RE: PETITION FOR RECOGNITION OF THE EXEMPTION OF THE GSIS FROM PAYMENT OF LEGAL FEES. A.M. No.

08-2-01-0 Februar 11! 2010 FACTS: The GSIS seeks exemption from the payment of legal fees imposed on GOCCs under Sec 22, Rule ! "#egal $ees% of the ROC& The said pro'ision states: SEC. 22. Go"er#$e#% e&e$'%. ( The Repu(lic of the )hilippines, its agencies and instrumentalities are exempt from paying the legal fees pro'ided in this Rule& #ocal go'ernment corporations and go'ernment* o+ned or controlled corporations +ith or +ithout independent charter are #o% exempt from paying such fees& xx The GSIS anchors its petition on Sec ,- of its charter, R. /2- "The GSIS .ct of --0%: SEC. )*. E&e$'%+o# ,ro$ Ta&! Le-a. Pro/e00 a#1 L+e#. ( It is here(y declared to (e the policy of the State that the actuarial sol'ency of the funds of the GSIS shall (e preser'ed and maintained at all times and that contri(ution rates necessary to sustain the (enefits under this .ct shall (e kept as lo+ as possi(le in order not to (urden the mem(ers of the GSIS and their employers& Taxes imposed on the GSIS tend to impair the actuarial sol'ency of its funds and increase the contri(ution rate necessary to sustain the (enefits of this .ct& .ccordingly, not+ithstanding any la+s to the contrary, the GSIS, its assets, re'enues including accruals thereto, and (enefits paid, shall (e exempt from all taxes, assessments, fees, charges or duties of all kinds& These exemptions shall continue unless expressly and specifically re'oked and any assessment against the GSIS as of the appro'al of this .ct are here(y considered paid& Conse1uently, all la+s, ordinances, regulations, issuances, opinions or 2urisprudence contrary to or in derogation of this pro'ision are here(y deemed repealed, superseded and rendered ineffecti'e and +ithout legal force and effect& xx Re1uired to comment on the GSIS3 petition, the OSG maintains that the petition should (e denied& On this Court3s order, the Office of the Chief .ttorney "OC.T% su(mitted a report and recommendation on the petition of the GSIS and the comment of the OSG thereon& .ccording to the OC.T, the claim of the GSIS for exemption from the payment of legal fees has no legal (asis& ISS2E: 4ay the legislature exempt the GSIS from legal fees imposed (y the Court on GOCCs and local go'ernment units5

HEL3: 678R8$OR8, the petition of the GSIS for recognition of its exemption from the payment of legal fees imposed under Sec 22 of Rule ! of the ROC on GOCCs and #G9s is here(y :8;I8: & NO Rule ! "on #egal $ees% of the ROC +as promulgated (y this Court in the exercise of its ru.e-$a4+#- 'o5er0 under Sec <"<%, .rt =III of the Constitution: Sec& <& The Supreme Court shall ha'e the follo+ing po+ers: xxx xxx xxx

"<% )romulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and procedure in all courts, the admission to the practice of la+, the Integrated >ar, and legal assistance to the underpri'ileged& xxx xxx xx

Clearly, therefore, the payment of legal fees under Rule ! of the ROC is an integral part of the rules promulgated (y this Court pursuant to its rule*making po+er under Section <"<%, .rticle =III of the Constitution& In particular, it is part of the rules concerning pleading, practice and procedure in courts& Indeed, payment of legal "or docket% fees is a 6ur+01+/%+o#a. re1uirement& Since the payment of legal fees is a 'ital component of the rules promulgated (y this Court concerning pleading, practice and procedure, it cannot (e 'alidly annulled, changed or modified (y Congress& .s one of the safeguards of this Court3s institutional independence, the po+er to promulgate rules of pleading, practice and procedure is no+ the Court3s exclusi'e domain& That po+er is no longer shared (y this Court +ith Congress, much less +ith the 8xecuti'e& NOTES: *The GSIS cannot successfully in'oke the right to social security of go'ernment employees in support of its petition& It is a corporate entity +hose personality is separate and distinct from that of its indi'idual mem(ers& The rights of its mem(ers are not its rights? its rights, po+ers and functions pertain to it solely and are not shared (y its mem(ers& *Congress could not ha'e car'ed out an exemption for the GSIS from the payment of legal fees +ithout transgressing another e1ually important institutional safeguard of the Court3s independence @ ,+0/a. au%o#o$ & $iscal autonomy recogniAes the po+er and authority of the Court to le'y, assess and collect fees, including legal fees& 4oreo'er, legal fees under Rule ! ha'e t+o (asic components, the Budiciary :e'elopment $und "B:$% and the Special .llo+ance for the Budiciary $und "S.B$%& The la+s +hich esta(lished the B:$ and the S.B$C,,D expressly declare the identical purpose of these

funds to Eguarantee the independence of the Budiciary as mandated (y the Constitution and pu(lic policy&F #egal fees therefore do not only constitute a 'ital source of the Court3s financial resources (ut also comprise an essential element of the Court3s fiscal independence& .ny exemption from the payment of legal fees granted (y Congress to go'ernment*o+ned or controlled corporations and local go'ernment units +ill necessarily reduce the B:$ and the S.B$& 9ndou(tedly, such situation is constitutionally infirm for it impairs the Court3s guaranteed fiscal autonomy and erodes its independence& *Speaking for the Court, then .ssociate Bustice "no+ Chief Bustice% Reynato S& )uno traced the 7+0%or o, %7e ru.e-$a4+#- 'o5er of this Court and highlighted its e'olution and de'elopment in 8chegaray '& Secretary of Bustice:
9nder the -,< Constitution, the po+er of this Court to promulgate rules concerning pleading, practice and procedure +as granted (ut it appeared to (e co*existent +ith legislati'e po+er for it +as su(2ect to the po+er of Congress to repeal, alter or supplement& Thus, its Section ,, .rticle =III pro'ides: Sec& ,& The Supreme Court shall ha'e the po+er to promulgate rules concerning pleading, practice and procedure in all courts, and the admission to the practice of la+& Said rules shall (e uniform for all courts of the same grade and shall not diminish, increase, or modify su(stanti'e rights& The existing la+s on pleading, practice and procedure are here(y repealed as statutes, and are declared Rules of Court, su(2ect to the po+er of the Supreme Court to alter and modify the same& The Congress shall ha'e the po+er to repeal, alter or supplement the rules concerning pleading, practice and procedure, and the admission to the practice of la+ in the )hilippines& The said po+er of Congress, ho+e'er, is not as a(solute as it may appear on its surface& In In re Cunanan, Congress in the exercise of its po+er to amend rules of the Supreme Court regarding admission to the practice of la+, enacted the >ar $lunkers .ct of -<, +hich considered as a passing grade, the a'erage of 0GH in the (ar examinations after Buly !, -!I up to .ugust -< and 0 H in the -<2 (ar examinations& This Court struck do+n the la+ as unconstitutional& In his ponencia, 4r& Bustice :iokno held that Jx x x the disputed la+ is not a legislation? it is a 2udgment * a 2udgment promulgated (y this Court during the aforecited years affecting the (ar candidates concerned? and although this Court certainly can re'oke these 2udgments e'en no+, for 2ustifia(le reasons, it is no less certain that only this Court, and not the legislati'e nor executi'e department, that may do so& .ny attempt on the part of these departments +ould (e a clear usurpation of its function, as is the case +ith the la+ in 1uestion&J The 'enera(le 2urist further ruled: JIt is o('ious, therefore, that the ultimate po+er to grant license for the practice of la+ (elongs exclusi'ely to this Court, and the la+ passed (y Congress on the matter is of permissi'e character, or as other authorities say, merely to fix the minimum conditions for the license&J >y its ruling, this Court 1ualified the a(solutist tone of the po+er of Congress to Jrepeal, alter or supplement the rules concerning pleading, practice and procedure, and the admission to the practice of la+ in the )hilippines& The ruling of this Court in In re Cunanan +as not changed (y the -0, Constitution& $or the -0, Constitution reiterated the po+er of this Court Jto promulgate rules concerning pleading, practice and procedure in all courts, x x x +hich, ho+e'er, may (e repealed, altered or supplemented (y the >atasang )am(ansa x x x&J 4ore completely, Section <"2%< of its .rticle K pro'ided: xxx xxx xxx

Sec& <& The Supreme Court shall ha'e the follo+ing po+ers& xxx "<% xxx xxx

)romulgate rules concerning pleading, practice, and procedure in all courts, the

admission to the practice of la+, and the integration of the >ar, +hich, ho+e'er, may (e repealed, altered, or supplemented (y the >atasang )am(ansa& Such rules shall pro'ide a simplified and inexpensi'e procedure for the speedy disposition of cases, shall (e uniform for all courts of the same grade, and shall not diminish, increase, or modify su(stanti'e rights& 6ell +orth noting is that the -0, Constitution further strengthened the independence of the 2udiciary (y gi'ing to it the additional po+er to promulgate rules go'erning the integration of the >ar& The -/0 Constitution molded an e'en stronger and more independent 2udiciary& .mong others, it enhanced the rule making po+er of this Court& Its Section <"<%, .rticle =III pro'ides: xxx xxx xxx

Section <& The Supreme Court shall ha'e the follo+ing po+ers: xxx xxx xxx

"<% )romulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice and procedure in all courts, the admission to the practice of la+, the Integrated >ar, and legal assistance to the underpri'ileged& Such rules shall pro'ide a simplified and inexpensi'e procedure for the speedy disposition of cases, shall (e uniform for all courts of the same grade, and shall not diminish, increase, or modify su(stanti'e rights& Rules of procedure of special courts and 1uasi*2udicial (odies shall remain effecti'e unless disappro'ed (y the Supreme Court& The rule making po+er of this Court +as expanded& This Court for the first time +as gi'en the po+er to promulgate rules concerning the protection and enforcement of constitutional rights& The Court +as also granted for the first time the po+er to disappro'e rules of procedure of special courts and 1uasi*2udicial (odies& >ut most importantly, the -/0 Constitution took a+ay the po+er of Congress to repeal, alter, or supplement rules concerning pleading, practice and procedure& In fine, the po+er to promulgate rules of pleading, practice and procedure is no longer shared (y this Court +ith Congress, more so +ith the 8xecuti'e&