A Discussion On The Trustee's Duty Of Loyalty

After succeeding the trust from Common-law System, China works hard for maximizing the efficiency of this institution. The trust bring great contribution for the economic development of the common-law nation from its creation. While, the trust's security become very important, because its design separates the management and benefit. The trustee who with the power of operation and deal with trust properties could decide the beneficial interests to the beneficiary. Moreover, in modern trust the power of trustee continuously extends. It is more and more emergency to limit and control the trustee's power by obligation supervision. By examining all the trustee'duty , the loyalty duty is a fundamental duty to establish and rule the basic of other powers and duties which belong to the trustees. The purpose of this article is to examine the loyalty duty of trustees.It is divided into five parts:Part I discusses the evolution of trust. Through clearing the history process and the reason of creation of trust, we can understand that this design themselves have inevitability to establish the duty of loyalty. The emergence of trust was to sidestep the law, but it existed moral risk in the beginning. The trustee--nominal owner of the property declared property was his own or sale it. The trustor was helpless of this kind of behaviors, because between the trustor and trustee was a gentleman agreement and completely depended on the honest character of the trustee. However, Equity intervention by "conscience" and "fair" to compel the trustee. So, the loyalty duty is a necessary request which trust itself contain, and will become the important point of law concerning.Part II elaborates the trend of the modern trust. It is unpopular that the traditional trust law carries on the restriction to trustee's power. The law of the modern trust supervises the trustee's power by the duty of care and duty of loyalty. This article analyses the sole interest rule and the best interest rule, which are the standards of loyalty duty. China needs to adapt the sole interest still.Part III analyses morality, contractarian basis, safety and efficiency value of the loyalty duty. It explains deep principles of the trustees'loyalty duties from three angles to know and understand these duties in the practice. Morality constitute the loyalty duty as an important part and emphasis on it can help the law; the compulsory and randomicity of the trust come from contract law and property law; safety and efficiency value suggest the developing orientation of the trustee'loyalty duty.Part IV examines the detail and the specific institution on trustee'loyalty duties in light of the England and USA trust law. This part discusses from three levels: (1) do not let yourself conflicts with beneficiary ; (2) trustee can not benefit from trust ; (3) when carry out the business of trust, trustee can not benefit to the third person.Part V compares the loyalty duty of China law with it of the UK and the USA, and suggests current law extending the context of loyalty duties and building a more complete system of the trust. The trust law of China is too abstract and simple, because it is infuented by the abstract lawmaking'view of the Statute System.