The Transplantation And Localization Of Private Trust Law

The title of this dissertation is The Transplantation and Localization of Private Trust Law. There are five chapters.Chapter One discusses the formation and development of the trusts. Part One analyses the reasons that lead to the formation of trusts. In the medieval of England, different political forces, such as the King and Christian church, the lords and the vassals, always contested for lands, which were the most important fortune in ancient era. The King laid down unreasonable laws to add charges to lands and to restrict the disposition of lands. To get round the law, people had to convey their lands to another person called feoffee who would hold the lands for the benefit of others called beneficiary. The Common Law treated it as normal land deal and didn' t accept and protect the rights of beneficiary. It was the Equity Law who gave the beneficiary the power of enforcement. But why the Chancellor who acted on the behalf of the King did so? People say that the Chancellor did that for justice and conscience, but such argument is weak and inconvincible. From my points of view, there are three reasons. Firstly, the Christianity was the beneficiaries of many trusts and could get enormous economic interests if the law protected the rights of beneficiary. Secondly, the Chancellor could enjoy the interests from trusts directly and to protect beneficiary' s right was to protect his own right. Lastly, the Chancellor was the representative of God and should stop and punish the behavior against the doxies of Christianity. So it is more rational to say that Christianity saves Trusts and Trusts saves Equity Law rather than Equity Law saves Trusts and Trusts saves Equity Law in turn. Otherwise, constitutionalism is another important factor that contributed to the rise of Trusts. The Magna Charta (1215) established a constitutional principle that the King must obey the law, so the King couldn' t stop the Chancellor to accept trusts. Then the system of Trusts established finally. Part Two introduces and concludes the broad application and some special types of trusts. Firstly, I draw a conclusion about the reasons that give trusts the endless elasticity. Secondly, we cand see this elasticityfrom two aspects. One is that trusts can be applied in almost all the areas of private law, including commercial law, property law, contract law, inheritance law and family law, etc, another is that there are some different and special types of trusts, such as discretionary trusts, protective trusts, passive trusts, secret trusts, personal purpose trusts, resulting trusts and constructive trusts.Chapter Two deals with the localization of trust law. Part One analyses the legal and ideaistic obstacles to the transplantation of trust law. First of all, the application of trusts is in contest with some traditional legal systems of our civil law, including that of agency, partnership, the restitution of property, the transferring guarantee, the retention of ownership, inheritance, family and marriage property, company, and so on. Secondly, our civil law can' t ?accept some rules of Anglo-American trust law. The duality of ownership is unacceptable to absolute and unique concept of ownership; the nominal ownership will destroy the public credibility of ownership registration; the diversity of beneficiary' s rights is contradicted with the principle which property rights should be established by law. Secondly, the value orientation of Anglo-American trust law is in conflict with that of our law, we can find expressions in three aspects. One is that Anglo-American trust law emphasizes the freedom of settlor, which goes against the protection of the dealing safety and of creditor' s interest. Another is that Anglo-American trust law adds the risk of the third party who deals with the trust. The last one is that Anglo-American trust law is in favor of the real owner to hide property. There are two ideaistic obstacles. The property administrated by non-family in trusts is against the traditional idea which son should continue Dad' s career. On the other hand, in our traditional society, people don' t trust non-family generally. After analysing the politic and economic and cultural aspects of Chinese feudal society, Part Two alleges that there haven' t been trusts, and the so-called "jianjiaocu" system isn' t one kind of trusts. Then I analyse the local resources and the core issues when transplanting the system of private trusts. The local resources include the idea of professional property administrationof commission and the private law systems, which are going to be more and more mature. When transplanting private trusts law, there are three core issues, which are the nature of trusts, the function of trusts, and the ownership of trust property. They are the foundation of trusts transplantation.Chapter Three discusses the nature and foundation of trusts. Part One introduces and sums up three opinions about the nature of trusts in Anglo-American countries. The traditional opinion thinks that trust law belongs to property law, but some argue that trust law belong to contract law, and the latest thinks trust law should be organizational law. After analyzing the trust law of China, I think the law treats the trust relationship as that of contract. As to the nature of trusts, there are some deficiencies in our trust law. The law doesn' t treat trust as an organization and restrict the contractual period. Part Two deals with the changes of the function of trusts and draws a conclusion that the function of trust has been replacing by other legal systems and the appliance of trust becomes more and more narrow. Then two standards are laid down to decide the function of trusts, one is the function the current laws can' t supply, another is the consistency of value orientation between the trust law and other current laws. So in my opinion, there are three pieces of function of trusts, one is property administration, and another is to act as investing organization, which can serve limited liability, and the last one, distribution the rights in property. The end of this part reviews the acceptation of special Anglo-American trusts in our trust law.Chapter Four discusses the ownership of property of single trusts. Part One seeks after the origin of duality of ownership. The duality of ownership comes from the special idea of ownership in Anglo-American property law, which comes from that of ancient Germanic law and the feudal system of fief and the way that Anglo-American law understands rights. Besides, the coexistence of common law and equity law is the direct reason of the creation of duality of ownership. From the nature and the contents and trustee' s liability in construct trusts and result trusts, I think the equity title is the real ownership of trust property, while the legal ownership of the trustee is not the one we continentallaw system people familiar with. Part Two analyses the theory and idea of absolute and unique ownership of property in continental law system, and point out that this theory and idea can' t accept the duality of ownership. Furthermore, it isn' t appropriate too for the trust law of Japan and Taiwan district to give the ownership of trust property to the trustee. Then I compare different opinions about how our trust law treats the ownership of trust property, and I think the law slides over this issue. At last, I advance that the ownership of trust property should be given to the beneficiary; if there are more than one beneficiary, they should share the ownership of trusts property.Chapter Five deals with the ownership of commercial collective trust property and its legal personality. Part One introduces the main types of commercial collective trusts at first, including security-investing fund and industry-investing fund and special purpose trust of Asset-backed Securitization and trust of company annuity. Taking the security-investing fund as an example, there is an analysis about the model that the laws deal with the ownership of fund in some countries and districts. I think the ownership of the property of the commercial collective trusts should belong to the trust itself; the collective trusts are legal person in fact. There are three reasons that drive me to think so. Firstly, the investing fund holds the property in its own name, and enjoys rights and undertakes debts in its own name, and deal with the third party in its own name. Secondly, the investing fund is the legal body of tax law and accounting law practically. Lastly, the governance structure of investing fund carries the characters of legal person. So the investing fund is deal body and organization actually. At last, I argue that the investing fund be one kind of legal person theoretically, for its assets partition, separate liability and governance structure. Part Two analyses the change of the Anglo-American scholars' opinions about the legal position of trust. They didn' t treat trusts as a legal person at first, but now some scholars argue that trusts create a legal body that is independent from the parties of trust; the legal body is trust. Secondly, from the need of disclosure of information in capital market, and the protection of other investors and the creditors ofbeneficiaries, our law should give legal personality to commercial collective trusts. At last, ray opinion is that the commercial collective trusts should be legal person of foundation or financial legal person. The theory of Chinese scholar about legal person of foundation can' t explain the commercial trusts, because they seek profit. But that of Germany can, for the civil code of Germany don' t ask the legal person of foundation to be non-profit. Furthermore, there is actual need for our law to give commercial collective trusts position of legal person, because the number of the their investors is so large that it is material public interest. So I think we should give commercial collective trusts the position of foundational legal person.