Sheriff’s Duties and the Boundaries of Conduct in Foreclosure Sales

In an administrative case against a sheriff, the Supreme Court clarified the boundaries of a sheriff’s conduct in extrajudicial foreclosure sales. While the Court found insufficient evidence of extortion, it still fined the sheriff for engaging in unnecessary discussions about fees with the mortgagee bank a day before the auction. The ruling reminds court personnel that propriety and decorum are not optional—they are essential to preserving public trust in the judiciary.

The Complaint Against Sheriff Marquez

LBC Bank filed an administrative complaint against Juan C. Marquez, Sheriff IV of the Regional Trial Court, Branch 53, Rosales, Pangasinan. The complaint arose from the foreclosure of a real estate mortgage over a property owned by Herminigildo Marzan. The bank alleged three irregularities:

1. The sheriff failed to send the bank a copy of the Notice of Sheriff’s Sale.
2. The sheriff did not comply with the supposed “two-bidder rule” by scheduling only one auction date.
3. The sheriff demanded a 5% sheriff’s fee in exchange for producing a “dummy bidder” to ensure the auction would proceed.

The bank claimed that when its head office disapproved the demand, the sheriff threatened to declare a failure of auction, forcing the bank to republish the notice and reschedule.

The Investigation and Conflicting Accounts

The case was referred to the Executive Judge of RTC, Urdaneta, Pangasinan for investigation. The bank’s witnesses testified that the sheriff approached them the day before the auction and proposed to rig the sale. They claimed he demanded P1,000.00 as advance payment for a dummy bidder, later reducing his demand to P6,000.00.

The sheriff denied all allegations. He explained that he went to the bank to remind officials of the auction and to inform them of the legal fees. He admitted asking for fees but insisted he was merely collecting what the court was entitled to receive. A third-party bidder, Artemio Fulgosino, testified that he submitted a legitimate bid and that the bank eventually emerged as the winning bidder.

The investigating judge recommended the sheriff’s exoneration, finding the bank’s evidence insufficient to prove extortion. The Office of the Court Administrator agreed but recommended that the sheriff be admonished with a warning.

The Court’s Ruling on the Three Charges

The Supreme Court agreed with the investigating judge on the main charges.

On notice. The Court held that existing rules do not require personal notice to a mortgagee in an extrajudicial foreclosure sale. Citing Villavicencio v. Morales, the Court noted that publication of the notice in a newspaper is more than sufficient compliance. The bank itself caused the publication and was fully aware of the auction date.

On the “two-bidder rule.” The Court examined Act No. 3135, which governs extrajudicial foreclosure of real estate mortgages. Section 3 of the Act requires posting of notices for at least twenty days in three public places and publication once a week for three consecutive weeks in a newspaper of general circulation. Nothing in the law requires two auction dates. The sheriff’s practice of scheduling only one date was not irregular.

On extortion. The Court found insufficient evidence to substantiate the charge. The other bidder, Artemio Fulgosino, was a legitimate participant, and there was no reason to doubt the bona fides of his bid. The Court believed the case stemmed from a misunderstanding over the amount of sheriff’s fees.

The Sheriff’s Fee Under Rule 141

The Court clarified the proper sheriff’s fees under Section 9(l) of Rule 141 of the Rules of Court:

• 5% on the first P4,000.00 collected
• 2.5% on all sums in excess of P4,000.00

The sheriff admitted demanding P6,000.00 as his fee. The Court noted that even if he asked for the statutory rate, the amount would have been less than the P7,000.00 the bank estimated. The real problem, the Court observed, was the bank’s unfamiliarity with foreclosure procedures conducted by a sheriff.

Why the Sheriff Was Still Penalized

Despite clearing the sheriff of extortion, the Court found him not entirely without fault. His decision to visit the bank a day before the auction to discuss money matters was unnecessary. The rules already fix the sheriff’s fees. By engaging in such discussions, he gave the bank reason to suspect his motives.

The Court emphasized that sheriffs are officers of the court and agents of the law. Their conduct must be above suspicion, as the image of the court is mirrored in their behavior. A sheriff’s duty is simply to conduct the auction and submit a report—not to solicit or negotiate fees with interested parties.

Because the sheriff had served for over twenty years and conducted about 551 extrajudicial proceedings, the Court found the recommended admonition too light. It imposed a fine of P5,000.00 and sternly warned that a repetition of similar acts would be dealt with more severely.

Practical Takeaways

• Sheriffs must avoid discussing fees with parties before an auction. The rules fix the amounts; any negotiation creates the appearance of impropriety.
• Publication of the notice of sale is sufficient for a mortgagee. Personal notice is not required in extrajudicial foreclosures under Act No. 3135.
• There is no “two-bidder rule” requiring two auction dates. Act No. 3135 prescribes only posting and publication requirements.
• Sheriff’s fees are set by Rule 141. A sheriff may collect 5% on the first P4,000.00 and 2.5% on the excess, but must not demand or negotiate these amounts outside the auction process.
• Court personnel must maintain conduct above suspicion. Even without proof of wrongdoing, behavior that compromises the court’s image can result in administrative sanctions.

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