What constitutes a trust receipt transaction
. — A trust receipt transaction, withinthe meaning of this Decree, is
by and between a person referred to inthis Decree as the entruster, and another person referred to in this Decree as theentrustee,
whereby the entruster, who owns or holds absolute title
or security interests
over certain specified goods
documents or instruments,
releases the same to the possession of the entrustee upon the latter's execution and delivery
to the entruster of
called a "trust receipt"
wherein the entrustee binds himself to hold thedesignated goods,
documents or instruments in
trust for the entruster
and to sell or otherwise dispose of the
, documents or instruments
with the obligation to turnover to the entruster the proceeds thereof
to the extent of the amount owing to theentruster or as appears in the trust receipt
or the goods
, documents or instruments
themselves if they are unsold or not otherwise disposed of,
in accordance with the termsand conditions specified in the trust receipt, . . . .
G.R. No. 130365. July 14, 2000STATE INVESTMENT HOUSE, INCORPORATED,
COURT OF APPEALS,PHILIPPINE NATIONAL BANK and SPOUSES FEDERICO L. FRANCO and FELICISIMAR. FRANCO,
FACTS : Private respondent filed an interpleader to the trial court to determine to whom theyshould continue paying the amounts in the promissory note whom they issued to Delta Motor Corporation (DMC), from whom they purchased a four units of M.A.N. Diesel Long DistanceTouring Coaches. The State Investment House, Inc. (SIHI) claimed that they are entitled tothe promissory note because DMC executed in favor of SIHI a deed of sale of variousaccount receivable including the subject promissory note to settle his loan to SIHI.While PNB, on the other hand, claimed over the promissory note is based on letter of creditgranted by PNB to MDC to finance the importation of 325 units of M.A.N. diesel bus chassis,which supposedly include the four units sold by DMC to the private respondent. PNB andDMC entered a Trust Receipt Agreement after DMC took possession of the units.UBP, in turn, obtained a Writ of Garnishment as a result of a judgment against DMC. UBPasserted rights over the promissory notes by virtue of said writ.The court ruled that SIHI’s claims over the promissory notes were superior to those of PNBand UBP. It does not appear that UBP questioned the decision of the RTC. PNB, for its part,appealed to the Court of Appeals. CA reversed the decision of the RTC and declared PNB’sclaims superior to those of SIHI. It held that under Section 9 of the Trust Receipts Law, DMCwas merely an entrustee of the products imported and, thus, obliged to turn over to itsentruster, PNB, the proceeds of the sale of said products. The Court of Appeals deniedSIHI’s motion for reconsideration. Hence, this petition.ISSUE : Whether or not the goods released under the trust receipt include the vehiclespurchased by the Franco spouses from DMC and for which the promissory notes wereissued?RULINGS : The evidence for PNB fails to establish that the vehicles sold to the Francoswere among those covered by the trust receipts. As petitioner points out, neither the trustreceipts covering the units imported nor the corresponding bills of lading contain the chassisand engine numbers of the vehicles in question.