Only The Words “Collateral Bond” Should Be Written On The Bond Issued As Collateral.
Republic of Turkey
COURT OF CASSATION
GENERAL ASSEMBLY OF CIVIL LAW
CASE NO: 2017/12-1140
DECISION NO: 2018/563
DATE OF DECISION: 3/28/2018
>IF THE WORD “SECURITY CERTIFICATE” IS WRITTEN ON THE FRONT AND BACK OF THE BILL OF EXCHANGE ISSUED AS A SECURITY CERTIFICATE , BUT IF IT DOES NOT SPECIFY WHAT IT IS A GUARANTEE FOR, IT DOES NOT AFFECT ITS CHARACTER AS A NEGOTIABLE INSTRUMENT OR NEGOTIABLE INSTRUMENT PROCEEDINGS.
Following the trial concerning the “objection to the debt” between the parties, the Ankara West Enforcement (Civil) Court accepted the objection and issued a decision dated 25.02.2014, No. 2013/873 E., Upon the creditor’s representative requesting an appeal review of the decision, the Supreme Court of Appeals 12th Civil Chamber issued its decision dated May 8, 2014, numbered 2014/11364 E., 2014/13598 K.,
(…An enforcement proceeding was initiated against the debtor based on a promissory note through attachment specific to bills of exchange. The debtor applied to the enforcement court within the time limit, requesting that the proceeding be canceled on the grounds that the document on which the proceeding was based was a security document.
The presence of the phrase “is collateral” in the promissory note underlying the proceedings does not, in accordance with the established case law of our Chamber, require the acceptance of the note as collateral in and of itself, unless it is explained what it is collateral for.
In the present case, since the debtor failed to submit a written document valid under enforcement law, as required by Article 169/a of the Enforcement and Bankruptcy Code, stating that the document was provided as collateral and objecting to the debt, and since the documents submitted to the file regarding the vehicle sale were not accepted by the creditor, it is inappropriate for the court to decide to accept the claim instead of rejecting it…)
The case was overturned on these grounds and remanded for retrial, at the end of which the court upheld its previous decision.
After review by the General Assembly of the Court of Appeals, it was determined that the appeal against the decision to uphold the previous ruling was filed within the time limit, and after reviewing the documents in the file, the following decision was reached:
DECISION: The claim relates to an objection to the debt.
The debtor stated that the bill of exchange subject to enforcement was a security bill and that a note to this effect was present on the back of the bill, that an oral agreement had been made between the creditor and the debtor on 04.08.2013 regarding the purchase of a tractor, that the tractor price of 13,500.00 TL on October 20, 2013, and that … would complete the official traffic-related procedures for the tractor and prepare it for sale by that date. They went to the notary to transfer the tractor, but upon discovering that it had been banned from traffic, the sale could not be completed. that the ownership still belonged to …, that it was not possible to make payment for a vehicle that could not be transferred, and that there was no debt, and that there was no other commercial relationship with … other than the purchase of the tractor, requesting that the enforcement be canceled.
The creditor’s representative argued that the mere presence of the phrase “security bond” on the back of the promissory note underlying the enforcement did not affect its status as a negotiable instrument, and that according to Supreme Court case law, for a bond to qualify as a security bond, either the reason for providing the security must be stated on the bond itself or a separate document must specify that the bond is a security bond. The instrument subject to enforcement is not a security bond but was issued as consideration for a cash loan given by the creditor’s client to the plaintiff. The power of attorney dated September 19, 2013, is a power of attorney granted to İhsan Yılmaz, who is not a party to the lawsuit, to sell the tractor at any price and under any conditions he wishes. arguing that the power of attorney does not mention the promissory note and that the plaintiff is not a party to the power of attorney, requesting that the complaint be dismissed and that the defendant be ordered to pay compensation of not less than 20% of the debt subject to enforcement.
The Local Court accepted the complaint and decided to cancel the enforcement, on the grounds that the promissory note in question had the words “guarantee promissory note” written on the back and did not contain an unconditional promise to pay a specific amount, and that proving the existence of the claim required a trial.
Upon appeal by the creditor’s representative, the decision was overturned by the Special Chamber for the reasons explained in the heading section above.
Given that Article 776/b of Turkish Commercial Code No. 6102 clearly states that the instrument must contain “an unconditional promise to pay a specific amount…”, the court held that an instrument bearing the phrase “it is a guarantee instrument” cannot be said to be unconditional, Since the existence of the claim will only become apparent as a result of the trial, and given that the phrase “it is a guarantee bill” was written on the back of a bill that was not a guarantee bill and the creditor accepted the bill after seeing this writing, it cannot be argued that this bill is not a guarantee bill.
The creditor’s representative appealed the decision to resist.
The dispute brought before the General Assembly of the Court of Appeals through the appeal process concerns whether the notation “This is a Guarantee Bill” on the bill, “in the absence of clarity as to what it guarantees,” negates the abstract nature of the bill, and whether the bill of exchange is valid based on the conclusion reached here, as well as whether it can be asserted against this bill of exchange.
The creditor’s representative appealed the decision to resist.
The dispute brought before the General Assembly of the Court of Appeals through the appeal process centers on whether the notation “This is a Guarantee Note” on the note eliminates its abstract nature if there is no clarity regarding what it guarantees, and whether the bill of exchange is valid based on the conclusion reached here. and how such a claim against this bill of exchange should be proven.
First, it must be determined whether the document on which the enforcement is based qualifies as a bill of exchange.
According to Article 776 of Turkish Commercial Code No. 6102, the promissory note must contain the words “promissory note” or “negotiable instrument” in the text of the instrument, and if the instrument is written in a language other than Turkish, the word used in that language as the equivalent of promissory note or negotiable instrument, an unconditional promise to pay a specific amount, the maturity date, the place of payment, the name of the payee or the person to whose order it is payable, the date and place of issue, and the signature of the issuer.
In this context, specificity (determinacy) is one of the fundamental elements of negotiable instruments. Considering their negotiability, all elements of a promissory note must be clear, unambiguous, and not open to interpretation. As Öztan also states, the issuance of a bill of exchange and promissory note is a “non-conditional” transaction (Öztan, F.: Kıymetli Evrak Hukuku [Law of Negotiable Instruments], 2nd ed., Ankara 1997, p. 451). Indeed, Article 777 of the Turkish Commercial Code states that a bill of exchange that does not contain the mandatory elements is not a bill of exchange, and then fills in any gaps by introducing a supplementary legal rule regarding the maturity date, place of issuance, and place of payment, thereby supporting the principle of certainty. While the inclusion of provisions such as notice, consideration, interest, exemption from protest, and authority is accepted, the inclusion of provisions that eliminate the abstract or specific nature of the bill of exchange on the promissory note eliminates its status as a negotiable instrument.
In light of the above explanations and legal regulations, when the specific case is evaluated;
The promissory note dated October 20, 2013, with a value of TL 13,500.00, relied upon in the proceedings, bears the phrase “security note” on its reverse side. Although there is a security clause on the promissory note, it does not specify what it secures, so this phrase does not eliminate the abstract nature of the promissory note. For the promissory note to be accepted as collateral, it must be proven that it is a collateral note either by the text on the front or back of the promissory note or by a separate document (as provided for in Article 169/a of the Enforcement and Bankruptcy Law). Indeed, the Supreme Court of Appeals General Assembly of Civil Law, dated March 14, 2001, 2001/12-233 E., 2001/257 K.; June 20, 2001, No. 2001/12-496 E., 2001/534 K.; February 24, 2010, No. 2010/19-67 E., 2010/99 K.
Given this situation, the local court should have complied with the Special Chamber’s reversal decision, which was also adopted by the General Assembly of the Court of Appeals, but its insistence on the previous decision based on erroneous reasoning is contrary to procedure and law.
For this reason, the decision to insist should be reversed.
CONCLUSION: The creditor’s attorney’s appeal is accepted, and the decision to uphold the ruling is REVERSED for the reasons stated in the Special Chamber’s reversal decision. If requested, the appeal fee shall be refunded to the payer. The decision is final and cannot be appealed. It was unanimously decided on March 28, 2018.