Perhaps responding to the failure (or, better yet, the laziness and irresponsibility) of past Philippines Congresses to pass a Small Claims Court Law, the most prominent version of which was previously proposed by Former Senate President Franklin Drilon, the Philippine Supreme was constrained recently to issue the Rule of Procedure for Small Claims Cases (A.M. No. 08-8-7-SC), which took effect on October 1, 2008 (pilot courts). Let me digest its salient provisions, for legal research purposes of the visitors of this blog, considering its importance and impact to the speedy and inexpensive administration of justice, in general, and the low and middle-income and indigent litigants, in particular.
The new Rule governs 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.
The abovementioned 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 actions, either filed before 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 for money owed under a Contract of Lease; Contract of Loan; Contract of Services; Contract of Sale; or Contract of Mortgage.
The claims or demands may for damages arising from Fault or Negligence; Quasi-contract; or Contract.
The claims or demands may also be in the form of 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.
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 subject 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.
A 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 P100,000.00.
The affidavits 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 and the inadmissible affidavit(s) or portion(s) thereof shall be expunged from the record.
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.
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.
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.
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.
Should the defendant fail to file his Response within the required period, the court by itself shall render judgment 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.
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 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 other legal fees are paid.
The following pleadings, motions, or petitions shall not be allowed in the cases covered by this Rule:
(a) Motion to dismiss the complaint 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 judgment, or for reopening of trial;
(d) Petition for relief from judgment;
(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.
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 to Judicial Dispute Resolution (JDR) and to enter into stipulations or admissions of facts and of documentary exhibits.
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.
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 judgment on a permissive counterclaim.
Failure of the defendant to appear shall have the same effect as failure to file a Response.
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.
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.
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.
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).
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 a 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.
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.
If the decision is rendered in favor of the plaintiff, execution shall issue upon motion (Form 9-SCC).
The Rules of Civil Procedure shall apply suppletorily insofar as they are not inconsistent with this Rule.
The Rule took effect on October 1, 2008 for the pilot courts designated to apply the procedure for small claims cases following its publication in two newspapers of general circulation.
