Baguio Market Vendors Multi-Purpose Cooperative v. Cabato-Cortes
REITERATIONFacts
1. The Antecedents: The Baguio Market Vendors Multi-Purpose Cooperative (BAMARVEMPCO), a credit cooperative organized under Republic Act No. 6938, sought to extrajudicially foreclose a mortgage in 2004. As a credit cooperative, BAMARVEMPCO claimed exemption from payment of foreclosure fees based on Article 62(6) of RA 6938, which provides exemption from court and sheriff's fees for actions brought under the Cooperative Code or by the Cooperative Development Authority to enforce obligations. 2. Procedural History: The petition for extrajudicial foreclosure was filed with the Clerk of Court of the Regional Trial Court of Baguio City. The Executive Judge, Hon. Iluminada Cabato-Cortes, denied BAMARVEMPCO's request for exemption from foreclosure fees. The Executive Judge reasoned that the fees collected under Rule 141 of the Rules of Court are not fees payable to the Philippine Government, as they accrue to a special fund under the Court's control, not the National Treasury. A motion for reconsideration was also denied, leading to the present petition. 3. The Petition: BAMARVEMPCO filed a petition for review under Rule 45 of the Rules of Civil Procedure, arguing that the case merely required a straightforward application of Article 62(6) of RA 6938. The Office of the Solicitor General joined the petitioner, asserting that the substantive rule of RA 6938 should prevail over the procedural rule of Section 22 of Rule 141, and that judiciary fees are indeed payable to the Philippine Government. Conversely, the Court's Office of the Chief Attorney recommended denial, contending that the Court's rule-making power under the 1987 Constitution is exclusive and cannot be superseded by legislative enactments like RA 6938, citing previous rulings on the matter.
Issue(s)
Whether petitioner's application for extrajudicial foreclosure is exempt from legal fees under Article 62(6) of RA 6938. Whether legislative enactments can exempt entities from payment of court fees when such fees are part of the Supreme Court's rule-making power.
Ruling
The petition is DENIED. The Orders dated 30 August 2004 and 6 October 2004 of the Executive Judge of the Regional Trial Court of Baguio City are AFFIRMED.
Ratio Decidendi
On the issue of exemption under Article 62(6) of RA 6938: The Court held that Article 62(6) of RA 6938 does not apply to the petitioner's foreclosure proceeding. The exemption granted by this provision is strictly limited to two types of actions: (1) actions brought under RA 6938 itself, and (2) actions brought by the Cooperative Development Authority to enforce payment of obligations contracted in favor of cooperatives. The present case involves a petition for extrajudicial foreclosure of mortgage under Act 3135, which does not fall under either category. Furthermore, the petitioner is not the Cooperative Development Authority, which is the only entity that can claim exemption under the second category, and only in specific circumstances. Therefore, the invocation of Article 62(6) of RA 6938 for exemption from foreclosure fees was misplaced. On the power of the Legislature versus the Supreme Court to enact judicial rules: The Court reiterated its ruling in Re: Petition for Recognition of the Exemption of the Government Service Insurance System from Payment of Legal Fees. Under the 1987 Constitution, the Supreme Court's power to promulgate rules concerning pleading, practice, and procedure is exclusive and is no longer shared with Congress. This power is a safeguard of the Court's institutional independence. The payment of legal fees is a vital component of these rules, and therefore, it cannot be validly annulled, changed, or modified by Congress. The deletion of Congress's power to "repeal, alter or supplement" judicial rules from the 1987 Constitution, as contrasted with previous constitutions, signifies this exclusive domain. Consequently, any legislative attempt to exempt entities from such fees, if it conflicts with the Court's rules, must yield to the Court's authority.
Main Doctrine
Petitions for extrajudicial foreclosure of mortgage under Act 3135 are not exempt from payment of legal fees under Article 62(6) of RA 6938, as the exemption is limited to actions brought under RA 6938 or actions brought by the Cooperative Development Authority to enforce obligations in favor of cooperatives. Furthermore, the Supreme Court's exclusive power to promulgate rules concerning pleading, practice, and procedure, including the imposition of court fees, cannot be encroached upon by legislative enactments.