Question & AnswerQ&A (Act No. 3952)
The short title of Act No. 3952 is "The Bulk Sales Law."
A sale, transfer, mortgage, or assignment of a stock of goods, wares, merchandise, provisions, or materials otherwise than in the ordinary course of trade and the regular prosecution of the business, or a sale of all or substantially all of the business, trade, fixtures, or equipment, is deemed a sale and transfer in bulk under this Act.
If the vendor, mortgagor, transferor, or assignor produces and delivers a written waiver of the provisions of this Act from his creditors as shown by verified statements, the provisions of the bulk sale section shall not apply.
The vendor must, before receiving any part of the purchase price, deliver a sworn written statement identifying all creditors and the amounts due them to the vendee or mortgagee or their authorized representatives.
It must contain the names and addresses of all creditors of the vendor or mortgagor, the amount due or to become due to each creditor, and it must be verified under oath.
Such a sale, transfer, or mortgage shall be deemed fraudulent and void and the vendor shall be deemed to have violated the Bulk Sales Law.
The vendor must make a full detailed inventory showing quantities and cost prices of articles and notify every creditor listed in the sworn statement at least ten days before transferring possession, either personally or by registered mail.
The vendor shall be deemed to have violated the provisions of the Act and may be subject to penalties provided under the law.
No, it is unlawful under Section 7 of the law to transfer title to goods in bulk without consideration or for nominal consideration only.
Executors, administrators, receivers, assignees in insolvency, or public officers acting under judicial process are exempted from this Act.
The sworn statement must be registered in the Mercantile Registry of the Bureau of Commerce and Industry.
Any person violating this Act shall, upon conviction, be punished by imprisonment from six months to five years, or fined up to five thousand pesos, or both, at the court's discretion.
The Director of the Bureau of Commerce and Industry administers the Act, empowered to prescribe rules and regulations for its enforcement with the approval of the Department Head.