Chapter IV Possession in Trust |
| Article 32 |
（Definition of possession in trust）Possession in trust means a transaction in which a trustor provides funds or credit to a trustee, and a claim is secured with ownership of the subject personal property originally placed in trust, while the trustee takes possession of and disposes the property under a trust receipt. |
| Article 33 |
（Items to be specified on trust receipts）A trust receipt shall specify the following matters:
1. The names of the individuals or entities who are parties to the trust receipt and their residences, domiciles, or places of business.
2. The amount of funds or credit that the trustor agrees to provide to the trustee.
3. The name, quantity, and price of the subject property and the place where it is stored; the description of the specific serial number, identifying mark, or specification of the property, if there is any.
4. A statement that the trustor retains ownership of the subject property and the manner in which the trustee takes possession of and disposes the subject property.
5. The method for repayment of the funds or credit provided and a statement that if the trustee sells the subject property, the buyer shall deliver to the trustor a portion of the sale price equivalent to the amount listed under subparagraph 2.
6. The method by which the trustor will exercise rights in rem and creditor's rights if the trustee fails to perform the contract.
7. If there is insurance, a statement that the beneficiary of the insurance shall be the trustor.
8. The date of entering into the trust receipt. |
| Article 34 |
（Trustor’s retrieval and occupation）If the trustee has any of the following doings, the trustor may retrieve and take possession of the subject property:
1. Fails to satisfy the debt as stipulated.
2. Relocates the subject property without the trustor's consent.
3. Creates a pledge or a mortgage on the subject property.
4. Fails to dispose the subject property by the stipulated method. |
| Article 35 |
（Trustor's liability upon consenting to the sale of subject property）If the trustor consents to a sale by the trustee of the subject property, whether or not registered, the trustor bears no liability as seller, nor any liability for debts incurred in the disposal of the property by the trustee.
The trustor may not assert ownership rights over the property that secures the claim against a buyer of the property, provided that this shall not apply to a buyer in a case in which there are stipulated restrictions on the disposition of the property or the method of satisfaction., of which the buyer has knowledge. |
| Article 36 |
（Property that may not be the subject property of possession in trust）Personal property upon which a mortgage has been created in accordance with this Act may not be the subject property of possession in trust.
A trust receipt that violates the preceding paragraph shall be void. |
| Article 37 |
（Mutatis mutandis application of procedures for retrieval, possession, and resale of the subject property and of liability provisions）The provisions of Chapter II, Article 17, paragraphs 2 and 3 and Articles 18 to 22 shall apply mutatis mutandis to the trustor and trustee in possession of the trust. |