In the case of TR, the buyer must keep the goods safely and separately from other stocks. The buyer acts as the bank`s agent for the storage and sale of the goods. Even if the title or ownership of the property remains in the bank, the buyer has the property. The buyer can do something with the merchandise or the estate as long as he (or she) does not violate the terms of the contract with the bank. A: The Entrustee. A confirmation of trust has two functions, credit and security functions. The loan is obtained by the fact that the pet financed the importation or purchase of the goods under TR. Until and until this loan is paid, the obligation to pay exist. If the agent were to appear as an owner, it was only an artificial utility, more of legal fiction than the fact, because if that were really the case, he could throw away the goods in one way or another that he wants, which he cannot do.
Considering the Entrustee as a true owner at the beginning of the transaction would not take into account the loan function. (Rosario Textile Mills Corp. v. Home Bankers Savings and Trust Company, G.R. No. 137232. June 29, 2005) What if the Entruste does not live up to its commitments? Loans against the trust`s supporting documents or the LATR are facilities that the bank gives to its client, usually an importer of goods or assets. This is essentially a short-term loan against Trust Receipt, which allows the importer to make the payment to the seller. The bank retains ownership of the goods. A buyer can recover the property after repaying the loan amount. Although the LATR installation is generally available for short term for 90 days, it can be extended to one year under special circumstances.
Maturity under fiduciary income is short-term and ranges from 30 to 180 days. At maturity, the client must repay the loan to the lender with interest determined according to the terms of the trust title. The bank must be reimbursed at the time of maturity or after the sale of the goods, depending on what happens earlier. If the bank has not received a payment after the due date or if the company is in late payment at the time of payment of its advances, the bank could take back the goods and sell them. A: A trust agreement has its own specificities. As part of this institution, a bank extends a loan covered by the letter of credit, with proof of confidence in the loan guarantee. In other words, the booking includes a credit function represented by the letter of credit and a security feature that is found in the trust device. Therefore, proof of trust is a security contract under which a bank acquires a „security interest“ in the goods. It guarantees debt and there can be no interest in security that would not secure any obligation.