OFFICE OF THE COURT ADMINISTRATOR, COMPLAINANT, VS. ROGER D. COREA, SHERIFF IV, REGIONAL TRIAL COURT, BRANCH 39, POLOMOLOK, SOUTH COTOBATO, RESPONDENT.

Office of the Court Administrator versus Corea

The Case

This is an administrative case brought by the Office of the Court Administrator against Sheriff Roger D. Corea, Sheriff Four of the Regional Trial Court of Polomolok, South Cotabato, Branch Thirty-Nine. The complaint arose from a letter of Elsie Lansang, general manager of the Rural Bank of Polomolok, asking the Supreme Court whether it was proper for the sheriff to bill the bank three thousand pesos per extrajudicial foreclosure case for his service fee and incidental expenses. The case matters because it fixes, as a rule, who may collect fees in extrajudicial foreclosure and how much may be collected, and because it measures the conduct of sheriffs against the exacting standard of a public office that is a public trust.

Procedural History

The matter began as a letter to the Supreme Court, which the Court Administrator referred to Executive Judge Eddie Rojas of the trial court for appropriate action. Judge Rojas required the sheriff to comment, and the sheriff answered. The Office of the Court Administrator then submitted an agenda report, which the Supreme Court treated as an administrative complaint, docketed it as a regular administrative matter, and directed the sheriff to comment. The Court later referred the matter to Executive Judge Oscar Noel, Junior of the Regional Trial Court of General Santos City for investigation, report, and recommendation. Judge Noel submitted a partial report recommending that the sheriff at least be admonished or reprimanded, and later a report recommending dismissal because the complainant failed to appear at the scheduled hearings. The Office of the Court Administrator submitted its memorandum recommending a finding of guilt for conduct prejudicial to the best interest of the service and a fine of five thousand pesos. The Court required the sheriff to manifest whether he was willing to submit the matter for resolution on the pleadings, and he manifested that he was. The case was thus resolved by the Supreme Court in its administrative jurisdiction.

Facts

Elsie Lansang, general manager of the Rural Bank of Polomolok, received from Sheriff Corea a billing statement dated June 30, 2009, asking for six thousand pesos as sheriff service fee and incidental expenses in two extrajudicial foreclosure cases, three thousand pesos for each case, chargeable to the account of the mortgagors. The statement closed with the line that the sheriff awaited the bank's kind consideration and immediate approval upon receipt. Elsie asked whether the charges were proper, legal, and in accordance with law.

In his answer, the sheriff admitted sending the billing statement. He explained that the former general manager, Engineer Jose Lansang, Elsie's late husband, had received similar statements, and that the line inviting approval was a rider allowing the bank to determine the proper amounts. He insisted that he had no discretion to standardize any fee, that he had billed Elsie only once, that the foreclosure and auction sale had been completed, and that the only problem was a misunderstanding. Elsie replied that even during her husband's time the board had always questioned the billings as high, unjustifiable, unsupported by receipts, and not based on any Supreme Court circular, but that the bank tolerated and paid them for fear that the sheriff would delay or ignore its foreclosure applications.

Judge Noel reported that he could not reach Elsie despite several invitations, and that local sheriffs normally did not bill parties but merely prepared estimates, leaving the funds to the party. He recommended that a petty cash fund be maintained, with cash advances from the Office of the Clerk of Court subject to liquidation, and that parties pay actual expenses directly to the court's cashier. The Office of the Court Administrator found that under the governing circular only the Clerk of Court may collect the fees before extrajudicial foreclosure, subject to a single exception.

Issues

• Whether or not Sheriff Corea had the authority to bill and collect from the Rural Bank of Polomolok his service fees and incidental expenses for the extrajudicial foreclosure of mortgages conducted by him.
• Whether or not the amount of three thousand pesos per case that he sought to collect was proper and in accordance with the rules.
• Whether or not Sheriff Corea's conduct constituted conduct prejudicial to the best interest of the service, and if so, what penalty should be imposed.

Applicable Provisions

Section 2 of Circular Number 7-2002 provides:

Sec. 2. Upon receipt of the application, the Clerk of Court shall: x x x x For the conduct of extra-judicial foreclosure of real estate or chattel mortgage under the direction of the sheriff, collect the appropriate filing fees and issue the corresponding official receipt pursuant to the following schedule: If the amount of the indebtedness or the mortgagee's claim is: (1) Less than P50.000.00................................................................................... P550.00 (2) P50,000.00 or more but less than P100.000.00............................................. 800.00 (3) P100,000.00 or more but less than P150,000.00............................................. 1,000.00 (4) P150,000.00 or more but less than P200,000.00............................................ 1,300.00 (5) P200,000.00 or more but less than P250,000.00............................................. 2,000.00 (6) P250.000.00 or more but less than P300.000.00........................................... 2,500.00 (7) P300,000.00 or more but less than P400,000.00............................................ 3,000.00 (8) P400.000.00 or more but less than P500,000.00............................................ 3,500.00 (9) P500,000.00 or more but not more than P1,000,000.000.00........................................................................................ 4,000.00 (10) For each P1,000.00 in excess of P1,000,000.00........................................... 20.00 x x x x Cooperatives, thrift banks, and rural banks are not exempt from the payment of filing fees and other fees under these guidelines (A.M. No. 98-9-280-RTC, September 29, 1998; A.M. No. 99-3-93-RTC, April 20, 1999; and A.M. No. 92-9-408-0).

This provision vests the collection of filing fees in the Clerk of Court and fixes the amounts, and it expressly covers rural banks such as the complainant.

Section 6 of the same circular provides:

Sec. 6. After the sale, the Clerk of Court shall collect the appropriate fees pursuant to Sec. 9(1), Rule 141, as amended by A.M. No. 00-2-01-SC, computed on the basis of the amount actually collected by him, which fee shall not exceed P100,000.00 (A.M. No. 99-10-05-0, March 1, 2001 2[d]). The amount paid shall not be subject to a refund even if the foreclosed property is subsequently redeemed.

This provision confirms that even after the sale, it is the Clerk of Court, not the sheriff, who collects the fees.

Section 9 of the same circular provides:

Sec. 9. Upon presentation of the appropriate receipts, the Clerk of Court shall issue and sign the Certificate of Sale, subject to the approval of the Executive Judge or, in the latter's absence, the Vice-Executive Judge. Prior to the issuance of the Certificate of Sale, the Clerk of Court shall, in extra-judicial foreclosure conducted under the direction of the sheriff, collect P300.00 as provided in Section 20(d), Rule 141, as amended, and in extra-judicial foreclosure sales conducted under the direction of a notary public, collect the appropriate fees pursuant to Rule 141, §20(e), which amount shall not exceed PI00,000.00 (Minute Res., A.M. No. 99-10-05-0, August 7, 2001).

This provision again places collection in the hands of the Clerk of Court before the certificate of sale is issued.

Section 10 of Rule 141 of the Revised Rules of Court provides:

Sec. 10. Sheriffs, PROCESS SERVERS and other persons serving processes. - x x x x (h) For SERVICES RELATING TO THE POSTING AND PUBLICATION REQUIREMENTS UNDER RULE 39 (EXECUTION, SATISFACTION AND EFFECT OF JUDGMENTS) AND IN EXTRAJUDICIAL FORECLOSURE OF MORTGAGE BY SHERIFF OR NOTARY PUBLIC besides the cost of publication, ONE HUNDRED AND FIFTY (P150.00) PESOS; x x x x (1) For money collected by him ACTUAL OR CONSTRUCTIVE (WHEN HIGHEST BIDDER IS THE MORTGAGEE AND THERE IS NO ACTUAL COLLECTION OF MONEY) by order, execution, attachment, or any other process, judicial or extrajudicial which shall immediately be turned over to the Clerk of Court, the following sums shall be paid to the clerk of court to wit: (1) On the first FOUR THOUSAND (P4,000.00) PESOS, FIVE AND A HALF (5.5%) per centum; (2) On all sums in excess of FOUR THOUSAND (P4,000.00) PESOS, THREE (3%) per centum;

This provision fixes the sheriff's fee for posting and publication at one hundred fifty pesos and requires money collected to be turned over to the Clerk of Court.

Section 21 of Rule 141 of the Revised Rules of Court provides:

Sec. 21. Other fees. - The following fees shall also be collected by the clerks of the Regional Trial Courts or courts of the first level, as the case may be: x x x x (d) For entries of certificates of sale and final deeds of sale in extra judicial foreclosures of mortgages, FIVE HUNDRED (P500.00) PESOS[.]

This provision likewise lodges collection in the clerks of court.

Ruling

On the first issue, the Court held that Sheriff Corea had no authority to bill and collect from the bank. The Revised Rules of Court amended only the amounts of the fees; the guidelines under Circular Number 7-2002 still apply, and under those guidelines only the Clerk of Court is authorized to collect payment. The sheriff never claimed that he was billing and collecting for, and turning over the amounts to, the Clerk of Court.

On the second issue, the Court held that the three thousand pesos per case was baseless and arbitrary, because the circular in relation to the Revised Rules of Court precisely fixed the collectible fees. His willingness to adjust the amounts only raised doubts as to their propriety and veracity. The Court found it believable that the bank paid previous billings out of fear of delay.

On the third issue, the Court held that the sheriff's conduct fell short of the exacting standards of his position and constituted conduct prejudicial to the best interest of the service. The Court recalled its teaching that a sheriff cannot unilaterally demand sums of money from a party-litigant without observing the proper procedural steps, otherwise it would amount to dishonesty or extortion, and that even if done in good faith, such actuations would be tainted with suspicions of dishonesty or extortion. The Court defined the word prejudicial as detrimental or derogatory to a party, naturally, probably, or actually bringing about a wrong result. While the offense is grave and punishable by suspension of six months and one day to one year for a first offense, the Court considered the sheriff's almost twenty-two years in the service as a mitigating circumstance and imposed a suspension of two months.

Doctrine

In extrajudicial foreclosure of real estate and chattel mortgage under the direction of the sheriff, only the Clerk of Court may collect the filing fees and other fees, and the amounts are those fixed by Circular Number 7-2002 in relation to Rule 141 of the Revised Rules of Court. A sheriff who bills and collects service fees and incidental expenses directly from a party acts without authority, and his conduct is prejudicial to the best interest of the service. A sheriff cannot unilaterally demand sums of money from a party-litigant without observing the proper procedural steps; to do so amounts to dishonesty or extortion, and good faith does not remove the appearance of impropriety. Length of service may be taken as a mitigating circumstance in fixing the penalty.

Disposition

The Court found Sheriff Corea guilty of conduct prejudicial to the best interest of the service and suspended him without pay for two months, with a stern warning that a repetition would be dealt with more severely.

Remember This

Memorize the line that only the Clerk of Court may collect the fees in extrajudicial foreclosure, and that a sheriff who bills a party directly commits conduct prejudicial to the best interest of the service. Examiners use this case in legal ethics and judicial administration questions on the conduct of sheriffs and on the collection of fees under Rule 141 and Circular Number 7-2002.