The Supreme Court rendered the 108-Tai-Shang-1353 Decision of September 19, 2019 (hereinafter, the “Decision”), holding that the establishment of a trust contract requires not only general establishment criteria such as the parties’ expression of their intent to reach an agreement but also special establishment criteria such as acts of disposal like the transfer of the property right of the object held in trust and its actual delivery.
According to the facts underlying this Decision, the Appellant and five other individuals who are not parties to this lawsuit took out a loan from the Appellee. The Appellant and the Appellee entered into a loan drawn letter which stipulates that the Appellee shall provide a loan, a property trust deed shall be executed the following day and the formalities for the trust registration of the trust property shall be completed. Both the loan drawn letter and trust deed stipulate that the Appellee can claim the planning service fee and trust commission (hereinafter, the “Fees at Issue”) only after the Appellee appropriates the first utilization amount and the trust property is transferred to the Appellee. Anticipating that the loan conditions would be met, the Appellant paid the Fees at Issue first. Since the Appellee had not appropriated the amount to the Appellant and the trust property had not been transferred to the Appellee, the loan drawn letter and the trust deed at issue was not effective, the conditions for the Appellant’s payment of the Fees at Issue were not satisfied, and the appellant paid the Fees at Issue first out of the misbelief that there was a debt in existence. The Appellant asserted that since there was no legal reason for the Appellee’s receipt of the Fees at Issue, the Appellee was requested to return the Fees at Issue in accordance with Article 179 and Article 182, Paragraph 2 of the Civil Code.
According to this Decision, Article 1 of the Trust Law shows that a contractual trust act requires the trustor’s intent to set up the trust and enter into a contract with the trustee to transfer property rights or make other disposal so that the trustee will engage in practice behavior such as managing or disposing of trust property for the benefit of the beneficiary or for specific purposes according to the objectives of the trust. In other words, the establishment of a trust contract requires not only general establishment criteria such as the parties’ expression of their intent to reach an agreement but also special establishment criteria such as the transfer of the property right of the object held in trust and its actual delivery.
It was further pointed out in this Decision that the preamble of the contract at issue specifically indicates that the Appellant and four other individuals had retained the Appellee to serve as the trustee of a co-development project, and the Appellee would conduct the trust management to manage lands and control funds during the term of the trust pursuant to the trust deed. According to the contents of the trust deed, it would seem that the trust fee was part of the trust compensation, while there was nothing that detailed how the Appellee would provide the trust planning to the Appellant. Whether the Appellee provided trust planning services to the Appellant is still not clear and should certainly be clarified. Without detailed investigation, the original trial court was rash when it jumped to the conclusion that the trust deed at issue has a nature of appointment simply because the Appellee provided assessment planning concerning the Appellant’s financing project and entered into a trust deed. If the trust deed at issue is a co-development trust deed, when the Appellee did not receive the transfer of the trust property, this calls into question as to whether the trust deed at issue was established effectively. The Appellant’s assertion that the Appellee’s receipt of a trust fee without legal reasons was unjust enrichment is not totally baseless. The gist of the appeal should be well-grounded since the original trial court arrived at a decision unfavorable to the Appellant without detailed exploration.