SEC. 22. Government exempt. - The Republic of the Philippines, its agencies and instrumentalities are exempt from paying the legal fees provided in this Rule. Local government corporations and government-owned or controlled corporations with or without independent charter are not exempt from paying such fees.
However, all court actions, criminal or civil, instituted at the instance of the provincial, city or municipal treasurer or assessor under Sec. 280 of the Local Government Code of 1991 shall be exempt from the payment of court and sheriff's fees. (emphasis supplied)
SEC. 39. Exemption from Tax, Legal Process and Lien. - It is hereby declared to be the policy of the State that the actuarial solvency of the funds of the GSIS shall be preserved and maintained at all times and that contribution rates necessary to sustain the benefits under this Act shall be kept as low as possible in order not to burden the members of the GSIS and their employers. Taxes imposed on the GSIS tend to impair the actuarial solvency of its funds and increase the contribution rate necessary to sustain the benefits of this Act. Accordingly, notwithstanding any laws to the contrary, the GSIS, its assets, revenues including accruals thereto, and benefits paid, shall be exempt from all taxes, assessments, fees, charges or duties of all kinds. These exemptions shall continue unless expressly and specifically revoked and any assessment against the GSIS as of the approval of this Act are hereby considered paid.Consequently, all laws, ordinances, regulations, issuances, opinions or jurisprudence contrary to or in derogation of this provision are hereby deemed repealed, superseded and rendered ineffective and without legal force and effect.
Moreover, these exemptions shall not be affected by subsequent laws to the contrary unless this section is expressly, specifically and categorically revoked or repealed by law and a provision is enacted to substitute or replace the exemption referred to herein as an essential factor to maintain and protect the solvency of the fund, notwithstanding and independently of the guaranty of the national government to secure such solvency or liability.
The funds and/or the properties referred to herein as well as the benefits, sums or monies corresponding to the benefits under this Act shall be exempt from attachment, garnishment, execution, levy or other processes issued by the courts, quasi-judicial agencies or administrative bodies including Commission on Audit (COA) disallowances and from all financial obligations of the members, including his pecuniary accountability arising from or caused or occasioned by his exercise or performance of his official functions or duties, or incurred relative to or in connection with his position or work except when his monetary liability, contractual or otherwise, is in favour of the GSIS. (emphasis supplied)
The OSG contends that there is nothing in Section 39 of RA 8291 that exempts the GSIS from fees imposed by the Court in connection with judicial proceedings. The exemption of the GSIS from "taxes, assessments, fees, charges or duties of all kinds" is necessarily confined to those that do not involve pleading, practice and procedure. Rule 141 has been promulgated by the Court pursuant to its exclusive rule-making power under Section 5(5), Article VIII of the Constitution. Thus, it may not be amended or repealed by Congress.
TO : ALL JUDGES, CLERKS OF COURT AND COURT PERSONNEL OF THE METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS, MUNICIPAL CIRCUIT TRIAL COURTS, SHARI'A CIRCUIT COURTS SUBJECT : REMINDER ON THE STRICT OBSERVANCE OF ADMINISTRATIVE CIRCULAR NO. 3-98 (Re: Payment of Docket and Filing Fees in Extra-Judicial Foreclosure); SECTION 21, RULE 141 OF THE RULES OF COURT; SECTION 3 OF PRESIDENTIAL DECREE NO. 385; and ADMINISTRATIVE CIRCULAR NO. 07-99 (Re: Exercise of Utmost Caution, Prudence, and Judiciousness in Issuance of Temporary Restraining Orders and Writs of Preliminary Injunctions)
Pursuant to the Resolution of the Third Division of the Supreme Court dated 05 April 2004 and to give notice to the concern raised by the [GSIS] to expedite extrajudicial foreclosure cases filed in court, we wish to remind all concerned [of] the pertinent provisions of Administrative Circular No. 3-98, to wit:2. No written request/petition for extrajudicial foreclosure of mortgages, real or chattel, shall be acted upon by the Clerk of Court, as Ex-Officio Sheriff, without the corresponding filing fee having been paid and the receipt thereof attached to the request/petition as provided for in Sec. 7(c), of Rule 141 of the Rules of Court.
3. No certificate of sale shall be issued in favor of the highest bidder until all fees provided for in the aforementioned sections and paragraph 3 of Section 9 (I) of Rule 141 of the Rules of Court shall have been paid.The sheriff shall attach to the records of the case a certified copy of the Official Receipt [O.R.] of the payment of the fees and shall note the O.R. number in the duplicate of the Certificate of Sale attached to the records of the case.
Moreover, to settle any queries as to the status of exemption from payment of docket and legal fees of government entities, Section 21, Rule 141 of the Rules of Court explicitly provides:SEC. 21. Government exempt. - The Republic of the Philippines, its agencies and instrumentalities are exempt from paying the legal fees provided in this Rule. Local governments and government-owned or controlled corporations with or without independent charters are not exempt from paying such fees.11x x x x x x x x x
Sec. 5. The Supreme Court shall have the following powers:x x x x x x x x x(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court.
x x x x x x x x x (emphasis supplied)
Under the 1935 Constitution, the power of this Court to promulgate rules concerning pleading, practice and procedure was granted but it appeared to be co-existent with legislative power for it was subject to the power of Congress to repeal, alter or supplement. Thus, its Section 13, Article VIII provides:Sec. 13. The Supreme Court shall have the power to promulgate rules concerning pleading, practice and procedure in all courts, and the admission to the practice of law. Said rules shall be uniform for all courts of the same grade and shall not diminish, increase, or modify substantive rights. The existing laws on pleading, practice and procedure are hereby repealed as statutes, and are declared Rules of Court, subject to the power of the Supreme Court to alter and modify the same. The Congress shall have the power to repeal, alter or supplement the rules concerning pleading, practice and procedure, and the admission to the practice of law in the Philippines.
The said power of Congress, however, is not as absolute as it may appear on its surface. In In re Cunanan, Congress in the exercise of its power to amend rules of the Supreme Court regarding admission to the practice of law, enacted the Bar Flunkers Act of 1953 which considered as a passing grade, the average of 70% in the bar examinations after July 4, 1946 up to August 1951 and 71% in the 1952 bar examinations. This Court struck down the law as unconstitutional. In his ponencia, Mr. Justice Diokno held that "x x x the disputed law is not a legislation; it is a judgment - a judgment promulgated by this Court during the aforecited years affecting the bar candidates concerned; and although this Court certainly can revoke these judgments even now, for justifiable reasons, it is no less certain that only this Court, and not the legislative nor executive department, that may do so. Any attempt on the part of these departments would be a clear usurpation of its function, as is the case with the law in question." The venerable jurist further ruled: "It is obvious, therefore, that the ultimate power to grant license for the practice of law belongs exclusively to this Court, and the law passed by Congress on the matter is of permissive character, or as other authorities say, merely to fix the minimum conditions for the license." By its ruling, this Court qualified the absolutist tone of the power of Congress to "repeal, alter or supplement the rules concerning pleading, practice and procedure, and the admission to the practice of law in the Philippines.
The ruling of this Court in In re Cunanan was not changed by the 1973 Constitution. For the 1973 Constitution reiterated the power of this Court "to promulgate rules concerning pleading, practice and procedure in all courts, x x x which, however, may be repealed, altered or supplemented by the Batasang Pambansa x x x." More completely, Section 5(2)5 of its Article X provided:x x x x x x x x x
Sec. 5. The Supreme Court shall have the following powers.x x x x x x x x x
(5) Promulgate rules concerning pleading, practice, and procedure in all courts, the admission to the practice of law, and the integration of the Bar, which, however, may be repealed, altered, or supplemented by the Batasang Pambansa. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive rights.
Well worth noting is that the 1973 Constitution further strengthened the independence of the judiciary by giving to it the additional power to promulgate rules governing the integration of the Bar.
The 1987 Constitution molded an even stronger and more independent judiciary. Among others, it enhanced the rule making power of this Court. Its Section 5(5), Article VIII provides:x x x x x x x x x
Section 5. The Supreme Court shall have the following powers:x x x x x x x x x
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court.
The rule making power of this Court was expanded. This Court for the first time was given the power to promulgate rules concerning the protection and enforcement of constitutional rights. The Court was also granted for the first time the power to disapprove rules of procedure of special courts and quasi-judicial bodies. But most importantly, the 1987 Constitution took away the power of Congress to repeal, alter, or supplement rules concerning pleading, practice and procedure. In fine, the power to promulgate rules of pleading, practice and procedure is no longer shared by this Court with Congress, more so with the Executive.
Endnotes:
1The present Section 22 of Rule 141 was originally a single-sentence provision:
SEC. 17. Government exempt. - The Republic of the Philippines is exempt from paying the legal fees provided in this Rule.
When Rule 141 was amended effective November 2, 1990, the provision was re-numbered as Section 19 which read as follows:
SEC. 19. Government exempt. - The Republic of the Philippines is exempt from paying the legal fees provided in this Rule. Local governments and government-owned or controlled corporations with or without independent charters are not exempt from paying such fees.
2 Republic Act.
3 Petition, p. 5. Rollo, p. 5.
4 Id. p. 8.
5 Id.
6 Id., p. 11.
7 Per resolution dated February 19, 2008.
8 Comment of the OSG. Rollo, pp. 34-46.
9 Now a member of this Court.
10 Office of the Court Administrator.
11 Emphasis in the original.
12 Per resolution dated July 8, 2008.
13 Report of the OCAT. Rollo, pp. 81-101.
14 In 1991, the Clerk of Court of the Regional Trial Court of Makati sought clarification of Section 19 (precursor of the present Section 22) of Rule 141 due to the assertion of the GSIS that it did not have to pay legal fees in extrajudicial foreclosure of mortgages. The OCAT, thru then Assistant Chief Attorney (now Associate Justice of this Court) Jose P. Perez, in a memorandum dated April 16, 1985 noted and approved by then Chief Attorney Damasita M. Aquino, rejected the claim of GSIS.
15 These include the National Home Mortgage Finance Corporation, the National Irrigation Administration and local government units, such as the Province of Batangas.
16 Bernas, S.J., Joaquin G., The 1987 Constitution of the Republic of the Philippines: A Commentary, 969 (2003).
17 The term "right of action" is the right to commence and maintain an action. In the law of pleadings, right of action is distinguished from a cause of action in that the former is a remedial right belonging to some persons, while the latter is a formal statement of the operational facts that give rise to such remedial right. The former is a matter of right and depends on the substantive law, while the latter is a matter of statute and is governed by the law of procedure. The right of action springs from the cause of action, but does not accrue until all the facts that constitute the cause of action have occurred (Multi-Realty Development Corporation v. Makati Tuscany Condominium Corporation, G.R. No. 146726, 16 June 2006, 491 SCRA 9).
18 In this connection, Section 1, Rule 141 of the Rules of Court provides:
SEC. 1. Payment of fees. - Upon the filing of the pleading or other application which initiates an action or proceeding, the fees prescribed therefor shall be paid in full.
19 See Manchester Development Corporation v. Court of Appeals, 233 Phil. 579 (1987) and Nestle Philippines, Inc. v. FY Sons, Inc., G.R. No. 150780, 05 May 2006, 489 SCRA 624.
20 Sun Insurance Office, Ltd., (SIOL) v. Asuncion, G.R. Nos. 79937-38, 13 February 1989, 170 SCRA 274.
21 See Section 4, Rule 41 of the Rules of Court:
SEC. 4. Appellate court docket and other lawful fees. - Within the period for taking an appeal, the appellant shall pay to the clerk of court which rendered the judgment or final order appealed from, the full amount of the appellate court docket and other lawful fees. Proof of payment of said fees shall be transmitted to the appellate court together with the original record or the record on appeal.
22 Enriquez v. Enriquez, G.R. No. 139303, 25 August 2005, 468 SCRA 77.
23 Id.
24 Section 11, Aricle III of the Constitution provides:
Sec. 11. Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied to any person by reason of poverty.
25 This is an example of a substantive matter embodied in a rule of procedure. (See Republic v. Gingoyon, G.R. No. 166429, 01 February 2006, 481 SCRA 457).
26 SEC. 16-D. Exemption from Fees and Costs of the Suit. - The clients of the PAO shall be exempt from payment of docket and other fees incidental to instituting an action in court and other quasi-judicial bodies, as an original proceeding or on appeal. The costs of the suit, attorney's fees and contingent fees imposed upon the adversary of the PAO clients after a successful litigation shall be deposited in the National Treasury as trust fund and shall be disbursed for special allowances of authorized officials and lawyers of the PAO.
(In this connection, see resolution dated June 12, 2007 in A. M. No. 07-5-15-SC [Re: RA 9406, Exempting Clients of PAO From Payment of Docket and Other Fees] and OCA Circular No. 121-2007 dated December 11, 2007 [Re: Exemption of the Indigent Clients of the Public Attorney's Office From the Payment of Docket and Other Fees].)
27 Supra note 3.
28 Echegaray v. Secretary of Justice, 361 Phil. 76 (1999).
29 Id.
30 Under Section 3, Article VIII of the Constitution, "[t]he Judiciary shall enjoy fiscal autonomy."
31 Bengzon v. Drilon, G.R. No. 103524, 15 April 1992, 208 SCRA 133.
32 See Amended Administrative Circular No. 35-2004 dated August 20, 2004 (Guidelines in the Allocation of the Legal Fees Collected Under Rule 141 of the Rules of Court, as Amended, between the [SAJF] and the [JDF]).
33 PD 1949 and RA 9227, respectively.
34 Section 1 of PD 1949 provides:Section 1.There is hereby established a [JDF], hereinafter referred to as the Fund, for the benefit of the members and personnel of the Judiciary to help ensure and guarantee the independence of the Judiciary as mandated by the Constitution and public policy and required by the impartial administration of justice. x x x (emphasis supplied)
Section 1 of RA 9227 provides:
Section 1.Declaration of Policy. - It is hereby declared a policy of the State of adopt measures to guarantee the independence of the Judiciary as mandated by the Constitution and public policy, and to ensure impartial administration of justice, as well as an effective and efficient system worthy of public trust and confidence. (emphasis supplied)