Do you wish to collect money from someone who owes you but cannot afford to spend on heavy legal fees? Is your lessee not paying his rent but you do not want the hassle of a long court trial? Did you deliver products to your customer yet he did not pay you? Have you experienced not being paid for the services you rendered? Perhaps, a small claim action is right for you.
Please see below a simple Q & A on small claims cases in the Philippines.
1. What are small claims?
These are civil claims which are exclusively for the payment or reimbursement of a sum of money not exceeding P400,000.00 or P300,000.00, depending on the venue of the claim (as amended by OCA Circular No. 45-2019, effective 01 April 2019).
2. What are considered as small claim actions?
They are claims where the value of the claim does not exceed Four Hundred Thousand Pesos (P400,000.00) exclusive of interest and costs, for Metropolitan Trial Courts (MeTCs) Three Hundred Thousan Pesos (P300,000.00), exclusive of interest and costs, for Municipal Trial Courts (MTCs), Municipal Trial Courts in Cities (MTCCs), and Municipal Circuit Trial Courts (MCTCs):
(a) For money owned under any of the following:
a. Contract of Lease;
b. Contract of Loan;
c. Contract of Services;
d. Contract of Sale; or
e. Contract of Mortgage;
(b) For liquidated damages arising contracts;
(c) The enforcement of a barangay amicable settlement or arbitration award on a money claim.
3. Give me examples of small claims cases.
a. Case to collect money from a person who owes you money (debtor)
b. Case to collect unpaid rental payments from a lessee
c. Case to recover the deposit made for a lease after the expiration of the lease
d. Case to collect payment for commission
e. Case to collect payment for services rendered
f. Case to collect payment for goods or property sold and delivered
g. or reimbursement for property, deposit, or money loaned;
h. Purely civil action for payment of money covered by bounced or stopped check.
i. Case to enforce settlement agreements of money claims made before the barangay
4. What is the purpose of small claims?
The purpose of a small claims process is to provide a simpler and a more inexpensive and expeditious means of settling disputes involving purely money claims.
5. Where do I file my small claims case?
A small claims case is filed with the Metropolitan Trial Court, Municipal Trial Court in Cities, Municipal Trial Court and Municipal Circuit Trial Courts. Since this is a civil case, it must be filed in the city:
a. Where the Plaintiff (the person suing) resides; or
b. Where the Defendant (the person being sued) resides; or
c. If the Plaintiff is in the business of lending, banking and similar activities, in the city where the Defendant resides, if the Plaintiff has a branch in that city.
6. What is the procedure for small claims?
a. A small claims action is commenced by filing with the court an accomplished and verified Statement of Claim in duplicate, accompanied by a Certification of Non-Forum Shopping, Splitting a Cause of Action and Multiplicity of Suits 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.
b. The plaintiff shall pay the docket and other legal fees, unless allowed to litigate as an indigent.
c. The court examines the claim. It may dismiss the case outright if it finds grounds to justify the dismissal.
d. If no ground for dismissal is found, the court shall issue Summons on the day of receipt of the Statement of Claim, directing the defendant to submit a verified Response.
e. If the Defendant cannot be served with Summons, the court shall order the Plaintiff to cause the service of summons within thirty (30) days from Notice. Otherwise, the case shall be dismissed.
f. The court shall also issue a Notice 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.
g. 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.
h. The parties shall appear at the designated date of hearing personally or through a representative authorized under a Special Power of Attorney. However, a lawyer cannot appear to represent the party.
i. At the hearing, the judge shall exert efforts to bring the parties to an amicable settlement.
j. If the case is settled, the settlement shall be reduced into writing, signed by the parties and submitted to the court for approval
k. If no settlement is reached, the hearing shall so proceed in an informal and expeditious manner and terminated within the same day.
l. After the hearing, the court shall render its decision within twenty-four (24) hours from termination of the hearing. The decision shall immediately be entered by the Clerk of Court in the court docket and a copy thereof forthwith served on the parties.
7. Can the decision of the small claims court be appealed?
No. The decision shall be final, executory and unappealable.
8. Can lawyers appear in the hearing?
Lawyers are not allowed to appear in behalf of or represent a party.
9. Can a representative appear in the hearing?
Yes, provided that appearance by representative is for a valid cause and the representative must be a relative of the individual party and NOT a lawyer. Furthermore, the representative must be armed with a Special Power of Attorney.
10. I do not know how to make statements of claims and other legal documents. What can I do?
The Supreme Court has already made templated forms for the following:
a. Statement of Claim
b. Verification and Certification of Non-forum Shopping, Splitting a Cause of Action and Multiplicity of Suits
d. Plaintiff’s Return/ Manifestation
e. Motion to Plead as Indigent
f. Special Power of Attorney
g. Joint Motion for DIimissal
h. Motion for Approval of Compromise Agreement
i. Motion for Execution
These forms may be secured from the courts.
11. I want to know more about Small Claims Cases. What resource material can I read?
For more information on Small Claims Cases, you may read A.M. No. 08-8-7-SC or “The 2016 Revised Rules of Procedure for Small Claims Cases” issued by the Philippine Supreme Court.
Nicolas & De Vega Law Offices is a full service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 4706126, +632 4706130, +632 4016392 or e-mail us at [email protected]