ABSTRACT
Two significant methods for providing security for the purpose of a guarantee are endorsements of pawn and accommodation conveyance endorsement. In the context of the abstract acknowledgement of debt for negotiable instruments and the provisions of legislation regarding a pledge, a hybrid but very powerful guarantee instrument has developed. In this respect, the determinants of rights under the deed of the holder are whether the share of the deed and deed ownership goes to the bearer, and whether or not royalties are made visible in the external relationship.
I. INTRODUCTION
In this article, endorsement of pawn and accommodation disposition endorsement for the purpose of a guarantee, which is the method of providing security for the purpose of a guarantee, is examined. To be able to fully explain these two security methods, firstly, the definition of a security, the nature of the abstract acknowledgement of debt of the instruments, and the types of endorsement in terms of the purpose of regulation are provided. Endorsement of pawn and accommodation disposition endorsement for the purpose of a guarantee is subsequently examined within the scope of the doctrinal discussions.
II. DEFINITION OF SECURITIES
In Article 645 of the Turkish Commercial Code number 6102 (“TCC”)1, the definition of a security is as follows: “Securities are such instruments that the rights they contain cannot be transferred to others as they cannot be forwarded separately from the bill.” In light of this definition, we can identify two main components. The first is that the right is connected to the instrument and cannot be transferred without the instrument; the second is that the right cannot be transferred separately from the bill2. For this reason, a security may be seen as an instrument that is subject to special formality requirements and a debt cannot be demanded and a loan cannot be paid without the instrument to which the right is attached.
A. Legislation Regarding Securities
Provisions regarding securities are regulated in the TCC. However, it should be emphasized that the legal institutions that arise with the issuance of securities are not limited to the right to claim and the occurrence of the debt; where the conditions are realized, legal institutions which may be exemplified as proxy and defiance may also arise. Therefore, all provisions on securities are not limited to the scope of the TCC. The Turkish Code of Obligations3 number 6098 (“TCO”) and the Turkish Civil Code4 number 4721 also contain regulations on securities. In addition, law number 5941 regulating bank cheques5 also contains regulations on cheques, in particular criminal provisions
B. Rights to be Connected to the Deed in Securities
One of the factors that distinguishes securities from other forms of debt or debt recognition is that the related right is bound by securities. Since securities contain a right, one or more rights per year are attached to securities. These rights have an economic value that can be measured or expressed in terms of money6. In other words, there is a private law right7. It is crucial to state that securities contain a right. A security with no rights is not possible. Otherwise any related instrument would not have access to the security. Due to the fact that securities are connected with rights and have been identified with rights, any related right is transferred with the security.
In Article 645 of the TCC, two results emerge when the right is examined in terms of its affiliation to the instrument. These results are stated by Bozer and Göle as follows: “In order to be able to use the rights contained in the security or to use security must be submitted. This right may not be requested or used separately from the security. The debtor of the security is obliged to pay only in return for the delivery of the instrument to him. The transfer of the right contained in the security is subject to the transfer of the security. The right contained in the security is not transferable separately from it. Therefore, it is not possible to describe as a security an instrument that cannot be transferred8.
C. Legally Promissory Notes (Instruments) that have an Abstract Acknowledgement of Debt There are two types of securities, casual and non-causal. It is important to state that carrier receipts, warehouse receipts, warrants, and bills of lading are deed-based securities, while promissory notes (ie, policies, bonds, cheques) issued by law in a limited number of documents are abstract securities.
There are two types of securities, casual and non-causal. It is important to state that carrier receipts, warehouse receipts, warrants, and bills of lading are deed-based securities, while promissory notes (ie, policies, bonds, cheques) issued by law in a limited number of documents are abstract securities. The concept of instruments is a sub-concept that comprises legally promissory notes or order securities in accordance with Article 824 of the TCC and is used only for the purpose of expressing the policies, bonds and cheques. In the doctrine and court decisions, there is a differentiation between securities: casual and non-casual. The principle of abstraction is applied in the case of non-casual securities. Policies, bonds and cheques are non-casual securities, while shares, bills of lading, mortgaged debt bonds are examples of securities in which the principle of abstraction does not apply9.
The basis of abstract security, and, accordingly, the qualificaiton of abstract acknowledgement of debt of the security, is the 18th article of the TCO. The article reads as follows: “Debt recognition is valid even if it does not include the cause of the debt.” With this provision, it is possible to conceive of an abstract acknowledgement of debt in Turkish law, in other words, independent debt recognition. The source of security is Article 18 of the TCO10. The features and importance of abstract security are explained by Öztan as follows: “Abstract security, the original debt relationship (the basic debt relationship) that causes the arrangement of the deed, is not possible to understand from the deed. Abstract deeds are not bonds that are not based on a basic relationship; so these deeds are based on a certain reason. This basic relationship is usually any act. The deed contains the claim arising from this legal treatment. However, there is no link between the deed and relevant legal relationship. Checking the deed, it is not possible to understand the underlying relationship. Therefore, in case of a dispute, the bearer can only base his case on security; it does not have to prove the existence and nature of the underlying ini real debt relationship. The issue of the declaration of a valid basis or the declaration of the relevant defecence and the issue of proof was uploaded to the debtor11."
One of the most significant features of abstract security is the fact that a creditor can only open a case on the basis of abstract documents and does not have to prove the existence and validity of the basic debt relationship12. The reason for this possibility is that abstract securities have a right or an abstract manner independent of the sub legal relationship. For this reason, although it will be examined in detail in the future, it is possible to sue the securities that are given for the purpose of guarantee, independently of the sub legal relationship in accordance with the principle of abstraction.
III. ENDORSEMENT TYPES AND ENDORSEMENT OF PAWN IN PROVIDING SECURITY FOR THE PURPOSE OF GUARANTEE
A. Definition of the Concept of Endorsement
As for the issuance of securities, they are subject to special conditions and are subject to special procedures for transfer. Endorsement is a type of transfer which is issued for promissory notes in the Turkish Commercial Code. “Endorsement is a declaration of will in a promissory note to transfer the right that is included in the deed13." With the endorsement of securities, the rights that are related to the deed shall be passed to the bearer; in other words, the person who takes over the deed. Article 684 (1) of the TCO makes the following amendment: “All rights arising from the policy14 are transferred with the transfer of possession and endorsement.” According to Öztan, this means not only the ownership of the policy but also the inheritance of the immovable right15. As a result, the beneficiary who first endorsed the policy, or the endorsement of the endorser, the owner of the policy to pay the price of the deed to the bearer, is given the authority to collect the cost of the policy16. This is the most significant result of the principle of abstraction. Endorsement is divided into three types according to the purpose of arrangement: endorsement in full, endorsement for collection, endorsement of pawn.
B. Types of Endorsement According to Purpose
1. Endorsement in Full
“Endorsement in full is made in order to transfer all rights arising from the policy to the person who takes over the deed17." The person to whom the policy has been transferred with endorsement in full may be able to transfer the policy with endorsement in full, endorsement for collection, or endorsement of pawn18.
“In the event that there is no record that an endorsement has been made for the purpose of collecting or mortgaging, it is assumed that the endorsement is done as an endorsement in full19.""
2. Endorsement for Collection
The transfer of the endorsement for collection is realized as endorsement and transfer of possession (submisson of the security). However, the transfer of all rights on the policy is not in question as it is with endorsement in full. The scope of the transferred right is limited according to the endorsement in full. Endorsement for collection is a type of endorsement made to ensure that the policy price is collected by another person20. Endorsement for collection creates a proxy relationship. The proxy relationship is established between the endorser who made the endorsement for collection and the bearer who acquired the policy through endorsement for collection. The endorser who made the endorsement for collection wants from the bearer to policy price on its own behalf21.
3. Endorsement of Pawn
Endorsement of pawn is a type of endorsement that is arranged in Article 689 of the TCO. The first paragraph of Article 689 of the TCO has been amended as follows: If the endorsement includes “consideration is guarantee”, “consderation is pawn” or any other record stating the pledge, the bearer may use all rights arising from the policy; however, an endorsement made by him is in effect of endorsement for collection. This clause does not fully resolve the problems related to the endorsement of pawn and has caused controversy. The purpose of the endorsement of pawn is the basis of the discussion of the nature of the endorsement of pawn and the possibilities of the opportunities involved.
The differences in the results from endorsement of pawn, endorsement in full, and endorsement for collection are, in summary, that the choices of the bearer who transferred the deed through endorsement of pawn are different from the choices of bearers who are transferred the deed through endorsement in full.
Firstly, in Turkish law, it is tried to eliminate the nature of the the right of mortgage which is regulated as an absolute and subsidiary right and the values of the promissory notes that have abstract acknowledgement of debt. Accordingly, the subject of the discussion is whether the possession of the deed will transfer or not and, correspondingly, whether the bearer will be the owner of the deed. In addition, a secondary issue affecting the guarantee function for bearers who are transferred the deed via endorsement of pawn is the existence of the possibility of resorting to the follow-up to the instrument. “A transferee who takes over the deed via endorsement of pawn is not the owner of the deed or of the right to claim on the deed. The bearer who is transferred via endorsement of pawn is still the owner of the claim on the deed but with the endorsement of pawn he loses the rights that are transferred to the person. The transferee who takes over the deed via endorsement of pawn can present the deed for payment, collect the price, and make a formal protest; the applicant may denounce the non-payment to the debtor and apply to them under the right of recourse. However, the limit of the scope of the actions that can be done draw the purpose of pawn not authorized to compromise, waiver or release of debt22."" The reason why the bearer is not authorized for compromise, waiver, or release of debt is that, with the endorsement of pawn, there is no proxy relationship between the bearer and the endorser. The bearer in the endorsement of pawn is not the proxy of the endorser. For this reason, it will only be authorized to carry out transactions related to the collection of the right of mortgage related to the principal claim.
The most important question regarding endorsement of pawn is whether endorsement of pawn has the function of conveyance as does endorsement in full. On this point, some argue that the endorser in an endorsement of pawn does not have guarantee to pay the written price in the deed, and to defend that endorsement of pawn does not have a conveyance function because the possession of the deed does not transfer to the bearer. On the other hand, others argue that, due to the nature of endorsement of pawn, there is a conveyance function and the endorser acts with intention to guarantee the payment of the price in the deed. According to Bozer and Göle, the purpose of endorsement of pawn is to guarantee against the risk of non-payment of debt arising from the internal relations between the bearer and the endorser via endorsement of pawn of the policy with the amount written in the instrument23.
The two views in the doctrine as to whether endorsement of pawn has a conveyance function are as follows: “The first opinion defends the view that there is a legal gap on this issue; the law needs to be supplemented as required by Article 1 of the Turkish Civil Code, to ensure that the economic function of the endorsement of pawn is secured by the right to receive the instrument, and that the revenue from the pawn is limited to the value of the deed, and the mortgage holder guarantees the existence and payment of the claim personally. For these reasons, recognition of the mortgagor endorser as not personally responsible does not comply with the economic function of the endorsement of pawn. Unlike endorsement for collection, endorsement of pawn does not create a proxy relationship between the parties and the endorsement of pawn has a conveyance function"24
First of all, the right of mortgage is a legal institution that guarantees payment of the claim. The reason for the existence of right of mortgage is to provide conveyance. Accordingly, it is not possible for the holder of the mortgage to establish the right of mortgage in the absence of the will to pay. Although it is considered that during the establishment of the right of mortgage, the will of the provider is not redeemed foreclosure; the purpose of guaranteeing the payment of the claim will be available. “The right of mortgage is generated from a subsidiary of a valid claim, and this is the right to guarantee the claim. The right of mortgage is a limited real right in the right that gives the creditor the authority to collect the goods or the right (right to claim) that belongs to the pledge to the money by executing it primarily through levy an execution25."" In addition, endorsement is the transfer form of promissory notes and these are the bonds that constitute an abstract debt in the promissory notes. Personal defences cannot be invoked due to the ability of promissory notes to create abstract debt. In this context, endorsement of pawn creates an abstract debt in order to guarantee payment of the claim with a promissory note (except cheuqes). In other words, with the endorsement of pawn, the endorser pays a promissory note with the will to guarantee the payment of the claim to the bearer. “Endorser delegates the policy with an endorsement of pawn in order to provide a debt against the endorsee. In this regard, the contract must also have been committed to the acceptance and payment. Even in our opinion, there cannot be a condition of irresponsibility, as this requirement does not correspond to the quality of the endorsement of pawn26."" According to the second opinion, in which endorsement of pawn does not have a conveyance function; “that the ownership of the deed does not transfer with the endorsement of pawn the ownership of the deed, despite the endorsement, stays the endorser, endorsee as the deputy of mortgagor endorser receives the authority to collect the price, as in the endorsement for collection, the endorsee of the deed can be transferred with the endorsement for collection, endorsee cannot demand the price of the deed, in order to hold liable to endorser policy must not have been otherwise agreed in order for the policy not to be accepted and be held accountable for non-payment, in contrast to endorsement for collection and pawn, it is based on the grounds that it was brought in the endorsement for collection27."
Case law of the Supreme Court of Appeals dated 11.10.1969 and numbered E.727 and K. 749 and the case-law of the 12th Civil Chamber of the Supreme Court of Appeals are effective in this opinion. However, the related decisions adopted the endorsement of pawn as an endorsement for collection and the relationship between the government and the bearer as a proxy relationship, an opinion that we did not maintain. “According to the 11th Chamber of the Supreme Court of Appeals, since the delivery of the deed with the endorsement of pawn does not transfer the right of ownership on the deed to the mortgage holder, the ownership of the deed remains with the endorser. As a result, the buyer who takes the deed via endorsement of pawn does not apply to the owner of the deed. It is difficult to reconcile this justification of the Supreme Court with the principles of pledge law. Because, in accordance with the rules of pledge law, the loss payee may start executive proceedings in cases where the claim is not paid, and the pledge can be tracked in accordance with the provisions of foreclosure. In the case that ownership of the property that subject of the mortgage does not constitute an obstacle to the pursuit and foreclosure. In the endorsement of pawn, collecting the price of a mortgage from the debtor of the policy in the sense of pledge law is foreclosure; in the sense of policy law, if the loss payee cannot obtain the policy price from the debtor, the application to the mortgagor is a foreclosure."28
IV. ACCOMODATION ENDORSEMENT IN FULL FOR THE PURPOSE OF A GUARANTEE
In addition to the endorsement of pawn, the possibility of issuing the instruments for the purpose of guarantee is the transfer of a deed within the scope of accommodation endorsement in full. In this case, in order for a transaction in faith to be available, a faith agreement is made between the parties and the deed is transferred with endorsement in full within the scope of the faith agreement. There is no indication on the deed showing the purpose of mortgage as in the endorsement of pawn. For this reason, it is not possible to understand that the external view was given for security purposes. “Faith agreement means the complete transfer of the right of the believer to an article or the ownership of a right to the believer; is the contract in which the believer commits to manage and maintain the transferred property or right in accordance with the provisions of the faith agreement and to return it to the believer when the faith agreement ends29." According to this agreement, the ownership of the security that is transferred by endorsement in full will transfer to the bearer. “In this type of endorsement, the ensorsement is made for the purpose of conveyance as in the case of concealed endorsement of pawn, but unlike concealed endorsement of pawn, the parties agree on the issuance of the right of ownership in the instrument agreement, not the mortgage on the deed30." In this case, unlike the endorsement of pawn, the bearer not only makes an endorsement for collection, but may also transfer the deed with all three types of endorsement. One difference of the accommodation endorsement in full is that “if the transferee transfers this deed to someone else with endorsement in full – even if he/she is aware of the accommodation endorsement in full – he/she will acquire ownership31." Because of the transfer of ownership to the bearer in the accommodation endorsement in full “all claim rights belong to the believed32." “Yet the transferee who takes over the deed via accommodation endorsement in the event of conveyance of the deed, at the point of transferance is aware of the accommodation relation, and does not prevent acquisition of ownership. In addition, the judicial opinion which says that the transferor of the deed will not be responsible for the instrument against the transferee with the blank endorsement and concealed endorsement of pawn has no ability to apply in the accommodation endorsement. Because in the accommodation endorsement, the transferee of the deed is the owner of the deed and the right of the deed it contains33."
V. CONCLUSION
Securities are defined as deeds that have the characteristics of rights being subject to the deed, not being able to claim without a deed, being non-payment of debt and subject to special formalities. In business life, deed documents are distributed in order to meet the claims of a guarantee. Endorsement of pawn and accommodation endorsement in full for the purpose of a guarantee are the facilities that the instruments used for the purpose of guarantee in the scope of securities. Endorsement of pawn is considered to be a safer way in terms of endorser when considering the assumption that the guarantee function exists. On the other hand, accommodation endorsement in full on the instrument for the purpose of guarantee gives the bearer serious powers including the power of disposition of the deed due to the fact that the bearer is the owner of the deed and of the right that the deed contains.
BIBLIOGRAPHY
ALI BOZER, CELAL GÖLE, Kıymetli Evrak Hukuku, Ankara 2017
CENGIZ KUTLU, Kambiyo Senetlerinin Devri, Kocaeli University Institute of Social Department of Private Law, Master’s Thesis, Kocaeli 2013
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EROL TÜRK, İnanç Sözleşmesi Nedir”İnanç Sözleşmesi Nedir?” Lebib Yalkın Legislation Journal, July 2017, No.163
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HÜSEYIN ÜLGEN, MEHMET HELVACI, ABUZER KENDIGELEN, ARSLAN KAYA, , Kıymetli Evrak Hukuku, Istanbul 2013
IBRAHIM KAPLAN, Soru – Cevaplı Türk Eşya Hukuku TMK Madde 686-1027, Ankara 2018
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REHA POROY, ÜNAL TEKINALP, Kıymetli Evrak Hukuku Esasları 6728 Kanunla Değişik Çek Kanunu’nun Yorum ile, Istanbul 2010
FOOTNOTE
1 Official Gazette (OG), dated 14.02.2011, numbered 27846.
2 Hasan Pulaşlı, Kıymetli Evrak Hukukunun Esasları, 2nd Edition, Ankara 2012, p.29.
3 OG, dated 04.02.2011, numbered 27836.
4 OG, dated 08.12.2001, numbered 24607.
5 OG, dated 20.12.2009, numbered 27438.
6 Ali Bozer, Celal Göle, Kıymetli Evrak Hukuku, Ankara 2017, p.13.
7 Ünal Tekinalp, Reha Poroy, Kıymetli Evrak Hukukunun Esasları 5491 Sayılı Çek Kanununun Yorumu ile, 2010, p.21
8 Bozer/Göle, p.14.
9 Tekinalp/Poroy, p.29.
10 Abuzer Kendigelen, Arslan Kaya, Hüseyin Ülgen, Mehmet Helvacı, Kıymetli Evrak Hukuku, Istanbul 2013, p.29.
11 Fırat Öztan, Kıymetli Evrak Hukuku, Ankara 2012, p.35,36.
12 Pulaşlı, p.42.
13 Kendigelen/Kaya/Ülgen/Helvacı, p.153.
14 The policy is one of the promissory notes (policies, bonds, cheques) and the policy statement is used to represent the promissory notes unless otherwise stated.
15 Öztan, p.105.
16 Bozer/Göle, p.94.
17 Pulaşlı, p.189.
18 Bozer/Göle, p.102.
19 Öztan, p.111.
20 Bozer/Göle, p.109.
21 Ibid, p.110.
22 Emine Develi, ”Kambiyo Senetlerinde Rehin Cirosu”, Sakarya University Law FacultyJournal, Sakarya, December 2016, p.87
23 Ibid, p.106.
24 Cengiz Kutlu, “Kambiyo Senetlerinin Devri”, Kocaeli University Institute of Social Sciences Department of Private Law, Master’s Thesis, Kocaeli 2013, p.98.
25 İbrahim Kaplan, “Soru – Cevaplı Türk Eşya Hukuku TMK Madde 686- 1027”, Ankara 2018, p.116.
26 Tekinalp/Poroy, p.217.
27 Kutlu, p.98.
28 Tekinalp/Poroy, p.218.
29 Erol Türk, ”İnanç Sözleşmesi Nedir?” Lebib Yalkın Legislation Journal, July 2017, No.163, p.1.
30 İsmail Kırca, “Yargıtay Kararları Işığında Çekte Gizli Rehin ve Teminat Amacıyla Temlik Ciroları”, Trade Law and Supreme Court Decisions Symposium XXVIII Memorandum – Discussions, Ankara 2016, p. 95.
31 Develi, p.85.
32 Eraslan Özkaya, İnançlı İşlem ve Muvazaa Davaları, Ankara 2017, p.51.
33 Kırca, p. 95.
