THE RULE ON SMALL CLAIMS

 

THE RULE ON SMALL CLAIMS

Section 1. Scope. - This Rule shall govern the procedure in actions before the Metropolitan Trial Courts (MeTCs) Municipal Trial Courts in Cities (MTCCs), Municipal Trial Courts (MTCs) and Municipal Circuit Trial Courts (MCTCs) for payment or reimbursement of a sum of money where the value of the claim does not exceed One Million Pesos (PI (0001000.00).

Sec. 2. Objectives. —

(a)        To protect and advance the constitutional right of persons to a speedy disposition of their cases;

(b)        To provide a simplified and inexpensive procedure for the disposition of small claims cases; and

(c)        To introduce innovations and best practices for the benefit of the underprivileged.

Sec. 3. Definition 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 a plaintiff;

(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;

 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;

 Affidavit means a written statement or declaration of facts that are sworn to or affirmed to be true;

(h)       Business of Lending refers to any lending activity pursued with regularity;

(i)         Business of Banking refers to the business of lending funds obtained in the form of deposits.

Sec. 4. Commencement of Small Claims Action. - A small claims action is commenced by filing with the court an accomplished Statement of Claim/ s with Verification and Certification Against Forum Shopping, Splitting a Single Cause of Action, and   (Form I-SCC) and duly certified photocopies of the actionable document/ s subject of the claim, affidavits of witnesses, and other evidence to support the claim, with as many copies thereof as there are defendants. No evidence shall be allowed during the hearing which was not attached to or submitted together with the Statement of Claim/ s, unless good cause is shown for the admission of additional evidence.

The plaintiff must state in the Statement of Claim/ s if he/she/it is engaged in the business of lending, banking and similar activities, and the number of small claims cases filed within the calendar year regardless of judicial station.

For juridical entities, a board resolution or secretary's certificate authorizing the person to file the claim must be attached to the Statement of Claim/s. l

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

Sec. 5. Venue for Small Claims Cases. — The regular rules on venue shall apply.

However, if the plaintiff is engaged in the business of lending, banking and similar activities, and has a branch within the municipality or city where the defendant resides or is holding business, the Statement of Claim/ s shall be filed in the court of the city or municipality where the defendant resides or is holding business. If there are two (2) or more defendants, it shall be filed in the court of the city or municipality where any of them resides or is holding business, at the option of the plaintiff.

Sec. 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 One Million Pesos (P1, 000.000.00).

Sec. 7. Affidavits. — The affidavits submitted under this Rule shall state only facts of direct personal knowledge of the affiants or based on authentic records, 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.

The non-submission of the required affidavits will cause the immediate dismissal of the claim or counterclaim.

Sec. 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. Exemption from the payment of filing fees shall be granted only by the Supreme Court.

However, if more than five (5) small claims are filed by one party within the calendar year, regardless of the judicial station, an additional filing fee of Five Hundred Pesos (12500.00) shall be paid for every claim filed after the fifth (5th) claim, and an additional One Hundred Pesos Per Resolution dated March 15, 2022, A.M. No. 08-8-7-SC or a total of Six Hundred Pesos (12600.00) for every claim filed after the tenth (10th) claim, and another One Hundred Pesos (PIOO.OO) or a total of Seven Hundred Pesos (P700) for every claim filed after the fifteenth (15th) claim, progressively and cumulatively.

If a case is dismissed without prejudice under Sec. 12 (f) of this Rule, and is re-filed within one (1) year from notice of dismissal, the plaintiff shall pay a fixed amount of Two Thousand Pesos   as filing fee, inclusive of the One Thousand Peso (PI fee for service of summons and processes.

If the plaintiff is engaged in the business of lending, banking, and similar activities, the amount of filing and other legal fees shall be the same as those applicable to cases filed under the regular rules of procedure.

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. 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) calendar 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 One Thousand Peso (PI ,000.00) fee for service of summons and processes.

Sec. 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/ s and such evidence attached thereto, on its own initiative, dismiss the case outright on any of the following grounds:

(a)The court has no jurisdiction over the subject matter;

(b) There is another action pending between the same parties for the same cause•

(c) The action is barred by prior judgment;

 (d)The claim is barred by the statute of limitations-

(e) The court has no jurisdiction over the person of the defendant;

(f) Venue is improperly laid;

(g) Plaintiff has no legal capacity to sue;

(h) The Statement of Claim/ s states no cause of action;

(j) That a condition precedent for filing the claim has not been complied with and

(j) Plaintiff failed to submit the required affidavits as provided in Section 7 of this Rule.

The order of dismissal shall state if it is with or without prejudice.

If, during the hearing, the court is able to determine that there exists a ground for dismissal of the Statement of Claim/ s, the court’s own initiative dismiss the case even if such ground is not pleaded in the defendant's Response (Form 3-SCC).

If plaintiff misrepresents that he/ she/ it is not engaged in the business of lending, banking, or similar activities when in fact he/ she/ it is so engaged, the Statement of Claim/s shall be dismissed with prejudice and plaintiff shall be meted the appropriate sanctions, including citation for direct contempt.

However, if the case does not fall under this Rule, but falls under summary or regular procedure, or if the case is filed under summary or regular procedure but falls under this Rule, the case shall not be dismissed. Instead, the case shall be re-docketed under the appropriate procedure, and returned to the court where it was assigned, subject to payment of any deficiency in the applicable regular rate of filing fees.

Sec. 10. Summons and Notice of Hearing. - If no ground for dismissal is found, the court shall forthwith issue Summons (Form 2-SCC) within twenty-four (24) hours from receipt of the Statement of Claim/ s, directing the defendant to submit a verified Response.

The Summons to be served on the defendant shall be accompanied by a copy of the Statement of Claim/ s and documents submitted by plaintiff, and a blank Response Form (Form 3-SCC) to be accomplished by the defendant.

The court shall also issue a Notice of Hearing (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 20 of this Rule. A blank Special Power of Attorney (Form 7-SCC) shall be attached to the Notice of Hearing.

The Notice of Hearing shall accompany the Summons and shall contain: (a) the date of the hearing, which shall not be more than thirty (30) calendar days from the filing of the Statement of Claim/ s, or not more than sixty (60) calendar days if one of the defendants resides or holds business outside the judicial region; and (b) the express prohibition against the filing of a motion to dismiss or other prohibited motions under Section 2 Rule 11.

Sec. 11. Electronic Filing and Service. - The service of court issuances and filings by the plaintiff/ s and defendant/s may be made through email, facsimile, and other electronic means. Notices may also be served through mobile phone calls, short messaging service (SMS), or instant messaging (1M) software applications. The consent to, and chosen mode of, electronic service and notice shall be indicated in the Statement of Claim/ s or Response, as the case may be.

Sec. 12. Service of Summons. —

(a)        The Summons and Notice of Hearing must be issued within twenty-four (24) hours from receipt of the Statement of Claim/ s.

The Summons, together with the Notice of Hearing, shall be served by the sheriff, his or her deputy, or other proper court officer within ten (10) calendar days from issuance. Within five calendar (5) days from such service, the Officer's Return shall be filed with the court with a copy furnished to the plaintiff at the given address/ es of record.

(b)        If Summons is returned without being served on any or all of the defendants, the court shall order the plaintiff or his or her representative to serve or cause the service of Summons.

(c)        In cases where Summons is to be sewed outside the judicial region of the court where the case is pending, the court may order the plaintiff or his or her representative to serve or cause the service of Summons.

(d)       If the plaintiff is a juridical entity, it shall notify the court, in writing, and name its authorized representative therein, attaching a board resolution or secretary's certificate thereto, as the case may bet stating that such representative is duly authorized to serve the Summons on behalf of the plaintiff.

(e)        If the plaintiff misrepresents that the defendant was served with Summons, and it is later proved that no Summons was served, the case shall be dismissed with prejudice, the proceedings shall be nullified, and the plaintiff shall be declared in indirect contempt under Rule 71 of the Rules of Court, and/or be meted a fine in the amount of P5, 000.00.

(f)        In both instances under paragraphs (b) and the plaintiff shall inform the court within thirty (30) calendar days from notice if said Summons was served; otherwise, the Statement of Claim/ s shall be dismissed without prejudice as to those who were not served with Summons. This is not a ground to archive the case. The case, however, may be re-filed within one year from notice of dismissal, subject to payment of reduced filing fees under Section 8 hereof.

Sec. 13. Response. — The defendant shall file with the court and serve on the plaintiff a duly accomplished and verified Response (Form 3-SCC) within a non-extendible period of ten (10) calendar 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.

Sec. 14. Effect of Failure to File Response. - Should the defendant fail to file his/her/ its Response within the required period, and likewise fail to appear on the date set for hearing, the court shall render judgment within twenty-four (24) hours from the termination of the hearing, as may be warranted by the facts alleged in the Statement of Claim/ s and its attachments.

Should the defendant fail to file his/her/ its Response within the required period but appear on the date set for hearing, the court shall ascertain what defense he/ she/ it has to offer, which shall constitute his/her/ its Response, proceed to hear the case on the same day as if a Response has been filed and, thereafter, render judgment within twenty-four (24) hours from the termination of the hearing. If the defendant relies on documentary evidence to support his defense, the court shall order him/her/ it to submit original copies of such documents within three (3) calendar days from the termination of the hearing and, upon receipt thereof or expiration of the period to file, the court shall render judgment within twenty four (24) hours.

Sec. 15. 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 suing on such 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.

Any amount pleaded in a counterclaim in excess of One Million Pesos (PI   excluding interests and costs, shall be deemed waived.

Sec. 16. Availability of Forms; Assistance by Court Personnel. — The Clerk of Court or other court 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.

Plaintiff shall be given copies of Forms I-SCC (Statement of Claim/ s), I-A-SCC (Other Plaintiffs or Defendants) for additional plaintiffs or defendants, if any, and I-B-SCC (Plaintiff's Information Sheet).

The Branch Clerk of Court must ensure that there should be at least one (1) hearing day every week devoted to Small Claims, with a minimum of five (5) cases scheduled per hearing day. Cases with the same party-plaintiff may all be set on the same date for facility in the preparation of notices and judgments. The Court should post a notice of its Small Claims hearing day conspicuously at the Branch and at the Office of the Clerk of Court.

Sec. 17. Appearance. — The parties shall personally appear on the designated date of hearing.

Appearance through a representative must be for a valid cause. The representative of an individual-party must not be a lawyer. Juridical entities shall not be represented by a lawyer in any capacity.

The representative must be authorized under a Special Power of Attorney (Form 7-SCC), board resolution or secretary's certificate, as the case may be, to enter into an amicable settlement of the dispute and to enter into stipulations or admissions of facts and of documentary exhibits.

Sec. 18. 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/ its 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.

Sec. 19. Non-appearance of parties. — Failure of the plaintiff to appear shall be cause for the dismissal of the Statement of Claim/ s without prejudice. The defendant who appears in the absence of the plaintiff shall be entitled to judgment on the counterclaim.

Failure of the defendant to appear shall have the same effect as failure to file a Response under Section 14 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 Statement of Claim/ s and the counterclaim.

Sec. 20. 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.

Sec. 21. 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.

Sec. 22. Hearing. — At the hearing, the judge shall first exert efforts to bring the parties to an amicable settlement of their dispute. Settlement discussions must be conducted in strict confidentiality.

Any settlement or resolution of the dispute shall be reduced into writing, signed by the parties, and immediately submitted to the court for approval at the hearing (Form 9-SCC). The court shall render judgment based on the compromise agreement within twenty-four (24) hours, and furnish copies thereof to the parties (Form 10-SCC).

If at any time before or at the hearing, a compromise agreement is submitted, signed by both parties, but only one (1) or neither party appears to confirm it, the court shall issue an order directing the non-appearing party lies to confirm the compromise agreement within three (3) calendar days from notice thereof; otherwise, it shall be deemed confirmed.

If efforts at settlement fail, the court shall immediately proceed to hear the case in an informal and expeditious manner and, thereafter, render judgment within twenty-four (24) hours from termination of the hearing.

Sec. 23. Resort to alternative videoconferencing platform. - Should the hearing be done through videoconferencing, the court shall require the parties to participate through the use of the Court-prescribed videoconferencing platform. However, if any of the participants communicates his or her difficulty in accessing or using the said videoconferencing platform, the court may allow the use of alternative videoconferencing platforms or instant messaging (1M) applications with video call features, provided that the following conditions are met:

 (a) The court shall use either its official e-mail address or cell phone number to access the alternative videoconferencing platform or instant messaging (1M) application;

(b) The parties shall use the e-mail address or cell phone number they indicated in their Statement of Claim/ s or Response, as the case may be, to access the alternative videoconferencing platform or instant messaging (1M) application; and

 (c) The court shall maintain a record and transcription of the proceedings.

Sec. 24. Decision. - After the hearing, the court shall render its decision based on the facts established by the evidence, within twenty-four (24) hours from termination of the hearing (Form Il-SCC). The refund of the remaining balance from the Sheriff's Trust Fund (STF), subject to accounting and auditing procedures, shall be included in the decision.