Liability of the Bank due to the Legal Liability of the Branch Manager
Bank branch managers, when acting on behalf of the bank, are generally considered to be commercial agents of the bank. Therefore, in the event of a legal fault or negligence of a bank manager, this may give rise to the liability of the bank. In other words, banks can generally be held liable for damages arising from the acts of their employees.
Bank branch managers are the commercial representative of the relevant branch, and at the same time, they are employees with a service contract with the bank. In addition, pursuant to Article 3 of the Banking Law No. 5411 (“BPL”), they have the title of bank manager. The reason why the bank branch manager has the qualifications we have mentioned is important in terms of determining which provisions should be applied both in terms of legal liability and procedural law.
Banks are considered to have more obligations than those of a merchant. This is because Article 18/2 of the Turkish Commercial Code No. 6102 (“TCC”) states that every merchant must act as a prudent businessman in all activities of his trade. Therefore, the level of care and diligence that banks are expected to show in their transactions is higher.
Since banks are considered to be reliable and reputable institutions, they have the responsibility to take special care and protection of the deposits they collect against fraud. For this reason, the obligation of banks to act prudently and exercise due diligence is considered to be more severe than that of other merchants.
The basis of legal liability of bank branch managers in terms of their relations with bank customers is divided into three;
- Contractual Liability (TCO Art. 112 et seq.)
- Tort Liability (TCO Art. 49 et seq.)
- 6102 numbered Turkish Commercial Code (“TCC”), Liability of the Members of the Board of Directors of Joint Stock Companies (Art. 553 TCC)
In accordance with the above-mentioned types of liability, it is possible for the bank to be held liable for the damages caused to the customers due to the careless, defective and sloppy behavior of the bank branch manager. For example
- The above-mentioned regulations tell us that if there is a contractual relationship established between the bank customers who are damaged due to the careless and defective acts of the bank branch manager within the framework of the contractual liability of the banks and the bank employing the man, the bank may be held liable for the acts of the assistant person in accordance with Article 116 of the TCO.
- It is possible that the bank may be held liable for the damages caused by the bank managers to the customers pursuant to tort liability. Pursuant to Article 66 of the Turkish Code of Obligations (“TCO”), the bank is also liable as an employer. In this context, in order for the employer’s liability to be applicable, the employee (the bank branch manager) must cause damage to the third party within the framework of extra-contractual liability. In other words, there should be no legal, and in particular, no contractual relationship between the third party who suffered damage and the employer.
- We have already stated that bank branch managers are bank managers pursuant to Article 3 of the Banking Law No. 5411 (“BPL”). Therefore, pursuant to Article 553 of the TCC; “Founders, members of the board of directors, managers and liquidators are liable for the damages they cause to the company, shareholders and creditors of the company if they breach their obligations arising from the law and the articles of association with their fault (…)69.” Therefore, bank branch managers may be held liable for the damages they cause to the bank, its shareholders and the bank’s creditors due to their status as managers.
In summary, the bank is under an objective duty of care as a requirement of aggravated liability due to its failure to take necessary and adequate measures, whereas the bank is liable even for minor defects. Even if the bank’s fault is minor, it may be held liable for the damage incurred.
In the decision of the 11th Civil Chamber of the Court of Cassation dated 13.06.2013 and numbered 2011/9438 Main 2013/12374 Decision
“…When it comes to the concrete case, the plaintiff appointed the non-suiting K3 as an attorney because he was the manager of the bank branch where the plaintiff deposited his money, the purpose of the plaintiff appointing the defendant bank employee as an attorney instead of an outsider is for the purpose of the best and efficient use and protection of his money, and he appointed the bank employee as an attorney as a result of his trust in the bank. Since it has not been proved that the employee of the defendant bank, who was appointed as an agent, used and spent the money withdrawn from the plaintiff’s account for the benefit of the plaintiff, and since it is understood that the said bank employee withdrew money from the accounts of other customers in the same way, and that he was tried and convicted in the criminal court due to his actions, it was not deemed correct to establish a written judgment while it should be decided that the defendant bank should be held liable for the money withdrawn from the plaintiff’s account unfairly as a result of irregular transactions made by the employee of the defendant bank, and the decision had to be reversed for this reason.”
In the decision of the 19th Civil Chamber of the Court of Cassation dated 24.03.2016 and numbered 2015/13034 Main 2016/5306 Decision
“The court decided to accept the lawsuit on the grounds that the money in the plaintiff’s account in the defendant bank was embezzled by the bank manager by forging the plaintiff’s signature, the defendant has a strict liability, moreover, the defendant is defective because it did not establish and operate the necessary audit and internal control system to prevent the account holders from incurring losses and failed to effectively supervise its employees, the defendant is responsible for the plaintiff’s loss, the amount of the receivable was determined by the expert report, and the judgment was appealed by the defendant’s attorney. According to the writings in the file, the evidence on which the decision is based and the reasons for the decision, and there is no inaccuracy in the appreciation of the evidence, all the appeals of the defendant’s attorney, which are not deemed appropriate, are rejected and the judgment, which is in accordance with the procedure and law, is APPROVED…”
In the decision of the 11th Civil Chamber of the Court of Cassation dated 19.10.2006 and numbered 2005/11030 Main 2006/10609 Decision
“As for the appeal of the decision regarding the lawsuit filed by K6, it is clear that banks will be liable in accordance with Articles 55 and 100 of the Code of Obligations for the damages they cause to third parties while conducting their transactions with their own personnel. The embezzlement of money by the bank personnel by showing the transaction differently through irregularities is a purely internal affair of the defendant bank and does not relieve the bank from liability and the bank is liable for the damages arising from the actions of its own personnel. In the concrete case, the dispute centers on whether the plaintiff K6 withdrew 1.219.000.000-TL from the amount in his account. It is understood from the report given as a result of the internal investigation conducted by the bank in relation to the defendant bank branch manager who carried out the transactions subject to the lawsuit, the statement given by the named bank employee to the bank inspector and his own handwritten list, that a certain amount of money was received by the defendant bank manager from the plaintiff K6 within the scope of the banking transaction by inspiring confidence in them, and that a passbook was given in return for this delivery. A receipt has been submitted by the defendant bank for the payment of 1.219.000.000-TL. on 17.05.2002 from the account of the plaintiff K6 dated 25.04.2002, and the court has not made an investigation on this matter. In this case, the court should investigate whether the payment was made to the plaintiff K6 in terms of the said amount in line with the bank records and the inspector reports.
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