On Legal Adjustment Of External Trust Relationships

The trusting system originating from benefit system in Britain on which its unique abilities such as management of property, flexibility, long-term planning, has been recommended by other many nations in succession without the exception of our country. Our country in the period of the national government had developed trust business, which didn't take activity until the 80's. For many years, our country's trusting system fails to give play to its due effect because of the various causes, among which the major cause is short of one basic trust law. However, 《Trust law of the People's Republic of China》 emerges as the times require on May4,2001, and puts into force on Octl, 2001.The law plays the important role in legitimating trust behaviors, protecting the interests of trust agents, developing healthily the business of trust and promoting our country economy to make prosper. But comparing the perfect relatively trust laws of U.S.A, Japanese and Korea, our country still remains to make great efforts further. Therefore, the author intents to deal with the question on the equity of the interest conflict in the external trust relations, benefiting to making the legal system of trust perfect to some extent. The paper consists of three parts.The first part is intended to reveal the law foundations which give rise to the interest conflict of outside trust relations. The legal quality of the trust relation is firstly inquired in the part. The author thinks the trust relation not only has the quality of creditors' rights but the quality of real rights , Because of the quality of real rights, trust relationships have the power against third parties. The power against third parties originates in the special practice of trust, i.e. independence of the trust property and limited liability, which are the fundamental natures of trust law. The natures mentioned above were reinforced by the values of freedom and efficiency at the initial stage of trust law, and were guaranteed effectively the interests of trust agents and realizing of trust purpose. However, the absolute power against third parties will give rise to conflicts between trust agents and outside parties, so how to gain balance between both, which is the duty cannot be evadedfor trust law.Second part aims to discuss the functions and principles of trust law on adjusting external relationships. At first, the author discoveries the functions of trust law on adjusting the external conflicts with the method of authentic proof analysis. As far as the outside relationships, trust agents hope that the clauses about managing trust property can restrain third parties. However, by way of the contract law, it spends the very high business cost. But trust law that provides one set of standard contract clauses by way of forcing nature term will do better. Trust law will follow two basic principles adjusts the outside relationships. One principle is interest balance between "genuine right and business safety protection", and another is interests weighed by "taking the business cost as the center".Part three deals with the rules of trust law adjusting external trust relationships by combining the common law with the continent trust laws. The interest equilibrium points are inclined to different parties on the foundation of principles above-described. (1) Adjustment on tort relations caused by trust creation lays special emphasis on the protecting third parties' interests. When the settlor establishes a trust with the property that he has no right to deal with, in principle, the person owning the property can pursue to the property for the trustee, and when the settlor establishing a trust for escaping his debt, his debtor has power to cancel it, with the exception of the third party with good will. (2) When adjusting the external relationships of managing trust property, trust law gives the prior repaid right to the trustees and the canceling right to the beneficiaries, while sets some restrains on them based on business safety at the same time. (3) On adjusting the outside relations of managing trust property, trust law provides more protection to aggrieved party with no exception, requiring that the trustee undertakes direct duty to aggrieved party with whole property including trust property, because aggrieved party cannot know beforehand the existence of trust relations. (4) As for trust agents in the relation of their creditors, trust law lays special emphasis on the interests of trust agents in the protection. In principle, trust agents t undertake the debt and pay off the duty with their individual property excluding the trust property. At the end of the part,author has discussed to trust publicity. Trust publicity is the important way of connecting the internal trust relationships with the external relationships, whose purpose lies in the protection of business safety. Comparing with the trust system of the continent law nations, our country trusts publicly has the defects, so, the author has put forward the corresponding perfect opinion.