A.M. No. 08-8-7-SC – Re: The Rule of Procedure for Small Claims Cases

EN BANC

A.M. No. 08-8-7-SC             November 21, 2000

RE: THE RULE OF PROCEDURE FOR SMALL CLAIMS CASES

R E S O L U T I O N

Acting on the recommendation of the Chairperson, Technical Working Group, Committee on Revision of the Rules of Court, submitting for the consideration and approval of the Court the proposed “The Rule of Procedure for Small Claims Cases,” the Court Resolved to APPROVE the same.

The Rule shall take effect on October 01, 2008 following its publication two (2) newspaper of general circulation.

September 9, 2008

RULE OF PROCEDURE FOR SMALL CLAIMS CASES

Section 1. Title. – This Rule shall be known as ” The Rule of Procedure for Small Claims Cases.”

Section 2. Scope. – This Rule shall govern the procedure in actions before the Metropolitan trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts and Municipal Circuit Trial Courts for payment of money where the value of the claim does not exceed One Hundred Thousand Pesos (P100,000.00) exclusive of interest and costs.

Section 3. Definiton of Terms. – For purposes of this Rule:

(a) Plaintiff – refers to the party who initiated a small claims action. The term includes a defendant who has filed a counterclaim against plainfill;

(b) Defendant – is the party against whom the plaintiff has filed a small claims action. The term includes a plaintiff against whom a defendant has filed a claim, or a person who replies to the claim;

(c) Person – is an individual, corporation, partnership, limited liability partnership, association, or other juridical entity endowed with personality by law;

(d) Individual – is a natural person;

(e) Motion – means a party’s request, written or oral, to the court for an orderaction. It shall include an informal written request to the court, such as a letter;

(f) Good cause – means circumtances sufficient to justify the requested order or other action, as determined by the judge; and

(g) Affidavit – means a written statement or declaration of facts that are shown or affirmed to be true.

Section 4. Applicability – The Metropolitan Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts, and Municipal Circuit Trial Courts shall apply this Rule in all actions which are; (a) purely civil in nature where the claim or relief prayed for by the plaintiff is solely for payment or reimbursement of sum of money, and (b) the civil aspect of criminal action, or reserved upon the filing of the criminal action in court, pursuant to Rule of 111 of the Revised Rules of Criminal Procedure.

These claims or demands may be;

(a) For money owned under any of the following;

1. Contract of Lease;

2. Contract of Loan;

3. Contract of Services;

4. Contract of Sale; or

5. Contract of Mortgage;

(b) For damages arising from any of the following;

1. Fault or negligence;

2. Quasi-contract; or

3. Contract;

(c) The enforcement of a barangay amicable settlement or an arbitration award involving a money claim covered by this Rule pursuant to Sec. 417 of Republic Act 7160, otherwise known as the Local Government Code of 1991.

Section 5. Commencement of Small Claims Action. – A small claims action is commenced by filing with the court an accomplished and verified Statement of Claim (Form 1 – SCC) in duplicate, accompanied by a Certification of Non-forum Shopping (Form 1-A,SCC), and two (2) duly certified photocopies of the actionable document/s subjects of the claim, as well as the affidavits of witnesses and other evidence to support the claim. No evidence shall be allowed during the hearing which was not attached to or submitted together with the Claim, unless good cause is shown for the admission of additional evidence.

No formal pleading, other than the Statement of Claim described in this Rule, is necessary to initiate a small claims action.

Section 6. Joinder of Claims – Plaintiff may join in a single statement of claim one or more separate small claims against a defendant provided that the total amount claimed, exclusive of interest and costs, does not exceed P100,00.00.

Section 7. Affidavits – The affidavits submitted under this Rule shall state only facts of direct personal knowledge of the affiants which are admissible in evidence.

A violation of this requirement shall subject the party, and the counsel who assisted the party in the preparation of the affidavits, if any, to appropriate disciplinary action. The inadmissible affidavit(s) or portion(s) thereof shall be expunged from the record.

Section 8. Payment of Filing Fees. – The plaintiff shall pay the docket and other legal fees prescribed under Rule 141 of the Revised Rules of Court, unless allowed to litigate as an indigent.

A claim filed with a motion to sue as indigent (Form 6-SCC) shall be referred to the Executive Judge for immediate action in case of multi-sala courts, or to the Presiding Judge of the court hearing the small claims case. If the motion is granted by the Executive Judge, the case shall be raffled off or assigned to the court designated to hear small claims cases. If the motion is denied, the plaintiff shall be given five (5) days within which to pay the docket fees, otherwise, the case shall be dismissed without prejudice. In no case shall a party, even if declared an indigent, be exempt from the payment of the P1,000.00 fee for service of summons and processes in civil cases.

Section 9. Dismissal of the Claim. – After the court determines that the case falls under this Rule, it may, from an examination of the allegations of the Statement of Claim and such evidence attached thereto, by itself, dismiss the case outright of any of the grounds apparent from the Claim for the dismissal of a civil action.

Section 10. Summons and Notice of Hearing – If no ground for dismissal is found, the court shall forthwith issue Summons (Form 2-SCC) on the day of receipt of the Statement of Claim, directing the defendant to submit a verified Response.

The court shall also issue a Notice (Form 4-SCC) to both parties, directing them to appear before it on a specific date and time for hearing, with a warning that no unjustified postponement shall be allowed, as provided in Section 19 of this Rule.

The summons and notice to be served on the defendant shall be accompanied by a copy of the Statement of Claim and documents submitted by plaintiff, and a copy of the Response (Form 3-SCC) to be accomplished by the defendant. The Notice shall contain an express prohibition against the filing of a motion to dismiss or any other motion under Section 14 of this Rule.

Section 11. Response – The defendant shall file with the court and serve on the plaintiff a duly accomplished and verified Response within a non – extendible period of ten (10) days from receipt of summons. The Response shall be accompanied by certified photocopies of documents, as well as affidavits of witnesses and other evidence in support thereof. No evidence shall be allowed during the hearing which was not attached to or submitted together with the Response, unless good cause is shown for the admission of additional evidence.

Section 12. Effect of Failure to File Response – Should the defendant fail to file his response within the required period, the court by itself shall render judgement as may be warranted by the facts alleged in the Statement of claim limited to what is prayed for. The court however, may, in its discretion, reduce the amount of damages for being excessive or unconscionable

Section 13. Counterclaims Within the Coverage of this Rule – If at the time the action is commenced, the defendant possesses a claim against the plaintiff that (a) is within the coverage of this rule, exclusive of interest and costs; (b) arises out of the same transaction or event that is the subject matter of the plaintiff’s claim; (c) does not require for its adjudication the joinder of third parties; and (d) is not the subject of another pending action, the claim shall be filed as a counterclaim in the response; otherwise, the defendant shall be barred from suit on the counterclaim.

The defendant may also elect to the file a counterclaim against the plaintiff that does not arise out of the same transaction or occurrence , provided that the amount and nature thereof are within the coverage of this Rule and the prescribed docket and the other legal fees are paid.

Section 14. Prohibited Pleadings and Motions – The following pleadings, motions, and petitions shall not be allowed in the cases covered by this Rule:

(a) Motion to dismiss the compliant except on the ground of lack of jurisdiction;

(b) Motion for a bill of particulars;

(c) Motion for new trial, or for reconsideration of a judgement, or for reopening of trial;

(d) Petiton for relief from judgement;

(e) Motion for extension of time to file pleadings, affidavits, or any other paper;

(f) Memoranda;

(g) Petition for certiorari, mandamus, or prohibition against any interlocutory order issued by the court;

(h) Motion to declare the defendant in default;

(i) Dilatory motions for postponement;

(j) Reply;

(k) Third-party complaints; and

(l) Interventions.

Section 15. Availability of Forms; Assistance by Court Personnel. – The Clerk of Court or other personnel shall provide such assistance as may be requested by a plaintiff or a defendant regarding the availability of forms and other information about the coverage, requirements as well as procedure for small claims cases.

Section 16. Appearance. – the parties shall appear at the designated date of hearing personally or through a representative authorized under a Special Power of Attorney (Form 5-SCC ) to enter into an amicable settlement, to submit of Judicial Dispute Resolution (JDR) and to enter into stipulations or admissions of facts and of documentary exhibits

Section 17. Appearance of Attorneys Not Allowed. – No attorney shall appear in behalf of or represent a party at the hearing, unless the attorney is the plaintiff or defendant.

If the court determines that a party cannot properly present his/her claim or defense and needs assistance, the court may, in its discretion, allow another individual who is not an attorney to assist that party upon the latter’s consent.

Section 18. Non-appearance of Parties. – Failure of the plaintiff to appear shall be cause for the dismissal of the claim without prejudice. The defendant who appears shall be entitled to judgement on a permissive counterclaim.

Failure of the defendant to appear shall have the same effect as failure to file a Response under Section 12 of this Rule. This shall not apply where one of two or more defendants who are sued under a common cause of action and have pleaded a common defense appears at the hearing.

Failure of both parties to appear shall cause the dismissal with prejudice of both the claim and counterclaim.

Section 19. Postponement When Allowed. – A request for postponement of a hearing may be granted only upon proof of the physical inability of the party to appear before the court on the scheduled date and time. A party may avail of only one (1) postponement.

Section 20. Duty of the Court. – At the beginning of the court session, the judge shall read aloud a short statement explaining the nature, purpose and the rule of procedure of small claims cases.

Section 21. Judicial Dispute Resolution. – At the hearing, the judge shall conduct Judicial Dispute Resolution (JDR) through mediation, conciliation, early neutral evaluation, or any other mode of JDR. Any settlement (Form 7-SCC) or resolution (Form 8-SCC) of the dispute shall be reduced into writing, signed by the parties and submitted to the court for approval (Form 12-SCC).

Section 22. Failure of JDR. – If JDR fails and the parties agree in writing (Form 10-SCC) that the hearing of the case shall be presided over by the judge who conducted the JDR, the hearing shall so proceed in an informal and expeditious manner and terminated within one (1) day.

Absent such agreement, (a) in case of a multi-sala court , the case shall, on the same day, be transmitted (Form 11-SCC) to the Office of the Clerk of Court for immediate referral by the Executive Judge to the pairing judge for hearing and decision within five (5) working days from referral; and (b) in case of single sala court, the pairing judge shall hear and decide the case in the court of origin within five (5) working days from referral by the JDR judge.

Section 23. Decision. – After the hearing, the court shall render its decision on the same day, based on the facts established by the evidence (Form 13-SCC). The decision shall immediately be entered by the Clerk of Court in the court docket for civil cases and a copy thereof forthwith served on the parties.

The decision shall be final and unappealable.

Section 24. Execution. – If the decision is rendered in favor of the plaintiff, execution shall issue upon motion (Form 9-SCC).

Section 25. Applicability. of the Rules of Civil Procedure – The Rules of Civil procedure shall apply suppletorily insofar as they are not inconsistent with this rule.

Section 26. Effectivity. – This Rule shall take effect on October 01, 2008 for the pilot courts designated to apply the procedure for small claims cases following its publication in two newspaper of general circulation.

RATIONALE
of the
Proposed Rule of Procedure for Small Claims Cases

1. Introduction
2. The History and the Reforms of Small Claims Court
3. Introduction of the Concept of Small Claims Court in the Philippines
4. streamlining procedural rules to eliminate provisions that cause delay and permit dilatory tactics;
5. re-engineering the jurisdictional structure of the courts to ensure easy geographical access to the courts particularly by the poor litigants.
6. improving the case management system toward more transparency, accountability and integrity of the judicial process and for better efficiency; and
7. strengthening of the mediation mechanism to promote early dispute resolution nationwide. This involves the institutionalization of court-annexed mediation, and the establishment of a Mediation Center to continually monitor and assess the performance of the system and provide training and research.
8. The development of Rules and Procedures to Implement pilot Small Claims Courts;
9. The establishment of Criteria to Select Appropriate regions/Judges for pilot Small Claims Courts and set Peso Limits for the Small Claims Courts;
10. Through the Philippine Judicial Academy, the conduct of training programs for Judges and their personnel participating in the Pilot Small Claims Courts project; and
11. The employment of “justice on Wheels” buses to launch pilot small claims tribunals.
12. The Rule governs the procedure in actions before the first level courts, i.e., Metropolitan Trial Courts, Municipal Trials Courts in Cities, Municipal Trial Courts and Municipal Circuit Trial Courts (excluding Shari’a Circuit Courts) for the payment of money where the value of the claim does not exceed One Hundred Thousand Pesos (₧100,000.00) exclusive of interest and costs.
13. This Rule applies to all actions that are: (a) purely civil in nature where the claim or relief prayed for by the plaintiff is solely for payment/reimbursement of a sum of money, and (b) the civil aspect of criminal actions, either filed prior to the institution of the criminal action, or reserved upon the filing of the criminal action in court, pursuant to Rule 111 of the Revised Rules of Criminal Procedure. These claims or demands may be:
14. For money owed under any of the following:
15. Contract of lease;
16. Contract of loan;
17. Contract of services;
18. Contract of sale; or
19. Contract of mortgage;
20. For damages arising from:
21. Fault or negligence;
22. Quasi-contract; or
23. Contract;
24. Enforcement of a barangay amicable settlement or an arbitration award involving money claims covered by this Rule pursuant to Sec. 417 of Republic Act No. 7160, otherwise known as the “Local Government Code of 1991.”
25. Actual damage caused to vehicles, other personal property, real property or person;
26. Payment or reimbursement for property, deposit, or money loaned;
27. Payment for services rendered, insurance claim, rent, commissions, or for goods sold and delivered;
28. Money claim pursuant to contact, warranty or agreement; and
29. Purely civil action for payment of money covered by bounced or stopped check.
30. A small claims action is commenced by filing with the court an accomplished and verified Statement of Claim in duplicate, accompanied by Certification of Non-Forum Shopping, a nd two (2) duly certified photocopies of the actionable document/s subject of the claim. No evidence shall be allowed during the hearing which was not attached to or submitted together with the Claim, unless good cause is shown for the admission of additional evidence.
31. Plaintiff may join in a single Statement of Claim one or more separate small claims against a defendant as long as the costs, does not exceed P100,000.00.
32. The plaintiff shall pay the prescribed fees upon filing, unless allowed to litigate as an indigent.
33. For the purposes of this rule: (a) Plaintiff is the party who has filed a small claims action. The term includes a defendant who has filed a counterclaim against a plaintiff, (b) Defendant is the party against whom the plaintiff has a filed a small claims action. The term includes a plaintiff against whom defendant has filed a claim, or a person who replies to the claim; (c) Person is an individual, corporation, partnership, limited liability partnership, association, or other entity; (d) Individual is natural person: (e) Motion means a party’s request, written or oral, to the court for an order or other action. It shall include an informal written request to the court, such as a letter; (f) Good cause means circumstances sufficient to justify the requested order or other action, as determined by the judge; and (g) Affidavit means a written statement or declaration of facts that are sworn or affirmed to be true.
34. The Court may dismiss the case outright on any of the grounds for dismissal of a civil actions provided by the Rules of the Civil Procedure. A defendant may challenges jurisdiction or venue or court location by including these defenses in his Response before appearing in the hearing, the court shall inquire into the facts sufficiently to determine whether jurisdiction and authority of the court over the action are proper, and shall make its determination accordingly.
35. No Motion to Dismiss shall be allowed except on the grounds under Section 13 thereof (See No. X below).
36. Should the defendant fail to file a response within the required period, the court shall render judgement as may be warranted by the facts alleged in the Statement of Claim and limited to what prayed for therein. The court may, in its discretion, reduce the amount of damages for being excessive or otherwise unconscionable.
37. If at the time the action is commenced, a defendant possesses a claim against the plaintiff that (a) is within the coverage of this Rule, exclusive of interest and costs; (b) arises out of the same transaction or event that is the subject matter of the plaintiff’s claim; (c) does not require, for its adjudication, the joiner or third parties; and (d) is not the subject of another pending action, this claim shall be included as a counterclaim in the Response, otherwise, such counterclaim shall be barred.
38. Prohibited pleadings and motions: (a) Motion to dismiss the complaint except on the ground of lack of jurisdiction; (b) Motion for bill of particulars; (c) Motion for new trial, or for reconsideration of a judgement, or for reopening of trial; (d) Petition for relief from judgement; (e) Motion for extension of time to file pleadings, affidavits, or any other paper; (f) Memoranda; (g) Petition for certiorari, mandamus, or prohibition against any interlocutory order issued by the court; (h) Motion to declare the defendant in default; (i) Dilatory motions for postponement; (j) Reply; (k) Third-party complaints; and (l) Interventions.
39. Availability of Forms for the Parties who shall be assisted by Clerk of Court.
40. The parties must personally appear at the hearing; if unable, then through a designated representative who must be duly authorized to enter into an amicable settlement.
41. Attorneys are not allowed at the hearing, except as plaintiff or defendant. However this does not preclude them from offerings their services in assisting the party to small claims case to prepare for the hearing or for other matters outside of the hearing. If the court determines that a party cannot properly present his/her claim of defense and needs assistance, the court may, in its discretion, allow another individual, who is not an attorney, to assist that party upon the latter’s consent.
42. By or against himself or herself;
43. By or against a partnership in which he or she is general partner and in which all the partners are attorneys; or
44. By or against a professional corporation of which he or she is an officer or director and of which all other officers and directors are attorneys.
45. Providing advice to a party to a small claims action, either before or after the commencement of the action; or
46. Submitting an affidavit as a witness for a party in order to state facts of which he or she has personal knowledge and about which he or she competent to do so.
47. Non-appearance of Parties. Failure of the plaintiff to appear shall be a cause for the dismissal of the complaint without prejudice. The defendant who appears shall be entitled to judgement on a permissive counterclaim.On the other hand failure of the defendant to appear shall have the same effect as failure to file a Response under Section 12 of this Rule. This is however shall not apply where one of two or more defendants sued under a common cause of action and who pleaded a common defense shall appear at the hearing.Failure of both parties to appear shall causes the dismissal with prejudice of both the claim and counterclaim.
48. A request for postponement of a hearing may be granted only upon proof of the physical inability of the party to appear before the court on that date and time. Every party may avail of only one (1) postponement.Explanatory Note: A Party may submit an oral or written request to postpone a hearing date for good cause, as follows:
    1. If the written request is writing, it may be made either by letter or on a form adopted or approved by the Supreme Court;
    2. The request shall be filed before the hearing date and accompanied by proof of physical inability, unless the court determines that the requesting party has good cause to file the request on the date of hearing itself: and
    3. If the court finds that the interest of justice would be served by postponing the hearing, the court shall do so and shall notify all parties by mail on the same day of the new hearing date, time and place.
    This section does not limit the inherent power of the court to order postponement of hearing in strictly appropriate circumstances. The postponement fee of One Hundred Pesos (or as provided in Rule 141, Revised Rules of Court, as amended on Legal Fees) shall be charged and collected before the filing of a request for postponement and rescheduling of a hearing date.
49. Judicial Dispute Resolution. At the hearing, the court shall exert all efforts to encourage the parties to resolve their dispute through mediation, conciliation, early neutral evaluating or any other mode of JDR. Any settlement or resolution of the dispute shall be reduced into writing, signed by the parties, and submitted to the court for approval.
50. If JDR fails and the parties agree in writing (Form 10-SCC) that the hearing of the case shall be presided over by the judge who conducted the JDR, the hearing shall so proceed in an informal and expeditious manner and terminated within one (1) day.
51. Decision. After the hearing, the court shall, on the same day, render its decision using the form provided. The decision shall immediately be entered by the Clerk of Court in the court docket for civil cases and a copy thereof served on the parties. The decision is final and unappealable.
52. Execution. If the decision is rendered in favor of the plaintiff, execution shall issue upon motion (Form 9-SCC).

Footnotes

¹ ” The People’s Court Examind: A Legal and Empricial Analysis of the Small Claims Court System, by Bruce Tucker and Monica Her, San Francisco Law Review, Winter 2003.

² en.wikipedia.org/wiki/small_claims_court.

³ ” Small Claims Hearings: The Interventionist Role Played District Judges” by John Baldwin, Civil Justice Quarterly, Sweet and Maxwell limited and Contributors, January 17, 1998.

⁴ See Note 2.

⁵ “The Singapore Small Claims Tribunals – Accessible Justice to the Community” by Chong Kah Wei, paper prepared for the 2nd Annual AIJA Tribunals Conference held in Sydney, Australia on 10 September 1999.

⁶ ” A Moral Renaissance For A Lasting Peace” Speech delivered by Senior Associate Justice Josue N. Bellosillo as Keynote Speaker of the 3rd Annual National Seminar-Convention of the Philippine trial Judges Lague, Inc. on the theme Championing Peace Through Justice, “held3-5 October 2002 at Prince Hotel, Baguio City.

⁷ “The Totality of Reforms for a transformed Judiciary” by Former Chief Justice Artemio V. Panganiban (ret), The Court Systems Journal, December 2005, p. 69

⁸ Action Program for Judicial Reform (APJR) 2001-2006 published by the Supreme Court in August 2001, p.6

⁹ Ibid.

¹⁰ Supplement to APJR, published by the Supreme Court in 2001 at p. 2-12.

¹¹ See Note 7 at p. 12

¹² See Note 9 at p. 2-15.

¹³ Memorandum For the Honorable Reynato S. Puno, Chief Justice of the Supreme Court, dated December 19, 2007, from Court Administrator Zenaida N. Elepaño , Re: Proposal to Establish a Pilot Project on Small Claims Courts in First Level Courts in the Philippines.

¹⁴ ” Justice, Peace and Development: The Role and Responsibility of Lawyers, “Article by Chief Justice Reynato S. Puno, The Court System s Journal, March 2006 Volume 11 No. 1, p. 26.

¹⁵ See Note3, 20-34 at Chapter 26.