SC rules on credit coop fees

By EDMER F. PANESA

March 5, 2010, 4:31pm

 

The Supreme Court (SC) has ruled that credit cooperatives are not exempt from the payment of legal fees whenever they apply for extrajudicial foreclosure of properties.

In a resolution penned by Senior Associate Justice Antonio T. Carpio, the SC held that foreclosure fees are not covered by the exemption under Republic Act (RA) 6938 or the Cooperative Code of the Philippines.

The ruling was issued in the case of Baguio Market Vendors Multi-Purpose Cooperative (BAMARVEMPCO), which sought a review of a lower court ruling and called for the “simple application” of Article 62(6) of RA 6938 that exempts cooperatives from payment of all court and sheriff’s fees payable to government.

In 2004, the BAMARVEMPCO filed with the Clerk of Court of the Baguio City regional trial court (RTC) a petition to extra-judicially foreclose a mortgage.

Under Section 7(c) of Rule 141 of the Rules of Court, petitions for extrajudicial foreclosure are subject to legal fees based on the value of the mortgagee’s claim.

Invoking Article 62(6) of RA 6938, the BAMARVEMPCO sought exemption from payment of the fees.

But the Baguio City RTC denied the request for exemption, citing Section 22 of Rule 141 exempting from the rule’s coverage only the “Republic of the Philippines, its agencies and instrumentalities” and certain suits of local government units.

It also pointed out that the cooperative’s reliance on Article 62(6) of RA 6938 was misplaced because the fees collected under Rule 141 are not “fees payable to the Philippine government” as they do not accrue to the national treasury but to a special fund under the SC’s control.

Unsatisfied with the lower court decision, the BAMARVEMPCO elevated the case to the High Court.

In its decision, the SC held that Article 62(6) of RA 6938 does not apply to BAMARVEMPCO’s foreclosure proceeding.

The court pointed out that the scope of the legal fees exemption the law grants to cooperatives is limited to only two types of actions — actions brought under RA 6938 and actions brought by the Cooperative Development Authority (CDA) to enforce the payment of obligations contracted in favor of cooperatives.

“By simple deduction, it is immediately apparent that Article 62(6) of RA 6938 is no authority for petitioner to claim exemption from the payment of legal fees in this proceeding because first, the fees imposable on petitioner do not pertain to an action brought under RA 6938 but to a petition for extrajudicial foreclosure of mortgage,” the court said.

http://www.mb.com.ph/articles/246346/sc-rules-credit-coop-fees