006 Re: In the Matter of Clarification of Exemption from Payment of All
Court and Sheriff’s Fees (COSCOLLULEA) government units will necessarily reduce the Judicial Development Fund
13 March 2012 | Perez, J. | SC Rule cannot be modified by law
PETITIONER: Perpetual Help Community Cooeperative
FULL CASE TITLE: Re: In the Matter of Clarification of Exemption
from Payment of All Court and Sheriff’s Fees of Cooperatives Duly
Registered in Accordance with Republic Act No. 9520 Otherwise Known
as the Philippine Cooperative Code of 2008.
SUMMARY: Perpetual Help Commuity Cooperative (PHCCI) is a
cooperative and before the MTCC of Dumaguete, it filed a motion to
implement the exemption of cooperatives from paying court and sheriff’s
fees provided under RA 6938, as amended by RA 9520. The MTCC
Executive Judge said that the matter was of national concern and was best
left for the Supreme Court to decide on. Hence this petition. It is true that
the Supreme Court issued Resolution AM 03-4-01-0 which said that
cooperatives were exempt from court fees, but they were not exempted
from sheriff’s fees/expenses. They are also not exempted from paying
actual travel expenses of the sheriff, process server or other court-
authorized person in the service of summons, subpoena, and other court
processes issued relative to the trail of the case. However, the Supreme
Court En Banc issued another Resolution after that which denied GSIS’
petition claiming exemption from payment of legal fees.
The issue is W/N cooperatives are exempt from paying court and sheriff’s
fees. NO.
The 1987 Constitution molded an even stronger and more independent
judiciary; took away the power of Congress to repeal, alter, or supplement
rules concerning pleading, practice and procedure; and held that the power
to promulgate these Rules is no longer shared by the Court with Congress,
more so, with the Executive. The payment of legal fees is a vital
component of the rules promulgated by this Court concerning pleading,
practice and procedure, it cannot be validly annulled, changed or modified
by Congress. As one of the safeguards of this Court’s institutional
independence, the power to promulgate rules of pleading, practice and
procedure is now the Court’s exclusive domain. That power is no longer
shared by this Court with Congress, much less with the Executive. Legal
fees therefore do not only constitute a vital source of the Court's financial
resources but also comprise an essential element of the Court’s fiscal
independence. Any exemption from the payment of legal fees granted by
Congress to government-owned or controlled corporations and local
and the Special Allowance for the Judiciary Fund. Undoubtedly, such
situation is constitutionally infirm for it impairs the Court’s guaranteed
fiscal autonomy and erodes its independence. It is evident that the
exemption of cooperatives from payment of court and sheriff's fees no
longer stands. Cooperatives can no longer invoke RA 6938, as amended
by RA 9520, as basis for exemption from the payment of legal fees.
DOCTRINE: As one of the safeguards of this Court’s institutional
independence, the power to promulgate rules of pleading, practice and
procedure is now the Court’s exclusive domain. That power is no longer
shared by this Court with Congress, much less with the Executive.
FACTS:
1. Perpetual Help Commuity Cooperative (PHCCI) argues that as a
cooperative it enjoys exemptions from court and sheriff’s fees
provided under Sec. 6 of RA 9520 (Philippine Cooperative Code of
2008).1 It also claims that the same was a reiteration of Sec. 62 par. 6
of RA 6938 and was the basis of the Supreme Court’s Resolution in
AM No. 03-4-01-0 and OCA Circular 44-2007.
2. It argues that despite the exemption PHCCI had been continually
assessed and required to pay legal and other fees whenever it files
cases in court.
3. PHCCI then filed with the Office of the Executive Judge of the
MTCC of Dumaguete a Motion to Implement the exemption of
cooperatives. However, the Executive Judge ruled that the matter
was of national concern and should be brought to the attention of the
SC.
a. The MTCC treated PHCCI’s motion as a mere consulta
considering that no action was filed in its court.
b. The Executive Judge had doubts in considering the
exemption if view of the guidelines laid down in the Rules.
c. Many cases filed by PHCCI are small claims and that under
Rule 8 of the Rules on Small Claims, PHCCI is required to
1
Cooperatives shall be exempt from the payment of all court and sheriff's fees
payable to the Philippine Government for and in connection with all actions brought
under this Code, or where such actions is brought by the Authority before the court,
to enforce the payment of obligations contracted in favor of the cooperative.
 pay docket fees and other related costs unless he is allowed
to litigate as an indigent.
4. Hence this petition.
ISSUE/s:
1. Whether cooperatives are exempt from the payment of court and
sheriff’s fees — NO, the power to promulgate rules of pleading,
practice and procedure is now the Court's exclusive domain
RULING: WHEREFORE, in the light of the foregoing premises, the
petition of PHCCI requesting for this Court to issue an order clarifying and
implementing the exemption of cooperatives from the payment of court and
sheriff's fees is hereby DENIED.
The Office of the Court Administrator is DIRECTED to issue a circular
clarifying that cooperatives are not exempt from the payment of the legal
fees provided for under Rule 141 of the Rules of Court.
SO ORDERED.
RATIO:
1. The term “all court fees” under Sec. 6, Art. 61 of RA 9520  refers to
the totality of “legal fees” imposed under Rule 141 of the Rules of
Court.
a. These fees include filing or docket fees, appeal fees, fees for
issuance of provisional remedies, mediation fees, sheriff's
fees, stenographer's fees and commissioner's fees.
2. As to “sheriff’s fees”, the SC had already said in a Minute
Resolution that exemptions granted to cooperatives under RA 6938,
RA 9520, and OCA Circular 44-2007 do not cover the amount
required to “defray the actual travel expenses of the sheriff, process
server or other court-authorized person in the service of summons,
subpoena, and other court processes issued relative to the trail of the
case,” which are neither considered court and sheriff fees nor are
amounts payable to the government.
a. In other words, AM No. 03-4-01-0 exempted cooperatives
from court fees but not sheriff’s fees/expenses.
3. However, the SC En Banc then issued AM No. 08-2-01-0. In this
case (GSIS petition to be exempted from paying legal fees was
denied) the Court stressed that the 1987 Constitution molded an even
stronger and more independent judiciary; took away the power of
Congress to repeal, alter, or supplement rules concerning pleading,
practice and procedure; and held that the power to promulgate these
Rules is no longer shared by the Court with Congress, more so, with
the Executive.
a. The payment of legal fees is a vital component of the rules
promulgated by this Court concerning pleading, practice and
procedure, it cannot be validly annulled, changed or
modified by Congress. As one of the safeguards of this
Court’s institutional independence, the power to promulgate
rules of pleading, practice and procedure is now the Court’s
exclusive domain. That power is no longer shared by this
Court with Congress, much less with the Executive.
b. Congress could not have carved out an exemption (for the
GSIS) from the payment of legal fees without transgressing
another equally important institutional safeguard of the
Court's independence — fiscal autonomy
c. Legal fees therefore do not only constitute a vital source of
the Court's financial resources but also comprise an essential
element of the Court’s fiscal independence. Any exemption
from the payment of legal fees granted by Congress to
government-owned or controlled corporations and local
government units will necessarily reduce the Judicial
Development Fund and the Special Allowance for the
Judiciary Fund.2 Undoubtedly, such situation is
constitutionally infirm for it impairs the Court’s guaranteed
fiscal autonomy and erodes its independence
4. Such ruling has been affirmed in BAMARVEMPCO v. Cabato-
Cortes in denying the petition of a cooperative to be exempted from
legal fees, as well as in another SC En Banc Resolution clarifying
that the NAPOCOR is not exempt from the payment of legal fees.
5. It is evident that the exemption of cooperatives from payment of
court and sheriff's fees no longer stands. Cooperatives can no longer
invoke RA 6938, as amended by RA 9520, as basis for exemption
from the payment of legal fees.
2
The purpose of these funds is to guarantee the independence of the Judiciary as
mandated by the Constitution and public policy.