Supreme Court Decision: If A Bill Of Exchange Held At A Bank Is Lost, Its Cancellation May Be Requested Due To Loss
T.C.
COURT OF CASSATION
11th CIVIL CHAMBER
CASE NO: 2016/9880
DECISION NO: 2018/2363
DATE OF DECISION: 03.04.2018
>>LOSS OF A BILL OF EXCHANGE HELD BY THE BANK – THE BANK’S LEGAL INTEREST IN THE REQUEST FOR CANCELLATION OF THE BILL OF EXCHANGE DUE TO LOSS
SUMMARY: The case concerns a request for cancellation of a promissory note due to loss, and the court ruled to dismiss the case on the grounds that the plaintiff had no legal interest. However, it is understood from the case file that the plaintiff bank acquired the promissory notes requested to be canceled through collection endorsement and holds the status of an agent holder. Since collection endorsement is a form of representation specific to negotiable instruments, intended to protect the rights associated with the collection of the instrument’s value, the bank, as the holder in due course, has the right to request the return of the instrument from a third party or to request its cancellation due to loss. In this case, the court must decide, taking into account the plaintiff’s legal interest in filing a lawsuit for the cancellation of the negotiable instrument.
In the case heard without a defendant, the plaintiff’s attorney requested that the decision dated 08/01/2016 and numbered 2015/485-2016/42 issued by the Malatya 4th Civil Court of First Instance be reviewed by the Court of Cassation, and it was understood that the appeal petition was filed within the time limit. After hearing the report prepared by Review Judge Özlem Ezgi Solak for the case file and reading and examining the petition, pleadings, trial minutes, and all documents in the file, the matter was discussed and considered:
The plaintiff’s attorney claimed that the promissory notes given to his client with a collection endorsement were lost at the branches and requested a decision to cancel the valuable documents.
Based on the entire file, the court ruled to dismiss the case on the grounds that lawsuits regarding the cancellation of valuable documents must be filed by the authorized holder and that the plaintiff bank, which held the bills of exchange with collection endorsement, had no legal interest.
The plaintiff’s attorney appealed the decision.
The case concerned a request for the cancellation of promissory notes due to loss, and the court dismissed the case on the grounds that the plaintiff had no legal interest. However, it is understood from the case file that the plaintiff bank acquired the promissory notes for which cancellation was requested through collection endorsement and had the status of an agent holder. Since collection endorsement is a form of representation specific to negotiable instruments, intended to protect the rights associated with the collection of the bill’s value, the bank, as the holder in due course, has the right to request the return of the bill from a third party or to request its cancellation due to loss. In this case, the court should have ruled that the plaintiff had a legal interest in filing a lawsuit for the cancellation of the negotiable instrument, and therefore, the decision to dismiss the case in writing was incorrect, and the decision should be overturned.
CONCLUSION: For the reasons explained above, the plaintiff’s attorney’s appeal was accepted, and the ruling was REVERSED in favor of the plaintiff. The advance appeal fee paid shall be refunded to the appellant upon request. The decision was made unanimously on 03/04/2018.