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The opening of a Letter of Credit did not vest ownership of the goods in
the bank in the absence of a trust receipt agreement. A letter of credit is a
mere financial device developed by merchants as a convenient and relatively
safe mode of dealing with the sales of goods to satisfy the seemingly
irreconcilable interests of a seller, who refuses to part with his goods before
he is paid, and a buyer, who wants to have control of the goods before
paying. (Transfield Philippines, Inc. v. Luzon Hydro Corporation, G.R. No.
146717, Nov. 22, 2004)
THREE
(3)
DISTINCT
BUT
INTERTWINED CONTRACT
RELATIONSHIPS THAT ARE INDISPENSABLE IN A LETTER OF CREDIT
TRANSACTION.
1. Between the applicant/buyer/importer and the beneficiary/seller/exporter