This paper examines the Supreme Court's decision determined on July 1, 2007. In this case, the Supreme Court denied the application of the transfer of business regulation to the transfer of trust business. This approach followed the previous traditional position and did not basically change the general view of academic commentators and the supreme court's position. The court confirmed its traditional conclusion; that the transfer of business regulation does not apply to the transfer of trust business. Instead, the Supreme Court applied the replacement of trustee regulation to the transferee of business. According to the replacement and appointment principle of trustee in the Trust Act, new trustees have the same position as the former trustee, and the former trustee ceases to hold office. In return, the new trustee assumes the obligation which the former trustee owed to the third party in relation to the trust operation. The third party not only can exercise his rights under the contract to the former trustee, but also claim those rights to the new trustee. But according to article 48 of the Trust Act, the new trustee's liability is limited to the extent of currently existing trust assets. Unlike the new trustee, the liability of the former trustee is unlimited and personal in nature. Concerning the extent of new trustee's liability, the Supreme Court determined that this liability not only includes legal claim incurred from the trust administrative expense and operation, but also extends liability incurred by the misfeasance of the former trustee. But in my opinion, this Supreme Court's decision is objectionable because the trust asset is separate and independent from the asset of the former trustee. Only the property owned by the former trustee should be subject to liability incurred by his own illegal actions.

This paper examines the Supreme Court's decision determined on July 1, 2007. In this case, the Supreme Court denied the application of the transfer of business regulation to the transfer of trust business. This approach followed the previous traditional position and did not basically change the general view of academic commentators and the supreme court's position. The court confirmed its traditional conclusion; that the transfer of business regulation does not apply to the transfer of trust business. Instead, the Supreme Court applied the replacement of trustee regulation to the transferee of business. According to the replacement and appointment principle of trustee in the Trust Act, new trustees have the same position as the former trustee, and the former trustee ceases to hold office. In return, the new trustee assumes the obligation which the former trustee owed to the third party in relation to the trust operation. The third party not only can exercise his rights under the contract to the former trustee, but also claim those rights to the new trustee. But according to article 48 of the Trust Act, the new trustee's liability is limited to the extent of currently existing trust assets. Unlike the new trustee, the liability of the former trustee is unlimited and personal in nature. Concerning the extent of new trustee's liability, the Supreme Court determined that this liability not only includes legal claim incurred from the trust administrative expense and operation, but also extends liability incurred by the misfeasance of the former trustee. But in my opinion, this Supreme Court's decision is objectionable because the trust asset is separate and independent from the asset of the former trustee. Only the property owned by the former trustee should be subject to liability incurred by his own illegal actions.

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business transfer, transferee, undertaking of financial liability, advertisement, unlimited personal liability, trust asset, trust fund, replacement and appointment principle of trustee, Trust Act