Continuing Enforcement Despite Payment After Enforcement Proceedings Shall Not Be Considered Unjust Seizure
Supreme Court of Appeals, General Assembly of Civil Law
2018/374 E.
2018/943 K.
COURT: Civil Court of First Instance
Following the trial of the case between the parties regarding “negative determination and moral damages,” the Ankara 6th Civil Court of First Instance issued a decision on 10.09.2013, No. 2011/189 E., 2013/374 K., accepting the case. The defendant’s representative appealed this decision to the Supreme Court of Appeals 19th Civil Chamber’s decision dated February 10, 2014, numbered 2013/19421 E., 2014/2667 K., ruled as follows:
“…The plaintiff’s attorney stated that in the enforcement proceedings initiated by the defendant against his client through attachment specific to bills of exchange, despite his client paying the file debt to the defendant on 15.04.2011, the defendant continued the enforcement proceedings and carried out an attachment procedure at his client’s home on 10.05.2011. and requested a ruling that the client was not indebted as of the payment date of April 15, 2011, an award of damages for bad faith, and an order for the defendant to pay 5,000 TL in moral damages.
The defendant’s attorney stated that a total of 4,000 TL was paid to his client, and that when the plaintiff wanted his client to sign a document stating that the entire debt in the file had been collected, his client signed the document after writing 4,000 TL on it. However, the plaintiff added to this document, writing that 14,000 TL had been collected, even though the file debt was not 14,000 TL, and argued that the case should be dismissed.
According to the evidence gathered by the court and the expert report, the debt in the follow-up file was 13,582.13 TL as of April 15, 2011, with the applicable interest rate, and 15,083.78 TL with a fixed interest rate of 29%. there were no findings that the document dated 04.15.2011, presented by the plaintiff and accepted by the defendant, had been tampered with, and that the debt in the enforcement file in question had been paid as of the date the document was drawn up. despite the payment made, the enforcement proceedings continued and the defendant’s property was seized at the plaintiff’s home, indicating the defendant’s bad faith, and again, despite the payment of the debt in the file, the plaintiff’s property was seized on May 10, 2011, and household items were taken into custody, Despite the precautionary measure granted pursuant to Article 72/3 of the Enforcement and Bankruptcy Law, collection continued from the third-party guarantor, thereby damaging the plaintiff’s reputation in his social and professional circles, and it is understood that he suffered moral damages. Therefore, the case is accepted, and it is determined that the plaintiff was not indebted as of April 15, 2011, that the claimant was not a debtor as of that date, that 4,400 TL in bad faith compensation, calculated at 40% of the claim subject to the lawsuit, be collected from the defendant and paid to the claimant, and that 5,000 TL in moral damages be collected from the defendant and paid to the claimant. The defendant’s attorney appealed the ruling.
1- Considering the documents in the file, the evidence on which the decision is based, and the compelling reasons, and given that there is no inaccuracy in the assessment of the evidence, the defendant’s attorney’s other appeals for appeal, except for those covered by the following clause, must be rejected.
2- a) Since the grounds for the plaintiff’s claim of moral damage were not deemed sufficient for the acceptance of the claim for moral damages, the court’s decision to award moral damages was not considered correct.
b) Pursuant to Article 72/5 of the Enforcement and Bankruptcy Law, if the enforcement proceedings that forced the plaintiff debtor to file a lawsuit are unjust and malicious, compensation for unjust and malicious proceedings shall be awarded in favor of the plaintiff debtor upon request. Considering this explanation, the legitimacy of the enforcement proceedings at the time of the proceedings shall be taken into account in determining the compensation. The court’s failure to consider this aspect is incorrect…” With this reasoning, the decision was overturned unanimously for the reason explained in subparagraph (a) and by a majority vote for the reason explained in subparagraph (b), and the case was remanded for retrial. Following the retrial, the court upheld its previous decision.
DECISION OF THE GENERAL ASSEMBLY OF THE COURT OF APPEALS
After the General Assembly of the Court of Appeals reviewed the case and determined that the appeal against the decision to uphold the previous ruling was filed within the time limit and after reading the documents in the file, the following decision was reached:
The case concerns claims for moral damages due to negative determination and unjust seizure.
The plaintiff’s attorney argued that, despite the debt in the file being paid externally on 15.04.2011 and the defendant providing a signed document regarding the payment, the defendant continued the enforcement proceedings in bad faith, seized the plaintiff’s home, and took custody of some of the household items. The plaintiff claims that this seizure, carried out by the defendant who collected the debt with all its accessories, constitutes an unjust act. The plaintiff, embarrassed before his family, also claims that his reputation has been damaged in his community. He therefore requests and sues for a determination that he is not indebted due to the enforcement proceedings and for a decision ordering the defendant to pay 40% compensation and 5,000.00 TL in moral damages due to the unjust seizure.
The defendant’s attorney stated that following the enforcement proceedings, the plaintiff paid a total of 4,000.00 TL to his client, and then wanted his client to sign a document stating that the entire debt in the file had been paid. Upon noticing this, the client wrote the amount of 4,000.00 TL he had received up to that date in his own handwriting on the document and signed it. However, an addition was later made to this document stating that “14,000.00 TL” had been collected, whereas the file debt was not even that amount at this stage, and that the claim of payment exceeding the debt amount was contrary to the normal course of life, requesting that the case be dismissed.
The Local Court found that found no evidence of tampering with the document dated 15.04.2011 presented by the plaintiff and accepted by the defendant, that the debt in the enforcement file had been paid as of the date the document was drawn up, that the defendant had caused the lawsuit to be filed in bad faith by continuing the enforcement proceedings and seizing the plaintiff’s home despite the payment made, Therefore, the conditions for compensation under Article 72/5 of the Enforcement and Bankruptcy Law (EBL) are met. Furthermore, despite the payment of the debt in the file, the plaintiff’s home was seized, his household goods were taken into custody, and collection continued from the third party acting as the enforcement guarantor, damaging the plaintiff’s reputation in his social and professional circles. For these reasons, the lawsuit is accepted. It was determined that the plaintiff was not in debt as of April 15, 2011, in the enforcement file, and it was decided that 4,400.00 TL in compensation, equivalent to 40% of the claim, and 5,000.00 TL in moral damages should be collected from the defendant.
The decision was appealed by the defendant’s attorney and overturned by the Special Chamber based on the reasons stated in the heading section above.
The Court ruled that the unlawful seizure constituted a tort and warranted moral damages, that in the specific case, although the debt in the file had been paid, the continuation of the enforcement proceedings and the seizure of certain household items at the debtor’s home violated the plaintiff’s personal rights, Therefore, the claim for moral damages was justified, and the reason forcing the plaintiff to file a negative determination lawsuit was the continuation of the enforcement proceedings and the seizure at the plaintiff’s home despite the debt being paid. In this case, the conditions for compensation under Article 72/5 of the Enforcement and Bankruptcy Law were also met, and the initial ruling was upheld.
The defendant’s attorney appealed the decision to uphold the ruling.
The dispute brought before the General Assembly of the Court of Appeals through the appeal process centers on whether the conditions for moral damages in favor of the plaintiff due to unjust seizure and the conditions for compensation under Article 72/5 of the Enforcement and Bankruptcy Law have been met in the specific case.
It is beneficial to evaluate the issues of dispute separately.
I-Regarding the defendant’s attorney’s appeal objections concerning moral damages;
It should be noted immediately that Turkish Civil Code No. 4721 (TMK) recognizes real and legal persons as individuals. The legal system, which grants individuals the capacity to hold rights and incur obligations, also offers them the opportunity to protect their personality. The scope of these protected values includes personal values based on the physical existence of the person (such as life, body, physical and mental health) and external values related to their place and effectiveness in society (such as honor, dignity, respectability, freedom of economic movement, name, reputation, privacy, and private life), in short, all values that are inseparably inherent to the person as a person (HGK, 22.01.2016, 2014/4-213 E., 2016/70 K.).
In this context, the right to personality is the absolute right of a person, which also encompasses the concept of personhood, over the material and moral personal values that the legal system deems worthy of protection, based on their capacity to hold rights and perform acts.
The right to personality is at the forefront of the fundamental rights and freedoms protected by the Constitution. Protecting and respecting the right to personality, which is considered a fundamental right, is a constitutional obligation for both state organs and individuals. Personality rights are protected not only by the Constitution but also by the provisions of the Turkish Penal Code.
In the field of private law, the basic regulation regarding the protection of personality rights is stipulated in Articles 23 and 24 of the Turkish Civil Code (TMK). Another regulation on this subject is Article 58 of the Turkish Code of Obligations No. 6098 (repealed Article 49 of the Code of Obligations No. 818), which regulates the claim for moral damages by a person whose personality rights have been violated.
According to the generally accepted view, a claim for moral damages, which is one of the lawsuits that can be filed for the protection of personality rights, is a lawsuit filed to compensate for the involuntary diminution in the personality values of the injured party or to alleviate the pain, sorrow, and suffering experienced by the person whose personality rights have been unlawfully violated.
Indeed, Article 58/1 of the Turkish Civil Code No. 6098, which contains a provision parallel to Article 49/1 of the repealed Turkish Civil Code No. 818, states: “A person who has suffered damage as a result of the infringement of their personality rights may request the payment of a sum of money as moral damages in compensation for the moral damage suffered.”
As can be seen, the basis for the claim for moral damages is an unjust act, and the person who has suffered damage due to the violation of their personal rights may claim moral damages in accordance with Article 58 of the Civil Code.
Meanwhile, the unjust seizure is also an unjust act, and therefore the person whose personal rights have been violated may claim moral damages.
Regarding the existence of wrongful seizure in the specific case; based on a promissory note dated January 30, 2007, with a value of TL 6,000.00, the creditor (defendant) initiated enforcement proceedings against the debtor (plaintiff) on March 28, 2007, for the collection of a total of TL 6,854.00, including interest and penalties. 2007, together with interest, totaling 6,854.00 TL. The payment order was served on February 25, 2011. The debtor objected to the debt and interest in a petition dated March 1, 2011. Since the proceedings concerned a bill of exchange and all objections and complaints must be made to the court, the objection was rejected. Upon this, the creditor’s attorney requested seizure. Seizure was attempted at the debtor’s home address for the first time on May 6, 2011, and for the second time on May 10, 2011. The debtor, who was present, declared that he had paid the debt, but this was not accepted by the creditor’s attorney. Some household items were seized and put up for sale. When the sale could not be completed, the debtor’s home address was visited four more times on various dates for further seizure. A payment order was issued to the guarantor, and collection efforts continued.
However, according to the document dated 15.04.2011 in the file, the entire debt in the enforcement file was paid by the plaintiff to the defendant outside of court before the date of seizure. There is no dispute between the Special Chamber and the local court that the signature on the aforementioned document belongs to the defendant creditor. In this case, the defendant, who collected the entire debt externally, failed to report this to the enforcement file and continued with the enforcement proceedings, conducting seizure and preservation proceedings at the debtor’s home, which constitutes an unjust seizure. Due to the unjust seizure, the plaintiff’s reputation has been damaged, and his personal rights have been violated.
Therefore, the decision to uphold the claim that the defendant, who is at fault due to the unlawful seizure and preservation, is liable for the moral damages suffered by the plaintiff is appropriate.
However, since the Special Chamber did not examine the amount of compensation, the file must be sent to the Special Chamber for the examination of the appeals related to this aspect.
II-Regarding the defendant’s attorney’s appeal objections to the compensation awarded pursuant to Article 72/5 of the Enforcement and Bankruptcy Law;
As is known, a lawsuit filed by a person (debtor) who is likely to be subject to enforcement proceedings or who is subject to enforcement proceedings due to a debt that does not actually exist or an invalid legal relationship, in order to prove that they are not actually indebted, is called a negative determination. (HGK dated 22.01.2016 and 2014/19-674 E., 2016/76 K.; dated 23.10.2015 and 2014/19-118 E., 2015/2357 K.).
The basis for the negative determination lawsuit is Article 72 of the Enforcement and Bankruptcy Law No. 2004.
Article 72 of the Enforcement and Bankruptcy Law, titled “Negative determination and recovery lawsuits,” states:
“The debtor may file a negative determination lawsuit to prove that they are not indebted before or during enforcement proceedings.
The court hearing a negative determination action filed before enforcement proceedings may, upon request, issue a provisional measure decision to suspend enforcement proceedings in exchange for security not less than fifteen percent of the claim.
In a negative determination lawsuit filed after enforcement proceedings, a decision to suspend the proceedings by way of a provisional measure cannot be made. However, the debtor may request the court, by way of a provisional measure, not to pay the money in the enforcement office to the creditor, in order to cover the damages arising from the delay and in exchange for security not less than fifteen percent of the claim.
If the lawsuit is decided in favor of the creditor, the provisional remedy decision is lifted. Upon the finalization of the relevant ruling, the creditor recovers the damages incurred due to the delay in receiving the claim from the security provided. The damages suffered by the creditor are determined and decided in the same lawsuit. These damages cannot be determined to be less than twenty percent in any case.
If the case is decided in favor of the debtor, the enforcement proceedings shall cease immediately. Upon the finalization of the judgment, enforcement shall be partially or completely reinstated in accordance with its content and without the need for a separate ruling. If the enforcement proceedings that compelled the debtor to file a negative determination lawsuit are found to be unjust and malicious, the court shall, upon request, order the creditor to compensate the debtor for the damages incurred due to the lawsuit. The damages to be determined shall not be less than twenty percent of the amount claimed in the unjust enforcement proceedings.
If the debtor has not obtained a provisional ruling in a negative determination lawsuit and the debt has been paid, the lawsuit shall continue as a restitution lawsuit.
A person who is obliged to pay in full a sum of money that they do not owe because they did not object to the enforcement or because their objection was lifted may, within one year from the date of payment, apply to the court under the general provisions to request the return of the money.
Negative determination and restitution lawsuits may be filed in the court where the enforcement office conducting the enforcement is located, or in the court where the defendant resides. The plaintiff in a restitution lawsuit is only required to prove that the money is not due.
In the last sentence of the fifth paragraph of the article, the compensation rate, which was previously 40%, was changed to 20% by Article 15 of Law No. 6352 dated 02.07.2012.
As can be understood from this regulation, the purpose of a negative determination lawsuit is to determine that a legal relationship or a right does not actually exist.
The claim that the legal relationship relied upon does not actually exist may be asserted either before or after enforcement proceedings. In order for the debtor to file a negative determination lawsuit before or after enforcement proceedings, it is necessary that the debtor has a legal interest in determining that he/she is not a debtor. The debtor may have an interest worthy of protection in determining that he/she is not a debtor without waiting for the creditor to take action. If such an interest exists, the debtor may file a lawsuit to determine that he/she is not a debtor before enforcement proceedings.
Otherwise, since enforcement proceedings do not establish the material relationship between the parties, it is possible for the debtor to request the court to determine that they are not liable even after the creditor has initiated enforcement proceedings, or even after the proceedings have been finalized.
It is useful to mention the consequences of accepting a negative determination lawsuit for the resolution of the dispute.
If, as a result of the negative determination lawsuit, the court concludes that the lawsuit is justified, it will decide to accept the lawsuit, i.e., to determine that the plaintiff is not a debtor. With the finalization of this decision, the creditor’s claim or the claim subject to enforcement is determined not to exist in terms of substantive law, and the dispute is definitively resolved. If the case is decided in favor of the debtor (accepted), the outcome of the enforcement proceedings and the issue of compensation to be awarded in favor of the debtor, as regulated in Article 72/5 of the Enforcement and Bankruptcy Law, come to the fore.
With the issuance of the judgment (without the need for it to become final), the enforcement proceedings are immediately suspended, and upon becoming final, the enforcement proceedings are canceled, and the plaintiff is released from the obligation to pay the debt.
Article 72/5 of the EBC provides that if the enforcement proceedings that forced the debtor to file a negative determination lawsuit were unjust and made in bad faith, the court shall order the creditor to pay the debtor’s damages incurred due to the lawsuit, which shall not be less than twenty percent of the claim subject to the proceedings, upon request.
However, there are certain conditions for awarding compensation in favor of the debtor who wins the negative determination lawsuit. First, since the creditor’s enforcement proceedings must have forced the debtor to file a negative determination lawsuit, there must be enforcement proceedings against the debtor. In this regard, if there are no enforcement proceedings against the debtor, compensation will not be an issue. Furthermore, in addition to the debtor requesting this during the negative determination lawsuit, the creditor must have acted unjustly and in bad faith in the enforcement proceedings that forced the debtor to file the lawsuit. It should be emphasized that it is not sufficient for the creditor to have acted unjustly in the enforcement proceedings; according to the clear provision of the law, it is also necessary that the proceedings were conducted in bad faith.
The enforcement is unjust when the creditor initiates enforcement proceedings despite having no claim or no claim in the amount demanded. Bad faith, as referred to in the text of the article, occurs when the creditor initiates enforcement proceedings solely to cause harm to the debtor, knowing that the claim is unjust.
Considering the specific case within the scope of all these explanations, enforcement proceedings were initiated against the debtor (plaintiff) by the creditor (defendant) on March 28, 2007, through attachment specific to bills of exchange based on a promissory note dated January 30, 2007. Due to an address search, a long period of time passed before the payment order was served on the debtor on February 25, 2011, and the debtor paid the debt with a document dated April 15, 2011. As can be seen, the defendant is in fact the creditor, and the debt was paid after the enforcement proceedings. Therefore, it cannot be said that the creditor acted unjustly or in bad faith in initiating enforcement proceedings for a debt that was not paid on its due date. However, the issue of whether compensation can be awarded even if the fact of “unjust and malicious intent” occurs after the enforcement proceedings, due to the creditor continuing the enforcement proceedings after the debt has been paid and the negative determination lawsuit having been filed thereafter, has been discussed. Article 72/5 of the Enforcement and Bankruptcy Code requires that the ‘prosecution’ forcing the debtor to file a negative determination lawsuit be unjust and malicious. Here, the term “prosecution” refers to the prosecution being unjust and malicious at the time of prosecution. requires that the “proceedings” forcing the debtor to file a negative determination lawsuit be unjust and in bad faith, and that the term “proceedings” here refers to the validity of the claim at the time of the proceedings. Therefore, the majority of the Board accepted that the conditions for compensation under Article 72/5 of the EBC did not exist in favor of the plaintiff in the specific case.
During the discussions at the General Assembly of the Court of Appeals, it was noted that Article 72/5 of the EBC requires that the “prosecution” forcing the debtor to file a negative determination lawsuit be unjust and malicious, that enforcement proceedings consist of a process, and therefore it is not correct to determine the fact of injustice and malice only based on the starting point of the enforcement proceedings. The creditor could also fall into an unjust and malicious situation after the enforcement proceedings but before the negative determination lawsuit was filed. Indeed, in the specific case, despite the entire debt being paid against a written document, the creditor unjustly continued the proceedings by not reporting this situation to the enforcement file, had a seizure carried out at the debtor’s home, and attempted to collect from the enforcement guarantor. It was argued that this unjust conduct forced the debtor to file the negative determination lawsuit and that the local court’s decision should be upheld with regard to the compensation awarded to the debtor pursuant to Article 72/5 of the Enforcement and Bankruptcy Law. However, this argument was not accepted for the reasons explained above.
Therefore, while it is necessary to comply with subparagraph (b) of Article 2 of the Special Chamber’s reversal decision, which was also adopted by the General Assembly of the Court of Appeals, the persistence in the previous decision is not in accordance with the procedure and the law.
Therefore, the decision to persist in this regard should be reversed.
CONCLUSION: 1- For the reasons explained in paragraph (I) above, the insistence is appropriate, and it is unanimously decided that the file should be sent to the 19th CHAMBER OF LAW for the examination of the defendant’s attorney’s appeals regarding the amount of moral damages.
2- For the reasons explained in (II) above, the defendant’s counsel’s appeal is accepted, and the decision to uphold the objection is overturned for the reasons stated in Article 2(b) of the Special Chamber’s overturning decision, pursuant to the Provisional Article 3 of the Civil Procedure Code No. 6100, which applies the Civil Procedure Code No. 1086 , and that the appeal deposit be refunded to the payer upon request, and that the right to appeal the decision within fifteen days of its notification be open in accordance with Article 440 of the same Code. This decision was made by majority vote at the second hearing held on 25.04.2018.
DISSENTING OPINION
The case concerns the determination that the defendant is not liable due to enforcement proceedings.
At the conclusion of the trial conducted by the court, the case was accepted, and compensation was awarded on the grounds that the defendant creditor acted in bad faith by continuing enforcement proceedings despite the debt having been paid in full after the enforcement proceedings.
A person who has a document regarding their claim can either obtain a court order to enforce it or apply directly to the relevant enforcement office to recover their claim.
However, if the claim is first subject to enforcement proceedings and then reflected in court in the form of an objection cancellation or
negative determination lawsuit, additional compensation of not less than 20% is envisaged for the debtor who objects to the proceedings knowing that they are indebted and for the creditor who initiates unnecessary proceedings knowing that they are not entitled to the claim.
The compensation in the specific dispute relates to the compensation for bad faith regulated in Article 72/5 of the Enforcement and Bankruptcy Law. The relevant article states, “…if the enforcement is found to be unjust and in bad faith, forcing the debtor to file a negative determination lawsuit, upon request, a decision shall be made to collect the damages incurred by the debtor due to the lawsuit from the creditor.”
The concept of “bad faith” in the text of the article can be summarized as the creditor initiating or continuing enforcement proceedings despite clear evidence and information that would render the enforcement unjust, by taking the opposite stance.
However, it is necessary to examine which stage of the “proceedings” the bad faith attributed to the creditor corresponds to. In other words, it must be clarified whether unjust and bad faith is an element to be determined as of the date of the “enforcement request” or whether it refers to the overall attitude and behavior during the process continuing until the date of filing the “negative determination” lawsuit.
Considering that the legislator specifically included the concept of “…compelling the initiation of a negative determination lawsuit” when drafting the text; when determining bad faith in enforcement proceedings, it would be more in line with the purpose and spirit of the regulation introduced for fairness and procedural economy to assess not only the intent at the time of the enforcement request but also the overall attitude and conduct throughout the process, to determine whether the debtor was unjustly forced to file a negative determination lawsuit.
In our case, based on the uncontested documents in the file, it appears that the defendant-creditor has collected the entire amount of the claim subject to the enforcement file. In this case, the defendant-creditor’s continued enforcement proceedings, placing a lien on the debtor’s household goods and attempting to collect additional payments from the guarantors, has made its bad faith indisputable.
In light of all these considerations, I believe that the court’s ruling for compensation for bad faith against the defendant-creditor is appropriate and that the decision should be upheld in this regard. Therefore, I disagree with the majority opinion expressed to the contrary.