Assertion Of The Assignee’s Right Against The Landowner Is Subject To The Performance Of The Contractor Performance
General Assembly of Civil Chambers 2017/1611 E. , 2018/1128 K.
“Case Law Text”
COURT :Civil Court of First Instance
At the end of the trial held due to the “cancellation and registration of title deed” case between the parties, the decision dated 20.12.2012 and numbered 2009/129 E., 2012/652 K. given by Hatay 1st Civil Court of First Instance on the acceptance of the case was appealed by the defendant land owners’ attorney and the defendant contractor’s attorney, and with the decision of the 23rd Civil Chamber of the Court of Cassation dated 04.10.2013 and numbered 2013/3932 E., 2013/6077 K.,
“…The plaintiff’s attorney, claiming that there is a construction contract between the defendants in return for land share, that the plaintiff is a partner in the costs of the construction in accordance with the protocol between the defendant contractor and the plaintiff, but that the half shares of the independent sections falling to the contractor have not been transferred to the plaintiff even though the construction is completed, has requested and sued for the cancellation of the title deed of the independent sections stated in the petition and the registration of the half shares in the name of the plaintiff.
The defendant …’s attorney argued that the plaintiff did not fulfil its obligations in accordance with the protocol, and the other defendant land owners’ attorneys argued that the defendant contractor did not fulfil its obligations and requested the dismissal of the lawsuit.
Court decided to accept the lawsuit and to pay the amount deposited to the defendant … on the grounds that the protocol between the plaintiff and the defendant contractor is subject to the provisions of assignment of receivables, that the plaintiff can also claim this to the defendant landowners and that the plaintiff has deposited the missing work price.
The decision was appealed by the attorneys of the defendants.
A construction contract in return for land share dated 07.08.2007 was concluded between the defendant … and the other defendant landowners, and in the contract, the release stages of the independent sections to be allocated to the contractor were also determined. Subsequently, an ordinary partnership agreement dated 08.08.2008 was signed between the plaintiff and the defendants … and it was agreed that the construction would be carried out together.
In the aforementioned contract, the landowners are not parties, and the defendant … is the addressee of the landowners, the person to whom they can make demands and incur debts. In the case at hand, since the plaintiff … Dağlı, one of the ordinary partners, has requested the registration of the shares of the independent sections claimed to be given to him, and since it is understood that the title deeds of these sections are still in the possession of the landowners, there is nothing unlawful in the participation of the landowners in the lawsuit.
In that case, the work to be done by the court is the cancellation and registration of the title deed, and the independent sections subject to the lawsuit were purchased by the defendant contractor …, who is the contractor of the landowners, on 07.08. 2007 dated 07.08.2007, and as a result of the examination to be made in accordance with the aforementioned contract, if there is an independent section entitled by the defendant contractor; in this case, it consists of investigating and evaluating whether the conditions for the plaintiff to make a claim are met in accordance with the contract dated 08.08.2008 between the plaintiff and the defendant contractor, and reaching a judgement in accordance with the result.
It was not correct to accept the legal relationship between the plaintiff and the defendant … as an assignment of the receivable with an erroneous interpretation, without taking into account the aforementioned issues, and to make a written judgement with incomplete examination, and the decision had to be reversed…”
The case was reversed and the file was returned to its place, and at the end of the retrial, the court resisted the previous decision.
DECISION OF THE GENERAL ASSEMBLY OF LAW
The General Assembly of Civil Chambers examined the resisting decision and discussed the necessity after it was understood that it was appealed in due time and the documents in the file were read:
The lawsuit is related to the request for cancellation and registration of title deed.
Plaintiff’s attorney stated that a construction contract dated 07.08.2007 was signed between the defendant contractor and the other defendants who are the land owners, according to the contract, it was agreed that the construction would be carried out by the contractor and 8 flats would be given in return, the construction was completed, the flats numbered 1, 2 and 6 were sold and transferred to the new owners, the protocol signed between his client and the defendant contractor dated 08.
According to the protocol dated 08.08.2008 signed between the client and the defendant contractor, according to the construction contract signed between the contractor and the landowners in return for land share, the client became a partner with all rights and debts to the flats numbered 1, 2, 6, 7, 8, 9, 10 and 11, which should be given to the defendant contractor, and became entitled to own the flats in equal proportion, the client paid 136. 605,00-TL payment to the contractor for the construction of the construction,
but the defendant did not pay the amount to his client although he sold the flats numbered 1, 2 and 6 in violation of the provisions of the protocol, claiming that the right to demand ½ registration in the independent sections to be left to the contractor has arisen, and demanded and sued for the registration of the half shares of the flats numbered 7, 8, 9, 10 and 11, which will be given to the contractor in the completed building in accordance with the construction contract in return for land share signed between the defendants, in the name of the plaintiff.
The defendant contractor’s attorney stated that a construction contract was signed between his client and the other defendant landowners in return for land share, his client started the construction, after the foundation and the shelter part were completed, the plaintiff accepted the partnership offer made by the plaintiff to his client and a partnership protocol was issued with the plaintiff on 08.08.2008, the plaintiff became a partner in ½ of all expenses and revenues to be made as of this date, but he did not fulfil the obligations imposed on him by Article 8 of the protocol.
He defended the dismissal of the lawsuit by stating that he did not fulfil the obligations imposed on him by Article 8 of the protocol, that he avoided paying the amounts he should pay, that the claim that he paid 136.605,00-TL is not true, that his client has completed the construction to a significant extent in accordance with the contract with the landowners, and with the petition dated 21.06.2010, he requested a decision to register ¼ share of the independent sections subject to the lawsuit in the name of the plaintiff.
The defendant landowners’ attorney defended the dismissal of the lawsuit.
The court ruled that the contractor shall acquire a personal right if he fulfils his obligations pursuant to the construction contract in return for land share, and based on this personal right, he may request the land owner to register the ownership of the independent sections left to him in his name, or he may assign his personal right to third parties without the need to obtain the consent and consent of the land owner, provided that it is in writing, and the third party may assert his personal right against both the contractor and the land owner and request the registration of the ownership of the independent sections in his name,
In accordance with the construction contract between the contractor and the landowners in return for land share, the contractor may request the registration of the independent sections 7, 8, 9, 10 and 11, which should be given to the contractor but are still registered in the name of the landowners, In accordance with the provisions of assignment of receivables, it was accepted that the plaintiff was a successor to the contractor’s rights that could be asserted against the other defendants, and it was decided to cancel the title deed of the independent sections numbered 7, 8, 9, 10 and 11 registered in the name of the land owner defendants and to register and register ½ share in the name of the plaintiff, and to mortgage the remaining share in the name of the defendant land owners.
Upon the appeal of the defendant contractor’s attorney and the defendant landowners’ attorney, the decision was reversed by the Special Chamber for the reasons explained in the title section above.
The local court, in addition to the previous grounds, stated that the contractor partially assigned his personal right against the other defendants, who are the land owners, to the plaintiff, that this situation is in the nature of assignment of receivables made in accordance with Articles 162 and following of the Code of Obligations numbered 818, and that the lawsuit is related to the request for cancellation and registration of the title deed arising from the contractor’s failure to fulfil his obligation to the plaintiff,
The investigation of whether the contractor has fulfilled its contractual obligations to the landowners is not the subject of this case, there is no evidence that there is a dispute between the defendant contractor and the other defendant landowners in this direction, the investigation was carried out as stated in the Special Chamber reversal decision, the independent sections entitled by the plaintiff and the defendant contractor according to the provisions of the contract dated 07. 08.2007, the independent sections to which the plaintiff and the defendant contractor are entitled according to the provisions of the contract dated 07.08.2007 were determined and a decision was made accordingly.
The decision of resisting was appealed by the defendant contractor’s attorney and the defendant landowners’ attorney.
The dispute before the General Assembly of Civil Chambers by way of resisting: The dispute centres on whether the plaintiff can request the registration of ½ share of the immovables registered in the title deed in the name of the landowners in accordance with the provisions of assignment of receivables according to the protocol dated 08.08.2008 with the contractor, whether the plaintiff should investigate whether the conditions for the plaintiff to make a request from the landowners are met and whether a decision should be made accordingly.
First of all, it is useful to focus on the “work contract” and “construction contract in return for land share” and the “obligations of the contractor and the land owner”:
The work contract is defined in Article 355 of the abrogated Code of Obligations (CO) No. 818 (Article 470 of the Turkish Code of Obligations (TCO) No. 6098), which should be applied in the resolution of the dispute, as follows: “A contract is a contract in which one party (the contractor) undertakes to produce something in return for the price that the other party (the owner) undertakes to give.”
As a rule, construction contracts in return for the transfer of land shares, which are a type of works contract defined in Article 470 of the Turkish Code of Obligations numbered 6098 (6098 p. TCO) (818 p. BK., Art. 355), are contracts that include mutual performances and impose obligations on two parties.
The main obligations of the contractor in construction contracts are the obligations to create a construction (work) and to deliver this work to the owner. A number of other ancillary obligations arising from these two main obligations and ensuring the performance of these obligations in accordance with the contract are the good performance of the work, the obligation to perform the work faithfully and diligently in relation to the preparation of the work in accordance with the contract, the obligations regarding the tools and materials, the general notice obligation, the obligation to start and continue the work on time, and the obligation to make good against defects, which is an important obligation arising from the delivery obligation (Karataş İ; Works (Construction) Contracts, Ankara 2009, p.99).
When the contractor fulfils his obligations arising from the construction contract, he acquires personal rights against the land owner and may request the land owner to transfer the title deeds of the independent sections left to him in accordance with the contract. Pursuant to Articles 162 et seq. of the Code, the contractor may also transfer and assign this personal right to third parties, provided that it is in writing, without the need to obtain the consent and approval of the land owner.
In such contracts, in return for the contractor’s specified obligations, the owner of the land is obliged to pay a price for the work created on the land through “transfer of the land share” as a primary performance. In these contracts, the fee (price) to be paid by the work owner is paid in cash by the land owner. Due to the fact that such contracts are usually spread over years, it is not possible to achieve the purpose of the contract with the fulfilment of this single wage obligation during the performance period.
For this reason, some side obligations must also be fulfilled by the owner. These are obligations such as delivery of the land without any legal or de facto obstacle, obtaining the zoning status of the land and the construction licence, having the plans and projects approved by the municipality, which is the competent authority, giving power of attorney to the contractor when necessary for works and transactions such as the sale of the independent section deeds deserved by the contractor for the provision of finance, the establishment of a condominium easement, and obtaining the occupancy licence, and the transfer of the land share determined in the contract.
As a rule, in the types of contracts that impose obligations on both parties, if one of the parties does not have an obligation to perform in advance, the debtor who has not fulfilled his/her own performance will not be able to request the other party to fulfil his/her performance (Kılıçoğlu A.M: Obligations Law General Provisions, Ankara 2012, p.581). This issue is regulated in Article 81 of the Code with the mandatory provision “The person who demands the performance of a contract containing mutual undertakings must have performed or offered to perform his own obligation, unless he has the right to benefit from a deadline according to the terms and nature of the contract”, and the same issue is also regulated in Article 97 of the TCO.
However, as mentioned above, in order for both the contractor and the successor third party, who assigns his personal right in writing, to assert this right against the land owner, it is obligatory that the contractor has fully fulfilled his obligation under the contract (İzzet Karataş, Works Contracts, 2004, p. 34 et seq.).
Since construction in return for land share contracts are also one of the types of contracts that impose obligations on both parties, the question of the order of performance, that is, which of the parties will be obliged to fulfil their obligations first, is important. In such contracts, the contractor party, who is obliged to construct the building, must first fulfil its performance in accordance with the contract, and then request the landowner to fulfil its performance. In other words, firstly, the work should be carried out in accordance with the contract, and then the landowner should be requested to fulfil its performance.
The landowner may fulfil the performance of the land share transfer in different ways. He may fulfil this performance either by transferring the agreed land shares to the contractor when the construction is completed, or by gradual title deed transfer according to the stage of construction in the contract. In this second case, i.e. in the gradual transfer of title deeds, the contractor is entitled to demand the deeds agreed to be transferred at each stage from the landowner.
As a matter of fact, the same principles were emphasised in the decision of the General Assembly of Civil Chambers dated 24.02.2016 and numbered 2014/23-724 E., 2016/168 K. and dated 26.02.2016 and numbered 2014/23-569 E., 2016/181 K.
When these explained rules of material law are evaluated by revealing the concrete case;
A construction contract was signed between the defendant contractor and the other defendant landowners in return for land shares dated 07.08.2007 and numbered 12425 of the 2nd Notary Public of Hatay. According to the contract, it was agreed to build a block consisting of a basement, a ground floor and three normal floors according to the project to be drawn in accordance with the plan and project to be obtained from the local municipality and science works and the attached sketch on the immovable property numbered 7337 parcel in Çekmece village, Antakya district of Hatay province registered in the name of the land owners.
In case the construction is completed by the contractor, 1/3 of the ground floor, flat no. 2, all of the normal flats no. 3, 4 and 5 on the first floor will belong to the land owners, and the remaining 2/3 of the ground floor, flat no. 2 and flats no. 6, 7 and 8 on the second floor and flat no. 9 and duplex flats no. 10 and 11 on the third floor will belong to the contractor.
According to Article 12 of the contract, the project cost, building supervision, municipality related project expenses, floor easement fees, title deed related fees, insurance premium costs, material costs, work and labour costs will belong to the contractor.
In addition, the contract regulates when the independent sections will be gradually transferred to the contractor during the construction phase of the construction.
A protocol dated 08.08.2008 was signed between the contractor and the plaintiff. According to the protocol, it has been agreed that the plaintiff shall share all the obligations undertaken by the contractor with the construction contract dated 07.08.2007 dated 07.08.2007 signed by the contractor with the landowners in return for land share, and shall be an equal partner to the rights and responsibilities.
According to Article 7 of the protocol, it is stated that the plaintiff will be the owner of half of the independent sections to be given to the contractor in the event that the plaintiff fulfils its performance in accordance with the protocol, and that the contractor will benefit equally from all the rights and benefits to be obtained from the construction contract in return for land share, as in the debt and responsibility.
In the additional expert report dated 07.05.2011 obtained by the court, it was determined that the cost of the unfinished works in the construction made pursuant to the construction contract signed between the contractor and the landowners in return for land share was 3.700,00-TL and the balance 14.957,00-TL regarding the construction supervision service fee was still not paid. İn the expert report dated 11.05.2012 from the financial advisor expert, it was determined that the defendant contractor did not pay 19.616,68-TL SSK premium within the scope of the construction.
In the letter of Hatay Tax Office dated 20.07.2012, it was stated that the defendant contractor had a tax debt of 6.463,29-TL due to the construction work activity since 01.03.2008.
According to the protocol dated 08.08.2008 signed with the plaintiff, the defendant contractor undertook to transfer half of the independent sections to the plaintiff based on his personal right in accordance with the construction contract dated 07.08.2007 signed with the defendant land owners. However, in order for both the contractor and the plaintiff, who has transferred his personal right in writing, to assert this right against the defendant landowners, it is mandatory that the contractor has fully fulfilled his obligations under the contract.
For the reasons explained, the court should first determine whether the contractor deserves the independent sections subject to the lawsuit according to the provisions of the construction contract dated 07.08.2007, and if the contractor deserves an independent section, it should be investigated whether the conditions for the plaintiff to request an independent section in accordance with the provisions of the protocol dated 08.08.2008 signed with the defendant contractor, and a decision should be made accordingly, but these issues have not been complied with and a judgement has been established with incomplete examination and evaluation.
As such, according to the mutual claims and defences of the parties, the minutes and evidence in the file, and the reasons explained in the reversal decision, it is contrary to the procedure and the law to resist the previous decision, while the reversal decision of the Special Chamber, which was also adopted by the General Assembly of Civil Chambers, should be complied with.
For the reasons explained, the decision of resistance should be reversed.
CONCLUSION:
For the reasons explained above, the appeal objections of the defendant contractor and the defendant landowners’ attorneys are accepted and the decision of resisting should be reversed in accordance with Article 429 of the Code of Civil Procedure No. 1086, which is being applied according to the Provisional Article 3 of the Code of Civil Procedure No. 6100 for the reasons shown in the Special Chamber reversal decision. It was unanimously decided on 23.05.2018, in accordance with Article 440 of the same Law, to return the pre-appeal fee to the depositor upon request, and to be open for correction of the decision within fifteen days from the notification of the decision.
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