Chapter 14:

BULK SALES LAW

PEOPLE V WONG SZU TUNG
50 OG 4876PAREDES; March 26, 1954
NATURE
Appeal from a judgment of the CFI of Manila
FACTS
- Accused Tung (Chinese) was the owner of the Kim Tay Seng Foundry Shop in Caloocan, Rizal, built on
the land of Ocampo.
- Tung owed Ocampo over P2000 for rental of the lands, which he failed to pay, despite demands.
- Ocampo threatened to sue W ong, and ordered the closing of the shop so that no one could anything from
it.
- W hen someone (Lim Guan) offered to buy the shop, Ocampo had his lawyer prepare the deed of
sale, which W ong signed. O c a m p o r e c e i v e d t h e P 2 5 0 0 f r o m t h e s a l e a n d a p p l i e d i t a s
payment for the rentals in arrears.
- W ong was also indebted to Shurdut Mills Supply Co., Inc., fo rP1,591.25. A complaint was filed to
recover that amount, and judgment was obtained against Wong. When a representative of the Company went
to the shop to demand payment, the shop had already been sold to Lim Guan.
= Trial Court found W ong guilty of violating Section 3 o f the Bulk Sales Law, declaring that he
willfully and voluntarily sold h i s s h o p , a n d t h a t h e r e c e i v e d t h e p u r c h a s e p r i c e t h e r e o f ,
without delivering to Guan a written statement containing the
n a m e s a n d a d d r e s s e s o f h i s c r e d i t o r s a n d t h e a m o u n t s o f indebtedness due and owing
them, as required by law.
- Bulk Sales Law (Act No 3952) Section 3: It shall be the duty of every person who shall sell, mortgage,
transfer, or assign any stock of goods, wares, merchandise, provisions or materials in bulk, f o r c a s h o r
o n c r e d i t , b e f o r e receiving from the vendee, mortgagee, or his, or its agent o rrepresentative any
part of the purchase price thereof, or any promissory note, memorandum, or other evidence therefore, to
deliver to such vendee, mortgagee, or agent, or if the vendee, mortgagee, or agent be a corporation,
then to the president, vice-
p r e s i d e n t , t r e a s u r e r , s e c r e t a r y o r m a n a g e r o f s a i d corporation, or, if such vendee or
mortgagee be a partnership firm, then to a member thereafter provided, of the names and
addresses of all creditors to whom said vendor or mortgagor may be indebted, together with the
amount of indebtedness d u e o r o w i n g , o r t o b e c o m e d u e o r o w i n g b y s a i d v e n d o r o r
mortgagor to each of said creditors, which statement shall be verified by an oath to the

ISSUE
WON Wong violated Section 3 of the Bulk Sales Law

HELD NO

Reasoning-
W o n g w a s p r e s s e d t o s i g n t h e d e e d o f s a l e b y h i s c r e d i t o r Ocampo. W ith threats of closing
the shop and court action for eviction, the accused was practically forced into signing the deed of sale.
- B U T , e v e n i f h e h a d n ’ t b e e n f o r c e d t o s i g n t h e d e e d , h e s t i l l would not be criminally liable. Act
No. 3925 is penal in nature and should be construed strictly against the State. The object of sale was not covered
by the provisio n. W hat was sold was the shop
itself, together with the goodwill, credits, equipments, tools,
machineries, which are not the stock of merchandise, goods,
w a r e s , p r o v i s i o n s o r m a t e r i a l s i n b u l k c o n t e m p l a t e d i n t h e provision.
- Meaning of ‘merchandise’ accordi ng to a couple of American cases: Something that is sold
everyday, and is constantly going o u t o f t h e s t o r e a n d b e i n g r e p l a c e d b y o t h e r g o o d s ; m u s t
b e construed to mean such things as are usually bought and sold intrade by merchants
- Meaning of ‘stock’: “The common use of the term ‘stock’ whenapplied to goods in a mercantile
house refers to htose which are kept for sale.
”A “ f o u n d r y s h o p ” , w h i c h d o e s n o t s e l l m e r c h a n d i s e , i s n o t included in said law.
Disposition
W e are of the opinion that the guilt of the appellantW ong Szu Tung has not been proven beyond
reasonable doubt;consequently, the judgment appealed from is reversed, and the said appellant
acquitted, with costs
de officio