An unfunded check is a frequently encountered problem in commercial life, and in this situation, it is important to know what the responsibilities and rights of the persons endorsing the check (endorsers) are. Basically, the endorser is liable to the check holder if the check is not paid. Below, we will address the responsibilities and rights of the endorser in the case of an unfunded check.

Endorser’s Fundamental Debts and Obligations

Liability for Payment: The endorser’s most fundamental obligation is to be liable to the holder for the non-payment of the check, unless otherwise stipulated. As stated in the decision of the 19th Civil Chamber of the Court of Cassation numbered 2012/8233 E., 2012/15286 K., the principle that “…the endorsers are liable to the check holder in the holder-defendant’s recourse to previous endorsers” is valid.

Principle of Independence of Signatures: The endorser’s liability is not affected by the invalidity of other signatures on the check. As emphasized in the decision of the 19th Civil Chamber of the Court of Cassation numbered 2015/2841 E., 2015/16765 K., “If a bill of exchange bears the signature of persons not competent to contract by a bill of exchange, forged signatures, signatures of fictitious persons, or signatures that do not bind the persons who signed or on whose behalf they were signed for any reason, the validity of other signatures shall not be affected thereby.” This principle states that the endorser shall be liable for their own endorsement.

Place in the Chain: The endorser is generally liable to subsequent holders. However, in check law, the persons who can be recourse to due to non-payment of the check are the previous holders (endorsers) to the person holding the check, the payee, the drawer, and the guarantors (avalists).

Endorsee’s Rights and Cases of Release from Liability

Right of Recourse: An endorser who pays the check amount has the right to recourse against previous endorsers, the payee, and the drawer. In the decision numbered 2009/17525 E., 2009/26017 K. of the 12th Civil Chamber of the Court of Cassation, it was stated that the payee may seek recourse against the drawer for the full amount they had to pay.

Holder’s Bad Faith or Gross Negligence: An endorser can be released from liability by proving that the holder acted in bad faith or was grossly negligent when acquiring the check. For example, if it is proven that the holder knew the check had become valueless and acted to the detriment of the endorser, the endorser can be released from liability.

Forgery of Signature: If the endorser proves that the endorsement signature on the check does not belong to them, they are released from liability. This is an absolute defense and can be raised even against a holder in good faith.

Claim of Lack of Consideration and Defenses Arising from the Underlying Relationship: An endorser can raise the invalidity of the underlying relationship forming the basis of the check or that the check became valueless, but only against a holder who knew this fact and deliberately acted to the detriment of the debtor.

Failure to Present in Time and Statute of Limitations: If the check is not presented to the bank in time or becomes subject to the statute of limitations, the endorser’s liability arising from negotiable instruments law ceases. In the decision numbered 2015/33523 of the 12th Civil Chamber of the Court of Cassation, “It must be established by a dated statement written on the check, indicating that the check was presented to the drawee bank in time, and also showing the date of presentation. Otherwise, the creditor loses their right of recourse.” A check that has become subject to the statute of limitations can be considered as a beginning of written evidence.

Endorsement Made After the Presentment Period: An endorsement made after the check’s presentment period has passed is considered an assignment of the receivable, and the endorser’s rights and obligations are evaluated within this framework (Court of Cassation 19th Civil Chamber-2011/7160-2011/8841).

Re-issuance of the Check: In checks drawn by the drawer in favor of the payee, endorsed back to the drawer by the payee, and then re-issued by the drawer, the liability of the original payee-endorser ceases.(Court of Cassation 12th Civil Chamber-2019/6789-2020/4150; Bakırköy 2nd Civil Court of Commerce-2020/960-2021/640).

Right to Complain (From a Criminal Law Perspective): In the offense of issuing a dishonored check, the right to complain belongs to the holder who presents the check to the bank for collection, and to the person who possesses the check after the “dishonored” transaction has been made and who was also a valid and legitimate endorser in the period before the “dishonored” transaction (Court of Cassation 19th Criminal Chamber-2018/3072-2018/5874; Court of Cassation 19th Criminal Chamber-2019/18941-2020/6993). However, if the endorser’s endorsement has been canceled, there is no right to complain. (Court of Cassation 7th Criminal Chamber-2021/20718-2022/8339). The right to complain must be exercised within three months from the date the act was learned (Istanbul Regional Court of Justice 15th Criminal Chamber-2018/4731-2019/18).

In conclusion, the endorser’s debts and obligations, as well as their rights, in the case of a dishonored check, vary depending on the specifics of the concrete case, the check’s circulation history, the chain of endorsements, the good faith status of the parties, and whether procedural actions have been fulfilled. As a general rule, the endorser is liable to the holder for the non-payment of the check amount, and this liability is limited to their own endorsement, based on the principle of “independence of signatures.” However, the endorser also has important rights, such as the right to recourse against previous liable parties if they pay the check amount; and the right to be released from liability by proving situations such as the holder’s bad faith, the forgery of the signature, the check becoming without consideration, or expiration (statute of limitations). Furthermore, under certain conditions, there is also the right to file a complaint for the offense of issuing a dishonored check. Also a journal article suggestion.

Why is Expert Opinion / a Lawyer Necessary?

When faced with a bounced check, especially for those acting as endorsers, their legal responsibilities and rights are subject to highly technical and detailed regulations. Issues such as the chain of endorsements, the presentation period of the check, statute of limitations, defenses arising from the underlying relationship, right of recourse, and defense of forged signature, require special legal knowledge specific to negotiable instruments. Commercial enterprises and individuals operating in regions like Tuzla chiefly, among Istanbul’s rapidly developing districts including Pendik, Kartal, Maltepe, Gebze, Darıca, and Çayırova, frequently encounter bounced check problems. Particularly for organized industrial zones and high-volume trading companies in Tuzla, incorrect legal guidance regarding endorser liability can pose serious risks to commercial reputation and financial stability.