What is turnover?

In TCC, turnover is regulated in terms of policies. With reference to the provisions regarding policies, it has also found application in other bills of exchange and therefore in cheques.

Endorsement is a declaration of will that enables the transfer of the right in the bill of exchange. With endorsement, all rights in the promissory note are transferred. Endorsement functions as identification and collateral. A person who holds a negotiable instrument with a proper chain of endorsement is considered an authorized holder. In other words, the authorized holder can be identified by following the chain of endorsement. This function is called the diagnostic function of turnover. The collateral function of the endorsement means the responsibility function of each endorser towards his successors and the patron.

TYPES OF TURNOVER

Endorsement is divided into three types: transfer, collection and pledge turnover.

1- ASSIGNMENT (TRANSFER) TURNOVER

The endorsement made for the purpose of transferring all rights arising from negotiable instruments is called assignment endorsement. Assignment endorsement can be made as a full endorsement or a white endorsement.

A-Full Endorsement: Full endorsement is a type of endorsement in which the name of the person in whose favor the endorsement is made is stated. In case of full endorsement, the endorsement must be signed by the endorser.

B-White Endorsement: In the white endorsement, the transferee is not mentioned by name. Article 683 of the Turkish Commercial Code states: "The person in whose favor the endorsement is made does not need to be shown in the endorsement, and the endorsement can only consist of the signature of the endorser." Such turnovers are called "white turnovers". "The white endorsement must be written on the back of the policy or on the alloy." As can be understood from the provision, the white turnover must be made on an additional paper called allonge. In a decision dated 2016, the 11th Civil Chamber of the Supreme Court of Appeals stated, "However, it is not mandatory to show the person in whose favor the endorsement is made, and the endorsement may only consist of the signature of the endorser. This type of endorsement is called a white endorsement and is considered as an assignment endorsement. In order for the white endorsement to be valid, the signature of the endorsement must be placed on the back of the check or on the alloy. The person holding a negotiable check has his rights several and interconnected, even if the last endorsement is a white endorsement." If it is understood from the endorsements, he is considered an authorized holder." He made a judgment about the white endorsement using the expressions as stated above.

The holder who takes over the White Endorsement, in accordance with TCC 684;

•Can complete the endorsement in his/her own name or on behalf of another person,

•Can re-endorse the policy as white or to another specific person,

•White can give the policy to another person without completing the endorsement and without endorsing the policy again.

2-COLLECTION TURNOVER

Collection Endorsement is a type of endorsement that gives the endorsee the authority to collect the receivable. The holder to whom the negotiable instrument is endorsed with the collection endorsement pays back the collected amount to the endorser. The collection endorsement must contain a statement such as "the price is for collection" or similar. Otherwise, the turnover is considered as collection turnover. As a matter of fact, in a decision of the 19th Civil Chamber of the Supreme Court of Appeals,"the case should be rejected on the grounds that the endorsement is an assignment endorsement and does not contain a record expressing the collection endorsement." He stated as follows.

In Article 688 of the Turkish Commercial Code, regarding the collection turnover;

"(1) If the endorsement contains a clause stating that "the price is for collection", "by proxy" or that the price will be accepted on behalf of someone else, or a clause that only expresses proxying, the holder can use all the rights arising from the policy; but he can only re-endorse that policy with a collection endorsement.

(2) In this case, those responsible for the policy can bring against the patron the same defenses that they can only assert against the endorser.

(3) The authority contained in the collection endorsement does not end with the death of the person giving this authority, nor does it disappear when the person loses the capacity to exercise civil rights. As can be understood from the relevant articles;

- The holder who takes over the negotiable instrument with a collection endorsement can only make a collection endorsement. It cannot make an assignment or pledge endorsement.

- The holder who takes over the negotiable instrument with the collection endorsement will be able to use all rights arising from the document.

- Defenses that can be put forward against the bearer cannot be used in the collection endorsement. Personal defenses can be asserted against third parties.

3- PLEDGE ENDORSEMENT

The function of the pledge endorsement is to establish the right of pledge on the receivable arising from negotiable instruments. Article 689 of the Turkish Commercial Code defines pledge endorsement;

"(1) If the endorsement contains the phrases "the price is the guarantee", "the price is the pledge" or any other clause indicating the pledge, the holder can exercise all the rights arising from the bill; but an endorsement made by him is only valid as a collection endorsement.

(2) Those responsible for the policy cannot claim defenses against the patron based on the direct relations between themselves and the endorser; Unless, when acquiring the policy, the holder knowingly acted to the detriment of the debtor." .

Checks cannot be pledged.

TYPES OF CHECK ENDORSEMENT

Although there is no prohibition in terms of assignment and collection endorsement in the check, the legislator has prohibited the endorsement of pledge. The basis of the ban is the absence of TTK 689 among the references in TTK 818. As a matter of fact, in a decision of the Supreme Court of Appeals, "However, the attorney of the plaintiff bank stated in the petition and at every stage of the trial that the checks subject to the case were transferred to the beneficiary outside the case … Tic.Ltd.Şti. It should be accepted that the check was in the possession of the plaintiff bank as a result of the collateral endorsement, in view of the fact that the check was given to his client as collateral for the loan used by the bank. Since there is no reference to Article 689 of the same Law regarding pledge endorsement in Article 818 of the TCC No. 6102, which pertains to the policy and can also be applied to the cheque, pledge endorsement is not permissible in the check, and if the check is obtained by endorsement for the purpose of pledge or collateral to obtain its result, the person who transfers the check cannot use the rights based on the check. In this case, while the court should have decided to reject the case, considering that the plaintiff bank was not the authorized holder of the checks in question, it was not correct to make a written decision based on incomplete examination, and the decision had to be reversed." He stated.

Also TTK 788/3. Article "Endorsement may be made in favor of the drawer or any of the debtors of the check. According to the provision "These persons can re-endorse the check", the endorsement will be made in favor of the issuer or one of the debtors. Thus, the check can be put into circulation again.

Another thing to consider regarding endorsement is the endorsement made after the presentation period. An endorsement made after the presentation period is deemed to be an assignment of the receivable.