The Legal Construction Of The Trustee's External Responsibility And Internal Relief

In the process of handling the trust affairs,whether the trustee's external debt will be repaid within the scope of the trust property only,and if the trustee repays with his own property,what kind of remedies do he have? Although Article 37,paragraph 1,of the Trust Law(hereinafter referred to as “this paragraph”)provides for this,it remains doubtful.From the perspective of this paragraph,this paper studies the aforementioned issues and is divided into four parts.The first part of this paper starts with the distinction between the external legal relationship and the internal legal relationship of the trust,and then determines the concept of the trustee's external responsibility and internal remedy.The external responsibility discussed in this paper refers to the civil liability of the trustee to the third party in the process of properly handling the trust.The internal remedy discussed in this paper refers to the right of the trustee to claim compensation for the trust debt that he pays the trust debt in advance with his own property.Judging from the legislative process and the judicial application of this paragraph,the scope of the responsibility property of external responsibility has not been modified,and the application is not uniform in judicial practice.Regarding the provisions of the trustee's internal remedy,no dispute case has been found in judicial practice,but there have been major changes in the legislation.The second part of this paper takes this paragraph as the core and studies the scope of the responsibility property of external responsibility.Theoretically speaking,there are three viewpoints.The first view is that the provisions of this paragraph are not clear,that is the so-called “doctrine of ambiguity”.The second view is that the provisions of this paragraph indicate that the trustee only pays off debts within the scope of trust property in principle,which is generally referred to as the “limited liability theory”.The third view holds that the scope of responsibility property of the trustee to pay off the trust debts shall include his own property,which is generally referred to as the “unlimited liability theory”.In the comparative law,the early Anglo-American law system took the principle of “trustee bears unlimited liability”.In the subsequent development,the English law still adhered to the principle of unlimited liability,while the American law was transformed into the principle of limited liability.The general statements of Japan and China's Taiwan region all agree on the principle of unlimited liability,with the exception of special agreements.The revision of Japan's Trust Law in 2006 also innovatively provided a limited liability trust.This paper combines the above-mentioned theoretical viewpoint and comparative law,carries on the legal explanation to this paragraph,draws the conclusion that the trustee's external responsibility in China is based on the principle of unlimited liability,however,the order of repayment of the trust liability assets must be differentiated according to the third party's good faith.The third part of this paper mainly studies the internal remedies of trustees after they have paid off their trust debts with their own assets.This paragraph only stipulates the trustee's priority right of recourse to the trust property,but it does not specify the priority effect.This paper considers that the essence of this right is a kind of priority.It only takes precedence over the general trust debt,but does not take precedence over the security real right established in the trust property.After the termination of the trust,the trustee can enjoy a lien on the trust property.At this time,the priority right of repayment is converted into a lien and its priority effect applies to the general rules of the security interest.There is still a loophole that the Trust Law does not stipulate the trustee's right of claim against beneficiaries and clients.This paper holds that the beneficiary should bear the statutory compensation obligation for the trustee to the extent that the trust property cannot be fully compensated,and subject to the limitation of time limit.The client has no statutory compensation obligation,but there is liability for warranty against defects that guarantees that the trust property is agreed.According to the principle of party autonomy,the parties to the trust may agree otherwise on the trustee's internal remedies.The fourth part of this paper starts from the dilemma of the application of this paragraph,and then puts forward relevant suggestions.The current dilemma of this paragraph includes the unclear provisions on the trustee's external responsibility and the incomplete provisions on the trustee's internal remedy.This paper considers that with respect to external responsibilities,the future revision of this paragraph should make it clear that the trustee's external repayment of trust debt shall not be limited to the trust property.If the third party knows or should know the existence of the trust,the third party may request the trustee to supplement the payment with his own property when the trust property cannot be fully paid.If the third party does not know and should not know the existence of the trust,the third party may not distinguish between the trust property and the trustee's inherent property to demand repayment of the trust debt.The trustee may also negotiate with third parties to limit or exempt his personal responsibility according to the principle of party autonomy.At this stage of China's trust development,it is not appropriate to introduce the limited liability trust of the Japanese Law or the commercial trust of the United States Law.With regard to the improvement of the internal remedy system,the future revision of this paragraph should clarify the priority effect of the trustee's priority in the repayment of the trust property,increase the trustee's right to claim compensation from the beneficiary,and provide the trustee with the right of warranty against defects.