Determination Of The Price In Vehicle Sales With A Simple Written Contract – Different Supreme Court Decision In Notary Deeds
Republic of Turkey
COURT OF CASSATION
GENERAL ASSEMBLY OF CIVIL LAW
2011/19-841
2012/144
March 14, 2012
4721/Article 684
2918/Article 20
CASE: Following the trial concerning the “cancellation of the objection” between the parties, the defendant’s attorney requested the review of the decision partially accepting the case, dated May 1, 2008, and numbered 2007/466 E.-2008/314 K., issued by the Tuzla 1st Civil Court of First Instance. The Supreme Court of Appeals 19th Civil Chamber, in its decision dated 18.02.2010 and numbered 2009/3729 E.-2010/1695 K., ruled as follows:
(… The plaintiff’s attorney stated that a contract was made between the parties for the sale of the minibus belonging to his client to the defendant for 25,000.00 YTL, with the price to be paid in installments, that a Final Sale Contract was subsequently drawn up by a notary public and the vehicle was registered in the defendant’s name, the defendant paid a total of 17,069.00 YTL but did not pay the remaining 7,931.00 YTL to his client, and that the defendant unjustly objected to the enforcement proceedings initiated by his client to collect the debt, and requested that the objection be overturned and that compensation for denial of enforcement be awarded.
In his response, the defendant’s attorney argued that the case should be heard in the Bodrum Courts, where the enforcement file subject to the requested cancellation is located, that his client paid all amounts due and acquired the vehicle through an unconditional, unencumbered, and unreserved final sale agreement, that the final sale contract contained a record stating that the seller had “received the full price,” and that there were no grounds for the lawsuit, requesting that the lawsuit be dismissed and that compensation be awarded in their favor.
The court, based on the allegations, defenses, and evidence gathered, found that the vehicle in question was sold at a notary public, and that although the plaintiff, as the seller, declared in the final sale agreement that he had received the full price, the handwritten car sale agreement submitted to the file and made between the parties stipulated that the price of the vehicle was 14,729.00 YTL in 13 equal installments of 1,133.00 YTL each, that the defendant did not deny his signature on this contract, and that 7 installments of the vehicle price totaling 7,931.00 TL had not been paid, that the plaintiff did not issue a warning to the defendant to default before the enforcement, and that the objection to the enforcement proceedings was unjustified and intentional, the court partially accepted the claim, and the defendant’s attorney appealed the ruling.
In the final sales contract dated May 15, 2006, which is included in the file, the plaintiff stated that they had received the full sale price. The defendant also argued that he had paid the sale price and requested that the case be dismissed. In this situation, since the earlier contract was informal, the court should have dismissed the case by considering the official sales contract made later, which stated that the sale price had been received in full. However, it was not correct to decide to accept the case with a written justification, and the judgment should have been overturned…
The case was overturned on these grounds and returned to the court, whereupon, following a retrial, the court upheld its previous decision.
After review by the H.G.K. and determination that the appeal against the decision to uphold was filed within the time limit, and after reading the documents in the file, the following decision was reached:
DECISION: The case concerns a request for the cancellation of an objection.
The court partially accepted the request.
Upon appeal by the defendant’s representative, the Special Chamber overturned the decision based on the grounds stated in the heading section above.
The court upheld its previous decision and appealed the ruling.
The dispute between the parties concerns whether the defendant buyer paid the plaintiff seller the full agreed price of the vehicle, based on a simple written protocol and a contract drawn up in a formal manner by a notary public.
Turkish Civil Code No. 4721 regulates movable property in Section 3, following immovable property. However, unlike immovable property, the Code only establishes rules regarding the subject matter, acquisition, and loss of movable property; it does not contain any provisions regarding the scope and limitations of this property.
This is because the scope of movable property is limited to movable goods that constitute its subject matter and items that constitute an integral part of the goods according to Article 684 of the TMK. There is no reason to require any other rules in this regard.
The restrictions on movable property arising from the law, apart from those based on public law (in this context, the Law on Firearms and Knives, the Highway Traffic Law), consist of a restriction covering all kinds of rights, such as the abuse of rights under civil law. (Oğuzman K., Seliçi Ö., Özdemir S.O., Property Law, Filiz Kitapevi, Istanbul, 2009, p. 586 et seq.)
One of the restrictions based on public law is Article 20(d) of the Highway Traffic Law No. 2918, which states: “All types of sales and transfers of registered vehicles shall be carried out by notaries based on the registration certificate or traffic registration records issued in the name of the vehicle owner; Any sale or transfer not carried out by a notary public shall be invalid; the sale and transfer transaction shall be reported to the relevant traffic registration authority and tax office within three business days for entry in the registry, and with this notification, the traffic registration transaction shall be deemed to have been completed in the name of the buyer.”
Although a price is specified in sales contracts drawn up by notaries, it is common practice that the sale price (insurance price) in the final sales contract is automatically determined according to the vehicle model and age, and the price stated in the final sales contract is reported by the parties so as not to contradict this price.
It is important to consider which price should be taken into account if this price is not correctly stated, or if the sale price in the final sale contract is stated as lower or higher. In resolving any disputes that may arise here, it is necessary to benefit from the provisions on collusion.
As is known, when the parties to a contract, with the aim of deceiving third parties, conceal the real situation and agree on a matter that does not correspond to their real intentions and is not valid between themselves, this is called collusion; transactions carried out in this way are also called collusive transactions. (HGK, 9.2.2005, 2005/1-19 E, 2005/42 K; 16.6.2010, 2010/1-281 E, 2010/323 K.).
In a sham transaction, there is always a legal transaction that appears to exist but is never actually desired by the parties, made solely to mislead third parties and deceive them, along with a sham agreement that this transaction is not valid between the parties. In some cases, in addition to these two, there is a secret transaction that is in accordance with the real intentions of the parties (what the parties actually want), but which they hide behind the apparent transaction for various reasons. Depending on whether there is a secret transaction between the parties, two types of collusion are discussed:
Absolute (simple) sham occurs when the parties do not wish to enter into any legal transaction between themselves, but enter into a transaction solely to appear to third parties as if there were a legal transaction between them.
In contrast, in relative (qualified) collusion, there is a legal transaction between the parties that is in accordance with their true intentions, but this transaction is concealed by another legal transaction made externally that does not correspond to their intentions.
This type of collusion may occur in the nature, parties, subject matter, and conditions of a contract.
In the case of collusion regarding the subject matter and conditions of a contract, the apparent legal transaction is in accordance with the true intentions of the parties. However, certain conditions and a specific part of the subject matter of the apparent transaction are arranged differently from the secret transaction between them. In this type of collusion, while the parties change certain conditions of the apparent contract, the contract as a whole, i.e., not its nature but certain conditions, does not comply with the secret contract. For example, there is such a sham where the sale value of the immovable property is shown as low in the title deed to pay less tax, or where the sale price is shown as high in the apparent (official) contract to prevent the exercise of the right of first refusal in order to obtain excess profit. As explained, the parties seriously intend to enter into the apparent contract and agree on its nature (character). However, the price is shown as less or more than the actual price. In other words, only the price of the apparent contract is changed. Fraudulent intent exists in part (in one element) of the contract, not in its entirety (Özkaya E., İnançlı İşlem ve Muvazaa Davaları [Transactions Based on Trust and Fraudulent Intent Cases], Şekçin, Ankara 2011, p. 173).
A sham contract does not require a specific form. It may be written or oral. Even if the apparent contract is subject to a specific form, the sham contract does not need to be in writing or in a formal manner. If the apparent contract is subject to a specific form, the rule that the sham contract must be proven by written evidence is not a rule required for the validity of the sham contract being in writing, but rather a rule required for it to be proven. (YİBK 5.2.1947, 1945/20, 1947/6) The party claiming the contrary to an apparent written contract must prove its claim with written evidence in accordance with Articles 289 of the HMUK and 13 of the BK. For a sham contract to gain probative force, it must be in writing, as required by the explicit provisions of the aforementioned laws, since it alters or invalidates the apparent contract. For example, vehicle sales are subject to formality. Even if the validity of the sham contract to be drawn up for the apparent transfer contract is not subject to form, its proof is only possible with written evidence. (YİBK 5.2.1947, 1945/20-1947/6)
Regarding the specific case:
The plaintiff sold his minibus to the defendant for 25,000.00 YTL, agreed that 10,271.00 TL would be paid in advance by January 31, 2006, and the remaining amount would be paid in installments, and registered the vehicle in the defendant’s name with a final sale contract. that the defendant paid 17,069.00 TL within this scope, and that upon the defendant’s failure to pay the remaining 7 installments totaling 7,931.00 TL, they initiated enforcement proceedings against the defendant with Bodrum 2nd The defendant claims that the proceedings were suspended as a result of the defendant’s objection and requests that the objection be dismissed, the enforcement proceedings be continued, and 40% enforcement penalty compensation be awarded.
There is an undated protocol drawn up between the parties, showing the sale price as 25,000 TL. Based on this protocol, the defendant paid a total of 17,069.00 TL, consisting of 10,271.00 TL in cash and 6,798.00 TL through the bank, and it is undisputed that the official sale deed dated 15.5. 2006 official sales deed dated 15.5.2006 shows the sale price as 16,387.00 TL.
Furthermore, the defendant did not raise any objection that such a protocol was not made.
The dispute is whether 7,931.00 TL was paid or not.
As is known, the fact that the sale price is stated as 16,387.00 TL in the notary sale contract stems from the fact that a price determined according to the model and age of the vehicle at the time of the notary sale is taken as the basis, based on the minimum insurance price; the inclusion of this price in the notary deed will not cause the contract between the parties to be invalid.
The parties seriously intend to enter into the apparent contract and agree on its nature. Only the price of the contract is being changed. Here, the collusion occurs not in the entire contract but in a part of it, namely the price element.
As explained above, although the transfer of a movable asset registered in the registry is subject to formality, the validity of the sham contract to be drawn up for the apparent transfer contract is not subject to formality; however, it can only be proven by written evidence.
Since the protocol put forward by the plaintiff was not denied by the defendant, the plaintiff proved that the movable property was sold for a price of 25,000.00 TL with simple written evidence and that they received 17,069.00 TL in cash and through the bank. Thus, since the plaintiff has proven the collusion regarding the price and that the sale price was 25,000.00 TL, the burden of proof that the entire price in the simple written contract was paid, i.e., that the remaining 7,931.00 TL was paid, now lies with the defendant.
Moreover, the protocol between the parties stipulated that the price was 25,000.00 TL and that a portion of the payments would be made. and the defendant did not object to this protocol in their defense, it is clear that the sale price of 16,387.00 TL in the notary public sale contract is not the actual price, and that the sale price is the price stated in the protocol, to which the defendant did not object, as accepted by the defendant.
It should be noted immediately that it is not possible to accept that the amount stated in the notary sale contract was received by the plaintiff. This is because if it is accepted that the plaintiff received the price of 16,387.00 TL stated in the sales contract, it will be seen that the total price, taking into account the price paid in cash, the installments paid through the bank, and the price stated in the notary sales contract, even exceeds the price stated in the simple written sales contract. For this reason, it must be accepted that the price indicated in the notary sales contract was not received by the plaintiff, and that the sales price of 16,387.00 TL is only a price determined by the system, outside the parties’ will.
Therefore, the transaction has become valid in accordance with Article 20 of Traffic Law No. 2918 regarding the transfer of movable property. The buyer’s failure to fully fulfill their obligation arising from the price does not alter the legal consequences arising from the formal contract. Failure to pay part of the actual price stated in the simple written contract will entitle the seller to demand payment of the unpaid portion of the price. The burden of proving that this price has been paid lies with the defendant, as explained above.
Therefore, the decision to resist, which points to the same issues, is appropriate and justified.
However, since the defendant’s attorney’s other appeals regarding the merits of the case, primarily the amount awarded, were not examined by the Special Chamber, the file must be sent to the Special Chamber for examination in this regard.
CONCLUSION: For the reasons explained above, the decision to resist is appropriate; the file shall be sent to the 19th Civil Chamber for the examination of the defendant’s attorney’s other appeals on the merits of the case, primarily the amount awarded. 14.03.2012