Granting The Right To Sell At Any Price Does Not Give The Person The Right To Sell Contrary To The Rule Of Honesty
General Assembly of Civil Chambers 2017/1243 E. , 2021/113 K.
“Case Law Text”
COURT :Civil Court of First Instance
1. At the end of the trial held due to the “cancellation and registration of title deed” lawsuit between the parties, the decision of Bursa 6th Civil Court of First Instance regarding the dismissal of the lawsuit was reversed by the 1st Civil Chamber of the Court of Cassation upon the appeal of the plaintiff’s attorney, and the Court resisted against the reversal decision of the Special Chamber.
2. The decision of resisting was appealed by the plaintiff’s attorney.
3. After the documents in the file were examined by the General Assembly of Civil Chambers, the necessity was discussed:
I. JUDICIAL PROCESS
Plaintiff’s Claim
4. In the petition for the lawsuit, the plaintiff’s attorney stated that his client lives in Ardahan Province, Posof District, Sütoluk Village and sends the money to his defendant brother by selling the cattle he raises every year in order to build a construction on the land in the 11 parcel of land in Bursa, and that he appointed his brother as his proxy with a power of attorney dated 24.03.2005 and numbered 02777 and issued by the 7th Notary Public of Bursa to have the construction built and to carry out the abandonment procedures in favour of the green area or the Municipality when necessary.
2005 dated 24.03.2005 and numbered 02777, the defendant, on the other hand, abusing the power of attorney, transferred the property to his wife on 24.06.2008 and took it into his own name on 22.12.2008 by showing a sale in the title deed, claiming that the defendant did not pay any sales price and took the money sent by his client, and filed a request for cancellation and registration of the title deed.
Defendant’s Reply:
5. In his reply petition, the defendant’s attorney stated that the relationship between the parties arises from the power of attorney agreement, the plaintiff authorised the defendant to sell the property subject to the lawsuit to whomever he wishes at the price and conditions he wishes in the power of attorney, and based on this authority, his client sold the property for 16. 500,00TL to Senem Güner, arguing that there is an agency relationship between the parties and that the plaintiff can only request the payment of the sale price, that the sale price has been paid to the plaintiff, and that this payment will be proved in the event of a lawsuit for receivables, and requested the dismissal of the lawsuit.
Decision of the Court of First Instance:
6. Bursa 6th Civil Court of First Instance dated 05.11.2013 and numbered 2011/126 E., 2013/500 K. dated 05.11.2013, the defendant was authorised in the power of attorney to sell the immovable property subject to the lawsuit to whomever he wishes at the price and conditions he wishes, the defendant sold the immovable property to Senem Güner on 24.06.2008 for 16.500,00TL and then took it over himself, the land value of the immovable property was 66.295,00TL as of the date of the lawsuit and 41.308,00TL as of the date of the power of attorney.
308,00TL, the defendant sent a total of 50.160,00TL to the plaintiff by EFT on different dates, no irregularity was found in the sales transactions, and according to the expert reports, the price shown at the sales stage and the bank transfers between the parties were close to each other, so the case was dismissed on the grounds that it could not be proven.
Special Chamber Reversal Decision:
7. The plaintiff’s counsel appealed against the above-mentioned decision of the court within the prescribed period.
8. With the decision of the 1st Civil Chamber of the Court of Cassation dated 12.01.2015 and numbered 2014/1946 E., 2015/60 K., the decision of the local court was approved by majority of votes. However, upon the plaintiff’s attorney’s request for rectification of the decision against the decision of confirmation, the decision of the Special Chamber dated 22.06.2015 and numbered 2015/6997 E., 2015/9243 K., the decision of confirmation was cancelled and
“…In the concrete case, although the defendant defended that he purchased the immovable and registered it in the name of the plaintiff, it is undoubted that this defence can be proved by written evidence in accordance with the Unification of Case Law decision dated 05.02.1947 and numbered 20/6. On the other hand, in the face of the rule that the main thing is the land and the building is an integral part and subject to the ownership of the land, the defendant can only claim the money spent for the construction of the building.
On another issue, it is clear that the power of attorney used in the assignment of the disputed immovable property is valid. However, in order for the assignment to be accepted as correct and healthy, in addition to the validity of the power of attorney, it is essential that the immovable property is assigned at a real or close to real price. It should be accepted that the owner is damaged in the transfer made with a very low, symbolic price.
In the case at hand, the price shown in both assignments is 16.500 liras, and the court has determined the prices of the immovable property on the date of the power of attorney and on the date of the lawsuit, but not on the dates of the contract.
In this case, considering that the building is an integral part of the land, it is necessary to determine the value of the immovable property together with the building on it on the dates of the contract, and to ask the witnesses again whether the defendant sent the plaintiff 50.
160 liras sent by the defendant to the plaintiff on different dates as a sales price or for the purchase of animals by the plaintiff, to clarify whether the plaintiff has been damaged by comparing it with the price to be determined if it is determined that it is a sales price, and if it is determined that the plaintiff has been damaged, the case should be accepted, otherwise it should be decided to dismiss the lawsuit, but it is not correct to make a decision in writing by being satisfied with incomplete investigation…” the judgement was reversed with a majority of votes.
Resistence Decision:
9. With the decision of Bursa 6th Civil Court of First Instance dated 23.11.2015 and numbered 2015/796 E., 2015/906 K., the reasons in the first decision were repeated and the previous decision was resisted on the grounds that the land price and the money sent to the plaintiff were in harmony, and the opposite could not be proved by the plaintiff with evidence of the same strength.
Appeal of the Resistence Decision:
10. The resisting decision was appealed by the plaintiff’s attorney within the time limit.
II. DISPUTE
11. The dispute that came before the General Assembly of Civil Chambers through resistance is whether the court made a decision as a result of incomplete examination, and according to the result to be reached here, the value of the immovable property together with the building on it at the date of the contract should be determined, and whether the 50.160,00TL sent by the defendant was sent as a sales price or for the purchase of animals by the plaintiff should be asked again from the witnesses, and if it is understood that it is a sales price, it should be compared with the value of the immovable property to be determined, to clarify whether the plaintiff has been damaged or not, and whether a decision should be made in accordance with the result.
III. REASON
12. The lawsuit is related to the request for cancellation and registration of the title deed filed based on the legal ground of abuse of power of attorney.
13. According to the first paragraph of Article 502 of the Turkish Code of Obligations (TCO) No. 6098, which entered into force on 01.07.2012, an agency contract is a contract in which the agent undertakes to perform a work or perform a transaction of the principal. With the power of attorney contract, which is a contract of performance in a broad sense, the agent undertakes to perform the work or transaction assigned to him in accordance with the will and benefit of the principal.
14. The power of attorney contract should not be confused with the representation relationship regulated under the general provisions of the TCO (Articles 40 and 48). Power of attorney is a bilateral contract, whereas power of representation is a unilateral legal transaction. In general, power of attorney refers to the internal relationship between the agent and the principal, while representation refers to the external relationship between the principal and the third party with whom the principal transacts through the agent.
According to the provisions of the Turkish Code of Obligations regulating the representation and agency relationship, the agency contract is largely based on the mutual trust of the parties. Most of the obligations of the agent arise from this element of trust and his/her obligation to act in accordance with the interests and will of the principal. Because the power of attorney should be used mainly for the benefit of the principal. This is a natural consequence of the contract of employment.
15. As a matter of fact, in the TCO, the duty of loyalty and diligence is accepted as the foremost duty of the agent towards the principal, and Article 506 entitled “Personal performance, loyalty and diligence” reads as follows
“The attorney is obliged to personally fulfil the proxy obligation. However, in cases where the agent is authorised or where the situation is mandatory or made possible by custom, the agent may have the work done by someone else.
The attorney is obliged to carry out the works and services undertaken by the attorney with loyalty and diligence, observing the legitimate interests of the principal.
In determining the responsibility of the agent arising from the duty of care, the behaviour of a prudent agent undertaking work and services in a similar field is taken as a basis”.
16. In the first paragraph of Article 389 of the Code of Obligations No. 818, which was in force at the time of the assignment subject to the lawsuit, it is stated that the agent cannot oppose the explicit instructions of the principal, and in Article 390;
“The liability of the agent is subject to the provisions pertaining to the liability of the employee in general.
The agent is obliged to fulfil the power of attorney in a good manner towards the principal.
Agent is obliged to perform the principal’s duty himself, unless he is graduated or obliged according to the circumstances or unless the custom allows him to substitute someone else in his place.” The term “good performance” herein should be understood as “faithful and diligent performance” as in Article 398 of the Swiss Code of Obligations, which is the original of the said provision.
17. The concept of the duty of loyalty refers to the obligation of the agent to protect the interests of the principal within the framework of the purpose pursued by the contract and to subordinate his own interests to those of the principal, both during and after the performance of the power of attorney, in accordance with the trust placed in him. The duty of care is the duty of the agent to take the necessary initiatives and behaviours in accordance with his/her life experiences and the normal course of business in order to achieve the desired result and to avoid behaviours that may prevent a successful result.
18. Pursuant to the above-mentioned provisions, it is clear that the agent shall be under the obligation to act in accordance with the interests and will of the principal and to avoid behaviours that may harm the principal. The scope of the power of attorney shall be determined according to the nature of the work to be performed pursuant to Article 504/1 of the TCO, unless it is explicitly stated in the contract. Even if there is no explicit provision in the contract on how to fulfil the power of attorney, or even if the transaction is within the limits of the power of external representation, this obligation of the attorney is always present.
19. If the agent fails to fulfil this obligation, especially if he intentionally uses the power of attorney to the detriment of the principal or for his own or another person’s benefit, there may be an abuse of the power of attorney contract. This is because the power of attorney contract is a contract that includes the performance of work based on the principle of trust, and the protection of this trust is a requirement of the rule of honesty expressed in Article 2 of the Turkish Civil Code No. 4721 (TCC).
20. In practice, it is observed that the cases of abuse of power of attorney are concentrated especially in cases where the attorney sells and transfers an immovable property, which he is authorised to sell, at a very low price compared to its fair value. However, as emphasised in the decisions of the General Assembly of Civil Chambers dated 19.12.2019 and numbered 2017/1-1272 E., 2019/1399 K.; dated 02.12.2020 and numbered 2017/1-1252 E., 2020/992 K.,
the fact that the owner authorises the agent to sell an immovable property to whomever he wishes for the price he wishes, and that he even specifies the person to whom he will sell, does not give him the right to make a sale beyond reasonable limits, disregarding the rule of honesty, loyalty and duty of care. An agent who commits an act or transaction incompatible with the interest of the principal shall be liable in accordance with the aforementioned articles.
21. However, in case of abuse of the power of attorney, the problem of whether the transactions of the agent with third parties will be binding for the principal is also encountered. In this case, if the person who makes a contract with the agent is in good faith within the meaning of Article 3 of the TCC No. 4721, that is, if he does not know that the agent is abusing the power of attorney, or if it is not possible for him to know despite exercising due diligence, the contract with the agent is valid and binds the principal. Even if the agent abuses the power of attorney, this issue remains as an internal problem between the agent and the principal, and cannot affect the rights acquired by the person who has contracted with the agent.
22. However, if the third party is in interest and co-operation with the attorney-in-fact, or if the third party is malicious and knows or should know that the attorney-in-fact is abusing the power of attorney, it should be accepted as a natural consequence of the rule of honesty in Article 2 of the TCC that the attorney-in-fact is not bound by the contract. Since the aforementioned article has a mandatory nature, it is obligatory to be taken into consideration by the judge ex officio. To the contrary would be to encourage bad faith, or at least to condone it. However, in all contemporary legal systems, bad faith is not protected but always condemned. As a matter of fact, the practice and scientific opinions have developed and stabilised in this direction (General Assembly of Civil Chambers dated 07.12.2011, 2011/14-609 E., 2011/744 K.).
23. If the power of attorney has been abused and the person who made a contract with the attorney is in hand and in cooperation with the attorney, or at least knows or should know that the power of attorney has been abused, the attorney may always request the termination of the contract, and in this context, the cancellation of the title deed if the title deed has been transferred according to the contract.
24. On the other hand, as a rule, the judge cannot investigate whether the facts in dispute between the parties have occurred or not. The parties must prove whether an event has occurred or not. The issue of which party shall bear the burden of proof in a lawsuit is regulated in Article 6 of the Turkish Civil Code No. 4721 as follows: “Unless otherwise provided by law, each party is obliged to prove the existence of the facts on which he bases his right. “, and the rule of burden of proof, which is one of the most important issues of procedural law, is stipulated in Article 190 of the Code of Civil Procedure (CCP) No. 6100 as follows:
“Unless there is a special provision in the law, the burden of proof belongs to the party who draws a right in his favour from the legal result attached to the alleged fact.”
25. It is clear that the burden of proof of the abuse of fiduciary duty belongs to the plaintiff party who asserts the claim in accordance with these general provisions.
26. When it comes to the concrete case in dispute; the plaintiff appointed the defendant’s brother as his attorney with the power of attorney dated 24.03.2005 and numbered 02777, issued by the 7th Notary Public of Bursa, and authorised him to build a construction on the immovable property numbered 11 parcel, to carry out the transactions related to the construction, and also to sell the immovable property to whomever he wishes for the price he wishes. The defendant, who was authorised in this way, assigned the immovable property to his wife Senem Güner for 16.500,00TL on 24.06.2008,
and it was registered in the name of the defendant as a result of the sale transaction made on 22.12.2008 for the same price. On the other hand, although there is a five-storey building on the immovable property subject to the lawsuit, as a result of the discovery made by the court, the land value of the immovable property on 01.03.2011, when the lawsuit was filed, was determined as 66.295,00TL; the land value on 24.02.2005, when the defendant was appointed as an attorney, was determined as 41.308,00TL.
27. When the concrete case is evaluated within the scope of the legal regulations and principles explained; although the defendant’s attorney defended in his reply petition that his client sold the immovable property to his wife for 16.500,00TL and paid the price to the plaintiff based on the sales authority he had, he submitted a list of evidence to the court on 29.03.2012. 2012, in subparagraph (2) of the petition containing the list of evidence submitted to the court on 29.03.2012, the defendant stated that the defendant purchased the immovable property with his own money, but registered and registered it in the name of the plaintiff’s brother with a power of attorney due to his debts to the Ministry of Finance in 2005,
He explained that he built a building on the land he bought with his own money by trusting and relying on his brother, two floors without a licence and three floors with a licence, and since he was the owner of the building, he registered the immovable property in his name with a power of attorney after correcting his affairs with the Ministry of Finance, and that this is the real situation, and he also explained that the previous owner from whom the plaintiff purchased the immovable property … ‘ı 25. 06.06.2012 dated hearing as a witness, and the said witness made a statement in the same direction.
In the petition submitted to the court on 29.11.2012, he stated that his client sent 50.160,00TL to the plaintiff as the sales price and submitted nine bank receipts of the money he sent on behalf of the plaintiff between 11.06.2009 and 21.02.2011, and in his petition dated 05. 12.2012, the defendant defended that since the plaintiff did not contribute to the construction of the building, he gave a power of attorney for the transfer of the immovable property to his brother who built the building by taking the land value, and that the defendant sent 50.160,00TL money as the land value.
28. As can be seen, the defence in the petitions submitted by the defendant is contradictory within itself. Although it is defended in the reply petition that the relationship between the parties is purely a proxy relationship as stated in the petition, it is later defended that the defendant registered the immovable property, which was actually purchased with his own money, in the name of his brother, and that the power of attorney was given for the return of the immovable property to the defendant.
Since this defence includes a claim of faithful transaction, it is obligatory to prove it with a written document in accordance with the Decision of Unification of Case Law dated 05.02.1947 and numbered 20/6, and it is contrary to the ordinary course of life for the defendant to claim that he paid a price for his own immovable which he registered in the name of the plaintiff after it was registered in his name. Moreover, the sale price declared as 16.500,00TL was later changed and it was claimed that 50.160,00TL was paid.
29. However, the power of attorney contract is largely based on the mutual trust of the parties. The concept of trust is based on meanings such as truthfulness, honesty, frankness, sincerity, reality and rightness. Pursuant to the “principle of honesty”, which is one of the universal and general principles of law and stipulated in Article 2 of the Turkish Civil Code No. 4721, everyone is obliged to comply with the rules of honesty when exercising their rights and fulfilling their obligations. The legal order does not protect the flagrant abuse of a right.
A general restriction is imposed on the exercise of rights by the “rule of honesty” and “prohibition of abuse of right”, which are closely linked. According to this mandatory provision of the law, everyone must use their rights honestly. The rule of honesty, as a rule of behaviour, is a rule that must be followed not only in the exercise of rights but also in the performance of obligations. The use of a right recognised by the legal order contrary to its purpose is incompatible with the rule of good faith and thus that right is abused.
30. This general principle is also valid in procedural law and the parties must act in accordance with the basic rule of honesty during the proceedings before the judicial bodies. Achieving the material truth by conducting a fair trial is only possible by protecting the basic rule of honesty in the proceedings. Therefore, it is an obligation for the parties to comply with the rule of good faith and tell the truth during the proceedings. The subject matter of this obligation is the facts relied upon by the parties.
31. Although the abrogated Code of Civil Procedure No. 1086 did not include a clear provision on the obligation of the parties to act honestly during the proceedings, there was a consensus in both the doctrine and the decisions of the Court of Cassation that the case should be conducted within the framework of the rules of good faith.
In the Code of Civil Procedure No. 6100, a regulation has been made under the title of “Obligation to act honestly and tell the truth”, and Article 29 of the Code reads as follows
“(1) The parties are obliged to act in accordance with the rule of honesty.
(2) The parties are obliged to make their explanations regarding the facts on which the case is based in accordance with the truth”.
32. Although the parties are free to decide what to assert or not to assert in accordance with their own interests during the proceedings, the statements and explanations they put forward must be true; they must not mislead the court with their explanations regarding both themselves and the other party; and they must exercise their claim and defence rights in accordance with the rule of honesty. Otherwise, the claim and defence shall not be deemed admissible by the court. This is because it is unthinkable for one of the parties to benefit from the result of a transaction or behaviour contrary to the rule of good faith. For this reason, the breach of the rule of good faith shall be observed by the judge spontaneously, and may be asserted by the parties at any time.
33. One of the forms of behaviour that may violate the rule of good faith during the proceedings is the party’s intention to perform a procedural act that contradicts a legal situation that the party has previously performed. In other words, the prohibition of contradictory behaviour. This situation is expressed in the Mecelle as “Whoever attempts to nullify what has been completed by himself, his attempt is merdud”, i.e. “whoever attempts to nullify/nullify what he himself has done/said/completed, this behaviour will not be taken into account”.
34. For the reasons explained, the General Assembly of Civil Chambers disregarded the defence of the defendant, and according to the evidence presented by the plaintiff, it was concluded that the immovable property registered in the title deed in the name of the plaintiff was first assigned to his spouse by the defendant, who was authorised by a power of attorney, and shortly afterwards, the defendant took it over from him and the attorney took it to himself.
Although the land value of the immovable property in 2005 was 41.308,00TL, it is clear that it was transferred at a price much lower. In this case, it is clear that the agent, who is under the obligation to act in accordance with the interests and will of the principal and to avoid damaging behaviours, has abused his duty of attorney. Likewise, in the event that the act of causing damage is realised, it should be accepted that the authority has been abused.
35. In the face of all these facts, the local court should decide to accept the lawsuit, considering that it has been proved that the attorney has abused the duty of attorney in the concrete case.
36. Hence, due to these different justifications and reasons explained, it is necessary to overturn the decision of the local court to decide to accept the lawsuit.
IV. CONCLUSION:
For the reasons explained;
With the acceptance of the appeal objections of the plaintiff’s attorney, the decision of resistance shall be reversed in accordance with Article 429 of the Code of Civil Procedure No. 1086, which is being implemented by reference to the “Provisional Article 3” added to the Code of Civil Procedure No. 6100 by Article 30 of the Law No. 6217 for the above-mentioned reasons and grounds,
In case of request, the advance appeal fee shall be returned to the depositor,
Pursuant to Article 440 of the same Law, it was unanimously decided on 18.02.2021, with the way of correction of the decision being open within fifteen days from the date of notification of the decision.
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