Remedial Law

BAGUIO MARKET VENDORS MULTI-PURPOSE COOPERATIVE v. CABATO-CORTES GR No. 165922, Feb 26, 2010 627 Phil. 543 Legal Fees, Cooperative Code of the Philippines

FACTS:

Petitioner Baguio Market Vendors Multi-Purpose Cooperative is a credit cooperative organized under RA 6938, or the Cooperative Code of the Philippines.

Article 62(6) of RA 6938 exempts cooperatives:

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 action is brought by the Cooperative Development Authority before the court, to enforce the payment of obligations contracted in favor of the cooperative.

Petitioner, as mortgagee, filed with the RTC of Baguio City a petition to extrajudicially foreclose a mortgage. Invoking Article 62 (6) of RA 6938, petitioner sought exemption from payment of the fees.

Judge Iluminada Cabato-Cortes (respondent), denied the request for exemption ruling that under Section 7(c) of Rule 141, as amended, petitions for extrajudicial foreclosure are subject to legal fees based on the value of the mortgagee’s claim.

Petitioner’s MR was denied.

Hence, this petition.

ISSUE:

Whether petitioner’s application for extrajudicial foreclosure is exempt from legal fees under Article 62(6) of RA 6938.

RULING:

We hold that Article 62(6) of RA 6938 does not apply to petitioner’s foreclosure proceeding.

Petitions for Extrajudicial Foreclosure Outside of the Ambit of Article 62(6) of RA 6938

The scope of the legal fees exemption Article 62(6) of RA 6938 grants to cooperatives is limited to two types of actions, namely:

(1) actions brought under RA 6938; and (2) actions brought by the Cooperative Development Authority to enforce the payment of obligations contracted in favor of cooperatives.

It is 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 under Act 3135.

Second, petitioner is not the Cooperative Development Authority which can claim exemption only in actions to enforce payments of obligations on behalf of cooperatives.

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