Introduction to Civil Procedure Handout No.
4
Imagine:
Your customer owes you a huge amount of money. It is definitely not
the end of the world for your business!
Step 1. Send a demand letter.
Step 2. Check if the requirement of a prior referral to the Katarungang
Pambarangay applies.
Step 3. Check the applicability of the Rule on Small Claims.
SMALL NO MORE: Updates on Small Claims Cases
Why small no more?
• Previously, only those money claims not exceeding Php
200,000.00 could qualify as small claims actions. (2016 Revised
Rules of Summary Procedure)
• Recently, this threshold amount for “small” claims was
increased to Php 1,000,000.00. (Rules on Expedited Procedure
in the First Level Courts which took effect on 11 April 2022)
What is a “small claims” action?
A small claims action is an action that is purely civil in nature where
the claim or relief raised by the plaintiff is solely for the payment or
reimbursement of a sum of money. (Rule I, Section 1 (2), Rules on
Expedited Procedure in the First Level Courts)
Specifically,
a. For money owed under:
i. Contract of Lease
ii. Contract of Loan and other credit accommodations
iii. Contract of Services
iv. Contract of Sale of personal property excluding the recovery
of personal property, unless it is made the subject of a
compromise agreement between the parties
b. For enforcement of barangay settlements where the money claim
does not exceed Php 1M
Who are the parties to a small claims action?
plaintiff – the party who initiates a small claims action
defendant – the party against whom the plaintiff has filed a small
claims action
What court has jurisdiction over small claims actions?
The first level courts (Metropolitan Trial Courts, Municipal Trial Courts
in the Cities, Municipal Trial Court, Municipal Circuit Trial Courts)
Where to file your small claims action (Venue)?
General Rule: You may file either in the place of residence of the
plaintiff or of the defendant, at the election of the plaintiff. ((Rule IV,
Section 10, Rules on Expedited Procedure in the First Level Courts in
relation to Rule 4, Section 2, 2019 Amendments to the Rules of Civil
Procedure)
Exception: If the plaintiff is engaged in the business of lending,
banking or similar activities, and has a branch where the defendant
resides or holds business, the small claim should be filed in the city
or municipality where the defendant resides or holds business. (Rule
IV, Section 4, Rules on Expedited Procedure in the First Level Courts)
By the way, it is worthy to emphasize that:
Failure to declare in the Statement of Claim that the entity is so
engaged in lending, banking and similar businesses is a ground
for the dismissal of the small claims action with prejudice to
refiling. This can also be a ground for citation for direct
contempt.
How is a small claims action commenced?
It is commenced by filing a form called the “Statement of Claim” (Form
1-SCC) which must be verified.
What are the documents that should accompany the Statement
of Claim?
• Actionable document or the document on which you base your
claim for payment or reimbursement
• Attach also your demand letter and proof of receipt
• Affidavits of your witnesses, if any.
What if the plaintiff is a juridical entity (a corporation,
partnership, etc.), what other document should accompany the
Statement of Claim, if any?
Copy of the Board Resolution or Secretary’s Certificate authorizing
the person to file the claim must be attached to the Statement of
Claim.
Problem Solving:
Taguro is indebted to Eugene as evidenced by three separate
promissory notes with the following particulars:
a. Php 300,000.00 due on 31 January 2022;
b. Php 200,000.00 due on 28 February 2022; and
c. Php 300,000.00 due on 31 March 2022.
Can Eugene collect on all the three notes in one Statement of
Claim?
Answer: Yes. The 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 cost, does not exceed
Php 1M. (Rule IV, Section 6, Rules on Expedited Procedure in the First
Level Courts) Since the total amount of indebtedness of Taguro to
Eugene is only Php 800,000.00, Eugene can join all the three
indebtedness in a single Statement of Claim.
What happens next after the filing of the Statement of Claim?
Within 24 hours from receipt of the Statement of Claim, the court
shall forthwith issue Summons (Form 2-SCC) directing the defendant
to submit a Response (Form 3-SCC) as well as a Notice of Hearing.
(Rule IV, Section 10, Rules on Expedited Procedure in the First Level
Courts)
When should the hearing be scheduled?
The hearing should be scheduled within 30 calendar days or within
60 calendar days if the defendant resides outside the judicial region
also to be reckoned from the filing of the Statement of Claims. (Rule
IV, Section 10, Rules on Expedited Procedure in the First Level Courts)
What happens next after the service of summons?
The defendant should submit his Response (Form 3-SCC) within a
non-extendible period of 10 calendar days from receipt of Summons.
(Rule IV, Section 13, Rules on Expedited Procedure in the First Level
Courts)
What is the rule on appearance of parties?
As a general rule, the parties must appear personally during the
hearing. Appearance through a representative is allowed only for
valid reasons. In which case, the representative should be armed with
a Special Power of Attorney (Form 7-SCC). (Rule IV, Section 17, Rules
on Expedited Procedure in the First Level Courts)
Can a party be represented by a lawyer?
No. Lawyers are not allowed to appear in small claims actions unless
the lawyer is the plaintiff or the defendant himself/herself. (Rule IV,
Section 18, Rules on Expedited Procedure in the First Level Courts)
Can a party who has a valid reason for non-appearance be
represented by a lawyer?
Still no. The representative to be chosen should not be a lawyer. (Rule
IV, Section 18, Rules on Expedited Procedure in the First Level Courts)
What cannot be done directly should not be done indirectly.
What if the defendant does not file his Response within the
period allowed and also does not appear on the scheduled date
of hearing?
The court shall render judgment within 24 hours from termination of
the hearing. (Rule IV, Section 14, Rules on Expedited Procedure in the
First Level Courts)
What if the defendant does not file his Response within the said
period but appears on the scheduled date of hearing?
The court shall ascertain what defense he/she/it has to offer which
shall constitute his/her/its Response then proceed with hearing as
scheduled and render judgment within 24 hours from termination of
the hearing. (Rule IV, Section 14, Rules on Expedited Procedure in the
First Level Courts) If the defendant has documents to support his
defense, the court may allow him to submit the original copies thereof
within 3 calendar days from termination of hearing and proceed to
render judgment within 24 hours from receipt thereof.
What is the effect of non-appearance of the plaintiff during the
hearing?
The claim may be dismissed without prejudice to refiling. The
defendant who appears in the absence of the plaintiff shall be entitled
to judgment on his/her/its counterclaim, if any. (Rule IV, Section 19,
Rules on Expedited Procedure in the First Level Courts)
What is the effect of non-appearance of both parties during the
hearing?
Failure of both parties to appear shall be a cause for dismissal with
prejudice of both Statement of Claim and counterclaim. (Rule IV,
Section 19, Rules on Expedited Procedure in the First Level Courts)
What is the period to render decision?
Within 24 hours from the termination of hearing.
The court’s decision in small claims cases is final, executory and
unappealable.
