Cooperatives are not exempt from the deposit/payment of sheriff’s expenses under Section 10, Rule 141 of the Rules of Court in collection actions filed with the small claims courts.
This was the ruling of the Supreme Court on the query of the officers of REMPCO Multi-Purpose Cooperative, an employee-based cooperative which filed cases for collection of sums of money before the designated small claims court in Makati City against its delinquent members.
The Court, in an extended Minute Resolution dated September 1, 2009, said the exemptions granted to cooperatives under Article 62, paragraph 6 of RA 6938; Section 6, Article 61 of RA 9520; and OCA Circular No. 44-2007 clearly do not cover “the amount required to defray the sheriff’s expenses,” which are neither considered as court and sheriff’s fees nor are amounts payable to the Philippine Government.
“(T)he sheriff’s expenses are not payable to the Philippine Government – the condition imposed to warrant exemption from the payment of legal fees for cooperatives under the law and OCA Circular No. 44-2007,” the Court stressed.
The case stemmed when the Makati small claims court had assessed REMPCO PhP1,000.00 as service fee. REMPCO said that, initially, it was not required to pay any court and sheriff fees as provided for by RA 6938, as amended by RA 9520, otherwise known as the Philippine Cooperative Code of 2008.
REMPCO said Section 6, Article 61 of RA 9520 provides that cooperatives “shall be exempt from the payment of all court and sheriff fees payable to the Philippine Government for and in connection with all action brought under this Code, or where such action is brought by the Authority (Cooperative Development Authority) before the Court, to enforce the payment of obligations contracted in favor the Cooperative.”
Court Administrator Jose P. Perez, in his reply dated June 3, 2009, opined that the exemption granted to cooperative refers to the payment of docket and other legal fees, while the PhP1,000.00 assessment is to “defray the actual travel expenses of the sheriff, process server or other court-authorized person.”
REMPCO, however, claimed the said opinion runs against Court En Banc Resolution dated July 15, 2003, in AM No. 03-4-01 as enunciated in OCA Circular No. 44-2007, dated April 10, 2007, enjoining all executive, presiding judges, and clerks of court, accountable officers of the first- and second-level courts to grant all cooperatives the exemption, of all court and sheriff fess payable to the Philippine Government.
The Supreme Court said that the term “all court fees” under Section 6, Article 61 of RA 9520 refers to the totality of “legal fees” imposed under Rule 141 of the Rules of Court as an incident of instituting an action in court. 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.
Agreeing with the OCA, the Court said the PhP1,000.00 service fee being assessed against the petitioners “is not in the nature of court and sheriff’s fees within the contemplation of the exemption granted to cooperatives under the law and OCA Circular No. 44-2007.”
Section 10, Rule 141 of the 1997 Revised Rules of Procedure distinguishes between the terms sheriff’s fees and sheriff’s expenses.
Sheriff’s expenses refers to expenses incurred by a party “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 trial of the case.”
On the other hand, sheriff’s fees are those imposed by the court “for the services rendered to a party incident to the proceedings before it.”
A PhP1,000-initial deposit to the Court, on the other hand, is required to defray the “sheriff’s expenses” and additional amounts are assessed under Section 10, Rule 141 should such initial deposit prove insufficient. The amount deposited continues to belong to the depositing party and is held in trust by the court. The sheriff assigned to the case draws his expenses from the deposit, subject to liquidation. “The excess amount, if any, is then returned by the court to the depositing party. Thus, the sheriff’s expenses are not payable to the Philippine Government – the condition imposed to warrant exemption from the payment of legal fees for cooperatives under the law and OCA Circular No. 44-2007,” held the Court. (AM No. 03-4-01-0, Exemption of Cooperatives from Payment of Court & Sheriff Fees Payable to the Gov’t In Actions Brought Under RA 6938, September 1, 2009)
The distinction is further reinforced by the way the Court handles those two charges. A party pays a fixed amount as “sheriff’s fees,” which amount is remitted to the SC and accrues to the general fund.