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Legal ReviewTHE COMPONENTS OF A CHECK (cheque)

Şubat 24, 2015by admin

In Turkish law amongst bill of exchanges, check is the one which is most widely used. Because of this importance in this month’s bulletin we think that it will be beneficial to look into the mandatory, voluntary and alternative components needed to be found in a check in the light of the Courts of Appeal decisions.

Check is regulated in the Turkish Commercial Code (Türk Ticaret Kanunu- hereafter will be referred to as TTK) between the 692nd and 735th articles. In a check there is a three way relationship which consists of a drawer, acceptor and a beneficiary. In Turkish law the acceptor must always be a bank. Check in its legal nature is a tool for payment. For this reason at a check a due date and interest cannot be a subject. Check has the character of a transfer. In practice as Öztan has indicated, a check must be done in a written form by following certain conditions. A check, allows a drawer to draw a check from the bank they have an account in and make a payment to the beneficiary. The right of the beneficiary of the check to ask that the amount shown in the check be paid to them is based on the “check agreement” made between the drawer and the acceptor bank. If the check is going to be paid at the place which it was made then in 10 days if it is going to be paid in some other place which it was not made then in 1 month and if it is going to be paid between continents then in 3 months it has to be given to the acceptor.

THE CHECKS MAIN COMPONENTS
1- The word “check” or if the document is written in a language other than Turkish then the word for check used in that language must be present on the check. The word check must be written without making any shortening on the word. A document which does not have the word check on it legally has the character of a transfer.
2- A check must include a transfer which is for an unconditioned, unreserved payment of a certain amount. If the sums which are going to be paid are tied to any conditions then that document is accepted as invalid. It is sufficient when the amount is written in numbers or in writing. However when there is a difference between the number and the writing the written amount will be the one which is taken into account. In the case where alterations (forgery) are made on the check none of the written amounts will be accepted. However if the debtor (drawer) wrote the check and it was again altered by them the highest amount written by the drawer will be accepted. Interest may not be put on checks, because checks are not tools for credit they are tools for payment. It is possible to shown the amount in the check as foreign money. In this case if there is no note on the check which states that it will be paid in the exact way (paid in kind) then it will have to paid in the countries money according to the rates on the day the check is given in. As a rule for a check to be arranged in foreign money the check account must be opened in foreign money as well. Although this is the rule in some Courts of Appeals decisions it has been accepted that foreign money checks may be arranged from accounts opened for Turkish currency.
3- It is also obligatory that the name and surname of the person who is going to pay (the acceptor) is found on the check. In checks made in Turkey the acceptor may only be a bank. A bank; are the establishments which are subjected to the regulations of the Banking Law. The legal relationship between the drawer and the acceptor has no importance for the aspect of the validity of the check. A check made separately from a bank on a real person or legal entity only has the character of a transfer.
4- The date the check was drawn must be shown on the check. For the calculation of the submission periods and for determining if the drawer has the ability to do procedures, the drawing date has importance. When there is more than one date on the check which is different from each other the document loses its character as a check.

The 12th Civil Chamber of the Courts of Appeal, in its decision 3.12.1968 dated, 11310 E., 11328 K. numbered, it has been accepted that if only the year is written on a check then this is sufficient. However if the drawing date of the check is wrong this does not affect the validity of the check. The date of drawing is usually written at the top part of the check. It is also acceptable if this date is written on the front half of the check and it is next to the drawer’s signature. The 12th Civil Chamber of the Courts of Appeal, in its 11.11.94 dated E. 12820, K. 14100 numbered decision has decided in this way; “on the check which an enforcement proceeding has been based on the drawing date has been shown as 20.9.1993 and this date has been crossed out and the date of 31.3.1994 has been written on it. The debtor themselves have accepted that they are the ones who have made this change. Since the drawing date was rearranged by the drawer the debtor’s claim that the change on the date was made because of the number (9) which was crossed over cannot be investigated by the court and since from the date of 31.3.1994 there time limit has not passed the acceptance of the debtors claim is wrong.”
5. The drawer’s signature must be found on the check. This is also one of the obligatory conditions. In the Courts of Appeal decisions it is seen that even without the name and surname of the drawer if their signature is present then this is sufficient. The 12th Civil Chambers of the Court of Appeal decision 23.11.2006 dated E. 18236, K. 21972 numbered has brought light on the subject by saying “in a check the drawer’s signature is sufficient and writing of the name and surname or the corporate name is not obligatory. Therefore when the debtors claim should have been refused which stated that; the check was made without the corporate name being written on the part of the drawer and therefore the enforcement proceeding based on bill of exchanges may not be done. The fact that it was decided that the enforcement proceeding was cancelled is wrong.” The same Civil Chamber in the decision they gave on the date of 9.12.2003 again on the same subject has decided in this way; “Because the name of the drawer is not needed to be written and that the drawer’s signature is sufficient the fact that the debtors claim that their name was written differently on the check and therefore the claimants claim for removing objection should be refused was accepted is wrong.” ( E.20969, K.24119 ). On a check a fingerprint or stamp or any other similar tool may not take the place of a signature and they are not valid. In this situation the document cannot be accepted as a check.

THE LEGAL CONCLUSIONS OF WHEN THE MAIN CONDITIONS NEEDED TO BE FOUND ON A CHECK ARE NOT PRESENT

By law when the main conditions looked for in a check are not present this will conclude that the document is not a check. In this case if the check is made as payable to order; it will be accepted as a transfer and will subjected to transfer regulations. If it is made as check to bearer then it is not even accepted as a transfer. However it may be accepted as a commencement of written proof. Along with this as long as the document does not have the character of a check endorsing it is not possible. In the Enforcement and Bankruptcy Law (İcra ve İflas Kanunu-hereafter will be referred to as İİK) a special enforcement proceeding has been regulated for the negotiable instruments. However if the document does not have the character of a check benefitting from this legal way will not be possible. In the 12th Civil Chamber of the Courts of Appeal decision dated 12.11.1985 numbered E.3060, K.9449, because in the document which is used as a base for the proceeding does not have a part belonging to the drawer according to the article 692 of TTK and its following articles it is not a check. Proceeding by special way is not possible if the negotiable instrument is a check to bearer. When this matter needed to be personally looked at by the court and according to the İİK 170/a article a decision of cancelling the proceeding needed to be given the fact that the case was reviewed is wrong.”

A CHECK’S ALTERNATIVE CONDITIONS
1. The place of drawing: In the case that the place of drawing has not been written openly, if there is a place written next to the drawers name and surname then this place will be accepted as the place of drawing. However, if the place of drawing is not written on the document or if there is no written place next to the name and surname of the drawer that the document cannot be accepted as a check. If the conditions are present the regulations of transfer may be applied to it. The Courts of Appeal 12th Civil Chamber’s decision in 9.3.1990 with case number E 9354, K. 2348 had come to the conclusion that “since (Bakanlıklar- Ankara) was written next to the name of the drawer the place of drawing exists” The place of drawing may be shown in print as well as being shown in handwriting, typewriter, or by stamp. The General Assembly of the Courts of Appeal, in their 9.5.1984 dated, E. 12-579, K. 524 numbered decision stated that ; “In the checks contents if there is no place of drawing then the place written next to the drawers name and surname is accepted as the place of drawing. If a place has not been shown in this way either then the document does not have the character of a check. In the case the place of drawing has not been written. In the document a place next to the name and surname has not been written either so in this case because of the reason that this condition has not been met it is not possible to accept this document as a check.”

On the same subject at the Criminal General Assembly of Courts of Appeal in the 30.1.1989 dated decision came to the conclusion that “because of the inconsistency of the place of drawing on the document the document may not be accepted as a check and therefore the 3167 numbered law may not be applied on the accused” (E.88/6-527, K.89/4).

According to the 14.12.92 dated, E.1, K.5 numbered the Decision of Joint Chambers “on checks if the place of drawing is written and is easily understandable without any doubt then the fact that the place was written in short does not make the check invalid.”
2. Place of Payment: In a check showing the place of payment is not an obligatory but an alternative condition. The place of payment is not shown; the place shown next to the acceptor is accepted as the place of payment. If more than one place is shown next to the acceptor then the first place shown on the check is the place the payment is going to be made at. If there is no explanation on the check on this matter then the check must be paid at the place where the acceptors business centre is. When showing the place of payment only showing the place is sufficient the address does not need to be shown. (like Ankara, Çankaya) the place of payment may also written in short (“Istanbul” may be shown as “Ist”.

A CHECK’S OPTIONAL CONDITIONS

The points mentioned in the law:
1. Beneficiary: Because a check may be written as payable to the bearer the beneficiary does not need to be shown on it. The 12th Civil Chamber of the Courts of Appeal decision dated 14.05.1996 and numbered E. 5892, K. 6359 this conclusion has been made “the name of the beneficiary does not need to be found on a check. A check may be written for the name of the holder or it may also be written as payable to the bearer as well. It is accepted that if the name of the beneficiary is not written on the check then it is made to the bearer.”

The same Civil Chamber has also made a decision dated 27.12.2005 with E. 22481, K. 26152 which states “ whether or not the beneficiary is written on the check or the beneficiary is a real person or a legal entity are not conditions which need to be fulfilled. If the beneficiary is not shown explicitly on a check, then the check is accepted as a bearer check.”
2. Order Record: A check, by law is accepted as an order instrument document therefore even if the record of “emre”(“to order”) is not found on it is still accepted as an order instrument.
3. Residency record
4. Record to pay in exact
5. Record that the check will be paid to the bank
6. Record of paying to account
7. Record of exemption from a protest
8. Record of bill guarantee

Points which have not been mentioned in the law;
1. Record of provision: This record is about which account the check is going to be paid from.
2. Record of indemnity
3. Record of warning
4. Record of jurisdiction
5. Record of arbitration
6. Record of confirmation and visa (confirmation of a check amount may be seen in the bank account on the date the cheque is drawn)

THE CONDITIONS NEEDED ACCORDING TO THE 3167 NUMBERED CHECK LAW ( The Law on Regulating the Payments Relating Checks and the Protection of the Bearer’s of a Check)

CONDITIONS:
1. Taxpayer Identification Number: The fact that the drawer taxpayer identification number is not present on the check does not make the check invalid. The 12th Civil Chamber of the Courts of Appeal in its 1.11.2004 dated, numbered E. 18501, K 22720 decision have come to this conclusion; “In the TTK the mandatory conditions of the things needed to be found on a check have been clearly shown. A taxpayer’s identification number is not shown to be one of the mandatory conditions.”
2. The name of the bank’s branch and account number: The fact that the existence of the branch name or the account number which the check works on is not present on the check does not make it invalid. If these components are not present then this only results the liability of the bank.
3. The existence of a check book published by the bank: The principle on publishing check books is that the opinion of the Turkish Banking Association is taken and then it is detected by the Central Bank of the Republic of Turkey and then published in the Official Gazette as an announcement.

PUTTING ILLICIT RECORDS ON THE CHECK

This situation may bring two conclusions. Some of these records make the document lose its character as a check whereas some on them although do not make the document lose its character check are accepted as if they have never been written at all. In the case that record or condition is made about what would happen if the amount of the check is not paid or when the fact that the check shows that the drawers rights relating the main debt relationship is hidden then the document loses its character as a check. Also if more then one dates have been shown for the time the check was made this also makes the document lose its character as a check. An acceptance comment or interests written on the check are accepted as if they have not been written at all. Also if the drawer puts records on the check that in the case that the check is not paid they will not be responsible then these records will also be accepted as if never written.

Source: Erol ERTEKIN- Izzet KARATAS Uygulamada Ticari Senetler Hukuku 1992
Gonen ERIS Aciklamali Ictihatli Uygulamali Cek Hukuku 5. Baski