Sheriffs Cannot Bill or Collect Extrajudicial Foreclosure Fees—Only the Clerk of Court May

Sheriffs Cannot Bill or Collect Extrajudicial Foreclosure Fees—Only the Clerk of Court May

When a bank applies for extrajudicial foreclosure, who should pay the sheriff's fees—and to whom? A 2015 Supreme Court ruling answers this clearly: only the Clerk of Court may collect such fees, and a sheriff who bills parties directly acts without authority.

The case of Office of the Court Administrator v. Corea (A.M. No. P-11-2992, November 9, 2015) involved Sheriff Roger D. Corea of the Regional Trial Court, Branch 39, Polomolok, South Cotabato. He sent the Rural Bank of Polomolok a billing statement demanding P3,000.00 per extrajudicial foreclosure case—P6,000.00 total for two cases—for "sheriff service fee and other incidental expenses."

The bank's general manager questioned the charges. The Office of the Court Administrator (OCA) later investigated and found the sheriff liable.

The Issue

The central question was whether Sheriff Corea had the authority to bill and collect fees directly from a party for conducting extrajudicial foreclosures. The Supreme Court answered no.

The Governing Rules

The Court applied Circular No. 7-2002, which implements the procedure for extrajudicial foreclosure of mortgages. Under Section 2 of that Circular, the Clerk of Court—not the sheriff—collects filing fees upon receipt of the foreclosure application. The fees are fixed by schedule, ranging from P550.00 for claims under P50,000.00 up to P4,000.00 for claims of P500,000.00 to P1,000,000.00, plus P20.00 for each additional P1,000.00.

The Court also cited the Revised Rules of Court, which amended Rule 141. Under the current provisions:

• A fee of P150.00 is allowed for services relating to posting and publication requirements in extrajudicial foreclosures.
• A percentage fee applies on money collected, payable to the Clerk of Court.
• A P500.00 fee is set for entries of certificates of sale and final deeds of sale.

These amendments changed the fee amounts but did not change who collects them. The guidelines under Circular No. 7-2002 still apply: only the Clerk of Court is authorized to collect payment for such fees.

Why the Sheriff's Conduct Was Wrong

Sheriff Corea did not deny sending the billing statement. He argued the amounts were not fixed and were subject to the bank's approval. The Court rejected this defense.

First, the sheriff had no authority to bill or collect at all. Second, the P3,000.00 per case was "clearly baseless and arbitrary" because the rules fixed the collectible fees. Third, his willingness to adjust the amounts "only further raises doubts as to the propriety and veracity of the same." He also never claimed he was turning over collections to the Clerk of Court.

The Court found it believable that the bank paid previous billings out of fear that the sheriff would delay or refuse to conduct the foreclosures. Citing Judge Tan v. Paredes (502 Phil. 305), the Court stressed that a sheriff "cannot just unilaterally demand sums of money from a party-litigant without observing the proper procedural steps, otherwise, it would amount to dishonesty or extortion."

The Penalty

The Court found Sheriff Corea guilty of conduct prejudicial to the best interest of the service, a grave offense under the Revised Rules on Administrative Cases in the Civil Service. Considering his nearly 22 years in service, the Court suspended him without pay for two months and sternly warned him against repetition.

Practical Takeaways

• Only the Clerk of Court collects foreclosure fees. Sheriffs have no authority to bill or collect fees directly from parties in extrajudicial foreclosures.
• Fee amounts are fixed by rule. Sheriffs cannot demand arbitrary amounts. The schedule in Circular No. 7-2002 and Rule 141 of the Rules of Court governs.
• "Subject to approval" is not a defense. A sheriff's willingness to adjust fees does not cure the lack of authority to collect them.
• Parties should pay only the Clerk of Court. Banks and mortgagors should insist on official receipts and pay through the court's cashier, not to the sheriff personally.
• Direct billing invites administrative liability. Sheriffs who bill parties unilaterally risk suspension or dismissal, even if they claim good faith.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.