BTW, I changed it locally to check only for debian folder in parent directories and create debian/patches automatically if needed:

for d in . .. ../.. ../../.. ../../../.. ../../../../..; do
    if [ -d $d/debian ]; then
        if ! [ -d $d/debian/patches ]; then
            mkdir $d/debian/patches
        fi
        export QUILT_PATCHES=debian/patches
    fi
done

I’d rather end up with a patches dir inside the debian folder instead of having it at a random place in the package sources when adding the first quilt patch.

I wonder if we should ship this with the quilt package!?

Update: After discussion with James Vega on IRC, the quiltrc evolved into this version:

d=.
while [ ! -d "$d/debian" -a `readlink -e $d` != / ]; do
    d="$d/.."
done

if [ -d "$d/debian" ]; then
    export QUILT_PATCHES=debian/patches
    if ! [ -d $d/debian/patches ]; then
        mkdir $d/debian/patches
    fi
fi

This works with any directory depth while the original would only support 5 levels from the package base directory.