Determination Of The Nature Of The Deficiency Top-up Agreement In Financing Trust Business

In the financing trust relationship,when the beneficiary fails to obtain the full income based on the trust plan as expected,there are numerous disputes between the beneficiary and the credit increasing subject on the deficiency top-up agreement.In the trial,the identification of the nature of the deficiency top-up agreement plays a decisive role in the trend of the judgment result.However,in the case of disputes arising from the deficiency top-up agreement,the standard for identifying the nature of the deficiency top-up agreement has not been unified.Article 91 of the Minutes of the National Court Work Conference on Civil and Commercial Adjudication and Article 36 of the Judicial Interpretation of the Guarantee System of the Civil Code stipulate that "the identification of the nature of the deficiency top-up agreement shall be based on the expression of intention" is too general to solve the problem of unclear identification standards of the nature of the deficiency top-up agreement in the financing trust business fundamentally.There are three kinds of identification of the nature of the deficiency top-up agreement,which are guaranty contract,debt accession and independent contract.The legal relationship of financing trust is different from the general creditor’s debt relationship in nature,so the identification criteria of guarantee,debt accession and independent contract in the guarantee system cannot be directly applied when determining the nature of the deficiency top-up agreement in financing trust.In practice,the court holds that if the deficiency top-up agreement constitutes a guaranty contract,it should have the subordination of guaranty contract and the complementarity of the sequence of performance.Specifically,in the financing trust relationship,the nature of beneficial right is different from that of ordinary creditor’s right in terms of subordination.If the subordination of guaranty contract is required,there should be clear master creditor’s right.From the perspective of risk burden,the priority beneficial right in the financing trust of collective capital meets the standard of creditor’s right.In addition,when the deficiency top-up agreement cannot play the credit enhancement function independently from the trust plan,it should be affirmed that it has formal subordination.With respect to complementarity,where performance of the deficiency top-up agreement is based on the trustee’s inability to perform the obligation,the deficiency top-up agreement shall be recognized as meeting the standard for complementarity of the warranty contract.If the deficiency top-up agreement is recognized as the contract of debt accession,the difference making up obligor should have the intention of "joining the debt",and the difference making up obligation should be the same as the original legal relationship obligation.Specifically in the financing trust relationship,if the wording of the difference making up obligor expresses the intention of "joining the debt",the nature of the deficiency top-up agreement can be directly identified as debt joining.If the difference making up obligor chooses to sign the deficiency top-up agreement with the trustee or its position in the fiduciary relationship is highly coincidental with that of the trustee,it shall be considered that the difference making obligor has made the intention to "join the debt" in an implied form.At the level of identity standard,the difference making up obligation and the trustee’s obligation in financing trust are both monetary payment obligations,which are identical in nature.Therefore,when the balance making up obligation is consistent with the trustee’s obligation in content,the identity standard is satisfied.In judicial practice,many cases choose to avoid the problem of determining the nature of the deficiency top-up agreement,and make a judgment directly according to the content agreed in the agreement.Since independent contracts by nature are in the bottom clause of the deficiency top-up agreement by nature,the academic community has not yet formed a unified view on the identification standards of independent contracts.Therefore,we can summarize the facts of cases in which the deficiency top-up agreement in financing trust is identified as an independent contract by nature in judicial practice,and extract the identification standards of the deficiency top-up agreement as an independent contract by nature.In judicial practice,there are some cases in which the nature of the deficiency top-up agreement is identified as an independent contract: there is no principal creditor’s right guaranteed in the structured trust,the difference making obligor takes advantage of the unfiduciary position to provide the guarantee promise for the beneficiary,and the company as the difference making obligation chooses the deficiency top-up agreement as an independent contract to achieve the goal of increasing the credit in order to avoid the special provisions of the company’s external guarantee.Through the summary of the case criteria,it can be concluded that the subject standard is the priority,the purpose standard is the second,and the independent contract guarantee rules.Specifically,when the subject of the balance making up relationship is not the subject of the financing trust relationship,the deficiency top-up agreement can be directly identified as an independent contract.When the subject of the balance making up relationship is also the subject of the financing trust relationship,the subject standard cannot judge its legal nature.In this case,the true expression of intention should be judged according to the purpose of the difference making up obligor.When the difference making up obligor provides additional credit to the beneficiary by means of the deficiency top-up agreement in order to avoid rigid payment,special provisions of the company’s external guarantee and disclosure obligations,It shall recognize that its true purpose is to establish an agreement to make up the difference by means of an independent contract;When none of the above criteria can identify the nature of the deficiency top-up agreement,after excluding the possibility that the nature of the deficiency top-up agreement is guaranty or debt entry,the deficiency top-up agreement can be identified as an independent contract according to the "independent contract cover rule".