In “RE: Query of Mr. Roger C. Prioreschi Re Exemption from Legal and Filing Fees of the Good Shepherd Foundation, Inc., En Banc, A.M. No. 09-6-9-SC, August 19, 2009”, the Philippine Supreme Court did not exempt the Good Shepherd Foundation, Inc. from legal and filing fees despite its recognized mission of working for indigent and underprivileged Filipinos. It held that the “free access” clause of the 1987 Philippine Constitution, as implemented by Rule 3 and Rule 141 of the Revised Rules of Court of the Philippines (re: indigent litigants), applies only to natural persons who suffer from economic poverty.
To encourage and promote the growth of charity work in the Philippines, I think it is high time for the Court to amend Rule 3 and Rule 141 of the Rules of Court to accommodate the needs of accredited and reputable non-profit and non-stock juridical persons whose mission are to serve and save the poorest of the poor in Philippine society.
A few years back, the Court risked the ire of the Filipino people, especially the poor litigants, and the Philippine Bar for partnering with Congress for the passage of a special law (R.A. No. 9227) commanding the imposition of radical increases in court docket and filing fees and other legal costs just to double the special allowances of judges and justices (which excluded ordinary court personnel, at that). The issue irked the top leaders of the Integrated Bar of the Philippines (IBP) on constitutional grounds. They filed a well-publicized petition before the Court seeking its nullification. They held protest rallies in front of Congress. But the petition died of a natural death on technical grounds when a majority of the IBP leaders, for unknown and mysterious reasons (and without explaining the matter to its national membership), withdrew their signatures in the petition.
And now, the Court has the gall to refuse the simple request of a reputable corporate charitable institution for exemption from huge court docket and filing fees and other legal costs involving a litigation which affects the said institution. The reason? The charitable institution is “not a poor natural person”. Somehow, I cannot hold my insulting smile founded on disbelief, anger, and shock. Here is a digest of the said case.
In his letter dated May 22, 2009 addressed to the Chief Justice, Mr. Roger C. Prioreschi, administrator of the Good Shepherd Foundation, Inc., questioned OCA Circular No. 42-2005 and Rule 141 of the Rules of Court of the Philippines that reserve the privilege of exemption from docket and filing fees to “indigent persons”. He questioned why the rules excluded foundations or associations that work with and for the most Indigent persons, as in the case of the Good Shepherd Foundation, Inc. which had been reaching out since 1985 “to the poorest among the poor, the newly born and abandoned babies, children who never saw the smile of their mother, old people who cannot afford a few pesos to pay for common prescriptions, broken families who returned to a normal life”, whom the Philippine Government and the Filipino society could not reach to or had rejected or abandoned.
To answer the query of Mr. Prioreschi, the Supreme Court held that it could not grant to foundations like the Good Shepherd Foundation, Inc. the same exemption from payment of legal fees granted to indigent litigants even if the foundations are working for indigent and underprivileged people. The basis for the exemption from legal and filing fees is the free access clause, embodied in Sec. 11, Art. III of the 1987 Constitution, which provides that “free access to the courts and quasi judicial bodies and adequate legal assistance shall not be denied to any person by reason of poverty”.
In implementation of the right of free access under the Constitution, the Supreme Court promulgated rules, specifically, Sec. 21, Rule 3, Rules of Court, and Sec. 19, Rule 141, Rules of Court, which respectively state thus:
“Sec. 21. Indigent party. — A party may be authorized to litigate his action, claim or defense as an indigent if the court, upon an ex parte application and hearing, is satisfied that the party is one who has no money or property sufficient and available for food, shelter and basic necessities for himself and his family.
Such authority shall include an exemption from payment of docket and other lawful fees, and of transcripts of stenographic notes which the court may order to be furnished him. The amount of the docket and other lawful fees which the indigent was exempted from paying shall be a lien on any judgment rendered in the case favorable to the indigent, unless the court otherwise provides.
Any adverse party may contest the grant of such authority at any time before judgment is rendered by the trial court. If the court should determine after hearing that the party declared as an indigent is in fact a person with sufficient income or property, the proper docket and other lawful fees shall be assessed and collected by the clerk of court. If payment is not made within the time fixed by the court, execution shall issue for the payment thereof, without prejudice to such other sanctions as the court may impose.”
“Sec. 19. Indigent litigants exempt from payment of legal fees. – Indigent litigants (a) whose gross income and that of their immediate family do not exceed an amount double the monthly minimum wage of an employee and (b) who do not own real property with a fair market value as stated in the current tax declaration of more than three hundred thousand (P300, 000.00) pesos shall be exempt from payment of legal fees.
The legal fees shall be a lien on any judgment rendered in the case favorable to the indigent litigant unless the court otherwise provides.
To be entitled to the exemption herein provided, the litigant shall execute an affidavit that he and his immediate family do not earn a gross income abovementioned, and they do not own any real property with the fair value aforementioned, supported by an affidavit of a disinterested person attesting to the truth of the litigant’s affidavit. The current tax declaration, if any, shall be attached to the litigant’s affidavit.
Any falsity in the affidavit of litigant or disinterested person shall be sufficient cause to dismiss the complaint or action or to strike out the pleading of that party, without prejudice to whatever criminal liability may have been incurred.”
The Court held that the clear intent and precise language of the aforequoted provisions of the Rules of Court indicated that only a natural party litigant may be regarded as an indigent litigant. The Good Shepherd Foundation, Inc., being a corporation invested by the State with a juridical personality separate and distinct from that of its members, is a juridical person. Among others, it has the power to acquire and possess property of all kinds as well as incur obligations and bring civil or criminal actions, in conformity with the laws and regulations of their organization. As a juridical person, it cannot be accorded the exemption from legal and filing fees granted to indigent litigants.
The Court stated that the free access clause of the Constitution applies only to a natural person who suffers from poverty. It added that extending the exemption to a juridical person on the ground that it works for indigent and underprivileged people may be prone to abuse (even with the imposition of rigid documentation requirements), particularly by corporations and entities bent on circumventing the rule on payment of the fees and that the scrutiny of compliance with the documentation requirements may prove too time-consuming and wasteful for the courts.
