Republic of Turkey
Supreme Court
General Assembly of Law
Case No: 2013/1114
Decision No: 2013/1041
Date of Decision: 10.7.2013
Following the trial in the case of “annulment of objection and negative determination” between the parties; the decision of the Istanbul 1st Consumer Court dated 11.09.2007, numbered 2004/3466 E., 2007/448 K., regarding the rejection of the case against defendant G. E., the partial acceptance of the case against the other defendants M. M. Ö. and R. M., and the partial acceptance of the consolidated case, is hereby reviewed by the plaintiff’s attorney and defendant M. M. Ö. Upon request by R. M.’s representative, the 13th Civil Chamber of the Court of Cassation, with its ruling dated 24.02.2009 and numbered 2009/376-2234, decided as follows:
(…The plaintiff claimed that he gave a housing loan to the defendant G. E. in 2000, that the other defendants signed the contract as guarantors, that the debt was not paid despite the notice of default, and that the initiated enforcement proceedings were also objected to, and requested that the objection be dismissed and that 40% compensation be collected.
The defendants argued that a limited mortgage was placed on the immovable property in return for the loan given, that the plaintiff bank initiated enforcement proceedings by converting the mortgage into cash, and that two enforcement proceedings could not be carried out together for the same debt, and requested the dismissal of the case. The guarantors M. M. Ö. and R. M., in their consolidated case, claimed that the section regarding interest rates in the contract was left blank, that the contract was undated, that although the contract was made in foreign currency, the payments were made in TL, that a mortgage was given for twice the amount of the loan received, and that the contract was invalid, and requested that it be determined that they were not indebted due to the initiated enforcement proceedings.
The court ruled that even if the debt is secured by a mortgage, there should be no double collection against the guarantors.) The court ruled that the plaintiff could pursue the claim with the registration, that the fact that interest rates were not shown in the contract did not invalidate the contract, that the contractual interest rate was shown in the repayment plan, and that the plaintiff could not claim default interest; based on the expert report, and since there was no valid objection regarding the principal debtor Gülsüm, and the plaintiff had no legal interest in filing a lawsuit against this defendant, the lawsuit was dismissed; the objection was dismissed for the other defendant guarantors, provided that there was no double recovery in collection, for 78,678.02 Euros; interest of 11.4% per annum and 5% VAT on the principal amount of 69,360 Euros was applied from the date of the lawsuit; 49,057.96 YTL in denial compensation was ordered; and in the consolidated case, it was determined that the plaintiffs were not indebted for 15,555.86 YTL; the judgment was appealed by the plaintiff and defendants M. M. Ö. and R. M. (plaintiffs in the consolidated case). 1-Based on the documents in the file, the evidence on which the decision is based, the legally valid reasons, and especially the absence of any inaccuracy in the assessment of the evidence, the plaintiff’s entire appeal and the other appeals of the defendant-plaintiffs in the consolidated case should be rejected. 2-Although the court’s decision was based on the reasoning that even if the debt is secured by a mortgage, the creditor can still pursue the guarantors separately, provided there is no double collection, Article 45 of the Enforcement and Bankruptcy Law states: “Even if the debtor of a debt secured by a pledge is a person subject to bankruptcy, the creditor can only pursue the debt through the sale of the pledge. However, if the amount of the pledge is insufficient to pay the debt, the creditor can pursue the remaining debt through bankruptcy or seizure.” It is not disputed that the plaintiff initiated two separate proceedings, one through the sale of the mortgage and the other through seizure, due to the loan he provided. Therefore, the court’s decision, rendered without examining and considering the aforementioned article of the law and without acting in accordance with it, constitutes a procedural violation. and is contrary to the law…)
For the reasons stated in the first paragraph, the plaintiff’s entire appeal and the other appeals of the defendant-plaintiffs in the consolidated case are rejected; for the reason stated in the second paragraph, the appealed decision is reversed in favor of the defendant-plaintiffs in the consolidated case and the file is returned to the lower court; and after the retrial, the court upheld its previous decision.
APPEALANT: Defendant-plaintiffs in the consolidated case M.. M.. Ö.. and
R.. M.. represented by attorney
DECISION OF THE GENERAL ASSEMBLY OF LAW
After the General Assembly of Law examined the case and determined that the appeal against the resistance decision was filed within the time limit, and after reviewing the documents in the file, the following was considered:
The main case concerns the annulment of the objection; the consolidated case concerns requests for negative determination.
The plaintiff claims that in 2000, he provided a housing loan to defendant G. E., that the other defendants signed the contract as guarantors, that the debt was not paid despite a warning notice, and that the defendants objected to the initiated collection proceedings. Therefore, the plaintiff requests that the objection be dismissed and that 40% compensation be awarded.The defendants argued that a limited mortgage was placed on the property in exchange for the loan, that the plaintiff bank initiated foreclosure proceedings, and that two proceedings for the same debt could not be conducted simultaneously, requesting the dismissal of the case. The guarantors, M. M. Ö. and R. M., in their consolidated case, claimed that the section regarding interest rates in the contract was left blank, that the contract was undated, that although the contract was in foreign currency, payments were made in Turkish Lira, that a mortgage was given for twice the amount of the loan, and that the contract was invalid, requesting a ruling that they were not indebted due to the proceedings. The court ruled that even if the debt was secured by a mortgage, ordinary collection proceedings could be initiated against the guarantors, provided there was no double recovery; that the absence of interest rates in the contract did not invalidate the contract; that the contractual interest rate was indicated in the repayment plan; and that the plaintiff could not claim default interest. Based on this reasoning and the expert report, the court dismissed the case against the principal debtor, Gülsüm, on the grounds that she had no valid objection and no legal standing to file the lawsuit. Regarding the other defendant guarantors, the court ruled that the objection to the amount of 78,678.02 Euros be dismissed, provided there was no double recovery, and that interest of 11.4% per annum and 5% VAT be applied to the principal amount of 69,360 Euros from the date of collection, and that 49,057.96 YTL in compensation for denial of debt be collected. The court also determined that the plaintiffs were not indebted for 15,555.86 YTL in the consolidated case. This decision was overturned by the Special Chamber with the ruling whose text is reproduced verbatim in the heading section above. The court issued a decision of resistance based on the previous grounds. The judgment was appealed by the attorney for the defendants-plaintiffs in the consolidated case, Meryem Meltem Özdemir and Rezzan Mavitan. The dispute, which came before the General Assembly of Law through the resistance procedure, centers on whether Article 45 of the Enforcement and Bankruptcy Law is applicable to the defendants-plaintiffs in the consolidated case, M. M. Ö. and R. M., who signed the housing loan agreement used by the other defendant, G. E., as joint and several guarantors. In order to better understand the legal relationship between the parties within the scope of the factual circumstances explained in the Special Chamber’s reversal decision above, it is deemed useful to provide explanations on the subject. The main lawsuit concerns a “Housing Loan Agreement” dated 08000 DM, signed between the plaintiff bank and defendant G. E., under which G. E. utilized a loan of 160,000 DM. G. E. signed this loan agreement as the principal debtor, and as security for this loan, a mortgage was established in favor of the plaintiff bank on independent section number 2 of the building located at Beşiktaş District, Dikilitaş Neighborhood, block 1288, parcel 8, owned by the defendant, via a “Mortgage Deed” dated 03.07.2000. The other defendants, G. Erlat and M. M. Ö., signed the loan agreement as joint debtors and guarantors. The immovable property registered in the name of the plaintiff was transferred to the defendant guarantor M. M. Ö. on March 27, 2011, subject to the mortgage on it; the plaintiff bank initiated an enforcement proceeding without a court order against the defendants on January 10, 2003, based on the loan agreement, with the Istanbul 14th Enforcement Directorate’s file numbered 2003/666 E.; upon the objection of the defendant guarantors M. M. Ö. and R. M. to this enforcement proceeding, the present lawsuit for the annulment of the objection was filed; furthermore, the plaintiff bank initiated enforcement proceedings against the defendants G. E. and Meryem M. Ö. on the same date, based on the loan agreement and mortgage deed, with the Istanbul 14th Enforcement Directorate’s files numbered 2003/179 E. and 2003/1300 E. There is no dispute that the plaintiff bank initiated foreclosure proceedings against the defendants through the sale of the mortgage, that these proceedings were later cancelled upon the complaint of the debtors, that the plaintiff bank subsequently initiated foreclosure proceedings against the same debtors on April 30, 2004, with file number 2004/255 E. of the Istanbul 10th Enforcement Office, and that these proceedings are still pending. Following this, the defendants in the main case, R. M. and M. M. Ö., filed a lawsuit with the Istanbul 1st Consumer Court, file number 2004/236 E., seeking a determination that they are not indebted to the plaintiff bank due to the aforementioned loan agreement and proceedings, and that these two lawsuits have been consolidated. Given the above-mentioned factual circumstances, it would be useful to provide a legal characterization of the matter. Article 487 of the repealed Law No. 818 on Obligations, titled “Joint and Several Guarantee,” states the following: “If the guarantor has undertaken the performance of the debt as a joint and several guarantor or joint and several debtor together with the debtor, or in any other similar capacity, the creditor may initiate proceedings against the guarantor before resorting to the principal debtor and converting the collateral into cash.
The provisions of this chapter also apply to this type of guarantee. ”
Article 45 of the Enforcement and Bankruptcy Law No. 2004, titled “Claims secured by pledge and mortgage,” states: “Even if the debtor of a secured receivable is subject to bankruptcy proceedings, the creditor can only pursue the claim through the liquidation of the collateral. However, if the amount of the collateral is insufficient to cover the debt, the creditor can pursue the remaining amount through bankruptcy or seizure.
In the pursuit of secured receivables arising from housing finance as defined in the first paragraph of Article 38/A of the Capital Market Law No. 2499, and secured receivables of the Housing Development Administration, the pursuit can be carried out through the liquidation of the collateral or through seizure.
The provision of Article 167 regarding bills of exchange, promissory notes, and checks is reserved.
In interest and annual installment receivables secured by mortgage, depending on the choice of the creditor and the status of the debtor, recourse can be made to the liquidation of the collateral, seizure, or bankruptcy proceedings.”
This provision is included. Article 45 of the Turkish Enforcement and Bankruptcy Law (İİK) regulates matters concerning the principal debtors and prevents the creditor from directly pursuing the “pledgor” through general attachment proceedings if the debtor’s claim is secured by a pledge. It also stipulates that even if the debtor of a secured claim is subject to bankruptcy proceedings, the creditor can only pursue the claim through the liquidation of the pledged assets. If, as explained in Article 487 of the Turkish Code of Obligations No. 818, the guarantor has undertaken the performance of the debt as a joint and several guarantor or joint and several debtor, or in any other similar capacity, the creditor may initiate proceedings against the guarantor before resorting to the principal debtor and converting the pledged assets into cash. If a joint debtor/guarantor has provided a mortgage sufficient to cover the debt, including their own guarantee, the creditor can only pursue collection through the sale of the pledged asset in accordance with Article 45 of the Turkish Code of Obligations. Conversely, if the mortgage was given solely in favor of the debtor or for the debt specified in the loan agreement, the creditor can pursue collection for the remaining amount of the debt that does not cover the guarantor’s own guarantee, without the obligation to resort to Article 45 of the Turkish Code of Obligations, by pursuant to Article 487 of the Turkish Code of Obligations, provided that there is no double recovery in collection. Indeed, the same principle is reflected in the decisions of the General Assembly of the Supreme Court of Appeals dated October 14, 1972, No. 1972/215 E.- 841 K.; and April 18, 2001, No. 2001/12-354 E.- 367 K.; This principle was also adopted in the decisions dated 18.11.2009 and numbered 2009/19-426 E.- 543 K. In light of the explanations given above, when the concrete case is evaluated; it is not disputed that the defendant G.E. gave a real estate mortgage with the official mortgage deed dated 03.07.2000 and numbered 2904, solely for the liability of the principal debtor, and that the mortgaged real estate was later transferred to M. M. Ö., the defendant in the main case, as a joint guarantor, subject to the mortgage; and that the plaintiff bank initiated enforcement proceedings against the principal debtor and the joint guarantors, based on both the loan agreement and the mortgage deed. As explained in detail above, there is no irregularity in the plaintiff bank’s choice of both enforcement methods against the defendant guarantors. In this case, it cannot be said that Article 45 of the Enforcement and Bankruptcy Law should also be applied to the guarantors. Therefore, the court’s resistance on this point is justified.
However, since the Special Chamber has not conducted an examination on the merits of the case, the file should be sent to the Special Chamber for examination on this point.
CONCLUSION: For the reasons explained above, since the resistance is deemed appropriate, the file is to be sent to the 13th CIVIL CHAMBER for examination of the appeal objections of the defendant-counterclaimants M. M. Ö. and R. M. regarding the merits of the case, and the decision was made unanimously on July 10, 2013, with the possibility of requesting a correction of the decision within 15 days, in accordance with Article 440 of the Code of Civil Procedure No. 1086, which is applied by reference to “Temporary Article 3” added to the Code of Civil Procedure No. 6100 by Article 30 of Law No. 6217.