc'usion is warran!e# un#er !he cri!eria se! %or!h in Sec!ion B an# D

hereo%.

Se)*on 14. "e!ealing *lause. 7 Ar!ic'es %or!y7%our *88+ !o %!y7si6 *:;+ o% 5oo/ II

o% E6ecu!i(e Or#er No. $$; are here"y reea'e#.

A'' o!her 'aws or ar!s o% 'aws inconsis!en! wi!h !he ro(isions o% !his Ac! are here"y

reea'e# or mo#ie# accor#in,'y.

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