G.R. No. 149715 ; May 29, 2002
UNITED COCONUT PLANTERS BANK, petitioner, vs. HON. VICENTE L. YAP, in his capacity as EXECUTIVE JUDGE OF THE REGIONAL TRIAL COURT OF PASAY CITY and ATTY. PEPITO S. CELESTINO, in his capacity as CLERK OF COURT and EX-OFFICIO SHERIFF OF THE REGIONAL TRIAL COURT OF PASAY CITY, respondents.

FACTS

Petitioner United Coconut Planters Bank (UCPB) filed an application for the extrajudicial foreclosure of real estate mortgages on February 28, 2000. The auction sale was subsequently held on April 13, 2000, with UCPB emerging as the highest bidder. However, the respondent Clerk of Court and Ex-Officio Sheriff withheld the issuance of the corresponding certificate of sale, demanding payment of a notarial commission amounting to P18,089,900.00. This demand was based on the increased fee rates prescribed under Administrative Circular No. A.M. No. 00-2-01-SC, which amended Rule 141 of the Rules of Court and took effect on March 1, 2000.
UCPB contested the demand, arguing that the new, higher rates should not apply because its application for foreclosure was filed on February 28, 2000, before the circular’s effectivity. The respondent Executive Judge denied UCPB’s request for approval of the certificate without payment, prompting UCPB to file a petition for certiorari and mandamus. The Court of Appeals dismissed the petition, ruling that the new procedural rates applied. UCPB appealed to the Supreme Court, also raising an alternative argument that a subsequent amendment capping such fees at P100,000.00 should apply.

ISSUE

Whether the increased notarial commission fees under Circular A.M. No. 00-2-01-SC apply to the extrajudicial foreclosure sale where the application was filed before, but the auction was conducted after, the circular’s effectivity.

RULING

Yes, the increased fees apply. The Supreme Court affirmed the Court of Appeals’ decision. The legal logic hinges on the nature of the fee and the specific point in the foreclosure process when the obligation to pay it accrues. The Court distinguished between different types of fees in a foreclosure proceeding. Filing fees are determined by the rates in effect at the time the application is filed. In contrast, the notarial commission under Rule 141, Section 20(e) is a fee for the issuance of the certificate of sale, contingent upon the successful conclusion of the auction where a highest bidder is determined and money is collected.
Since the auction sale occurred on April 13, 2000, and the certificate of sale was to be issued thereafter, the obligation to pay the commission arose only at that later stage. By that date, Circular A.M. No. 00-2-01-SC had already taken effect. Therefore, the increased rates govern. The Court rejected the argument that the foreclosure is a single, indivisible process, clarifying that different fees attach to distinct procedural steps.
Regarding the alternative argument, the Court ruled that the P100,000.00 cap on such fees, introduced by an amendment effective March 1, 2001, could not be applied retroactively to this case. The auction and the obligation to pay arose in April 2000, and applying the cap retroactively would adversely affect valid collections made under the higher rates before the cap’s implementation.