STUDENT: WAHIDA T.

ANGAS
SUBJECT: ALTERNATIVE DISPUTE RESOLUTION

1. Outline of Rules and Procedure in Small Claims Cases

Reference: A. M. No. 08-8-7-SC               February 1, 2016

THE REVISED RULES OF PROCEDURE FOR SMALL CLAIMS CASES

Small Claims Cases as defined in Rules on Expedited Procedures in the First Level
Courts, where the small claim does not exceed One Million Pesos ( Php 1,0 00, 000.00 )
exclusive of interest and cost.

A ‘small claim’ 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. It excludes
actions seeking other claims or reliefs aside from payment or reimbursement of a sum of
money and those coupled with provisional remedies.

1. Jurisdiction

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;

b) Where the Defendant (the person being sued) resides; and

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.

2. The claim or demand may be:

a) For money owed under any of the following:

1. Contract of Lease;

2. Contract of Loan and other credit accomodations;

3. Contract of Services; or

4. Contract of Sale of personal property, excluding the recovery of the personal property,
unless it is made the subject of a compromise agreement between the parties.

b) The enforcement of barangay amicable settlement agreement and arbitration awards, where
the money claim does not exceed One Million Pesos, (Php 1, 000,000.00), provided that no
execution has been enforced by the barangay within six (6) months from the date of the
settlement or date of receipt of the award or from the date the obligation stipulated or adjudged
in the arbitration award becomes due and demandable, pursuant to Section 417, Chapter VII of
R.A. No. 7160.
3. 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.

2. Digest the following cases:

1. A.L. Ang Network, Inc. vs Mondejar, G.R. No. 200804, Jan. 22, 2014

2. Okada vs Security Pacific Assurance Corporation, GR No. 164344, December 23, 2008

3. GMCC United Development Corporation vs Gotesco Regency Twin Towers Condominium Corp.,
G.R. No. 206137, 8 April 2015

1. A.L. Ang Network, Inc. v Mondejar, G.R. No. 200804, Jan. 22, 2014

Facts

Petitioner filed a complaint for sum of money under the Rule of Procedure for Small Claims
Cases before the MTCC, seeking to collect from respondent the amount of ₱23,111.71 which
represented her unpaid water bills for the period June 1, 2002 to September 30, 2005.

Aggrieved, petitioner filed a petition for certiorari under Rule 65 of the Rules of Court before the
RTC, ascribing grave abuse of discretion on the part of the MTCC in finding that it (petitioner)
failed to establish with certainty respondent’s obligation, and in not ordering the latter to pay the
full amount sought to be collected.

On November 23, 2011, the RTC issued a Decision dismissing the petition for certiorari, finding
that the said petition was only filed to circumvent the non-appealable nature of small claims
cases as provided under Section 23 of the Rule of Procedure on Small Claims Cases. To this
end, the RTC ruled that it cannot supplant the decision of the MTCC with another decision
directing respondent to pay petitioner a bigger sum than that which has been awarded.

Petitioner moved for reconsideration but was denied in an Order[24] dated February 16, 2012,
hence, the instant petition.

Issue

Whether or not the RTC erred in dismissing petitioner’s recourse under Rule 65 of the Rules of
Court assailing the propriety of the MTCC Decision in the subject small claims case.

Ruling

Yes, Considering the final nature of a small claims case decision under the above-stated rule,
the remedy of appeal is not allowed, and the prevailing party may, thus, immediately move for
its execution. Nevertheless, the proscription on appeals in small claims cases, similar to other
proceedings where appeal is not an available remedy, does not preclude the aggrieved party
from filing a petition for certiorari under Rule 65 of the Rules of Court.
 Verily, a petition for certiorari, unlike an appeal, is an original action  designed to correct
only errors of jurisdiction and not of judgment. Owing to its nature, it is therefore incumbent
upon petitioner to establish that jurisdictional errors tainted the MTCC Decision. The RTC, in
turn, could either grant or dismiss the petition based on an evaluation of whether or not the
MTCC gravely abused its discretion by capriciously, whimsically, or arbitrarily disregarding
evidence that is material to the controversy.

Considering that small claims cases are exclusively within the jurisdiction of the Metropolitan
Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts, and Municipal Circuit Trial
Courts, certiorari petitions assailing its dispositions should be filed before their corresponding
Regional Trial Courts. This petitioner complied with when it instituted its petition
for certiorari before the RTC which, as previously mentioned, has jurisdiction over the same. In
fine, the RTC erred in dismissing the said petition on the ground that it was an improper
remedy, and, as such, RTC Case No. 11-13833 must be reinstated and remanded thereto for
its proper disposition.

2. Okada vs Security Pacific Assurance Corporation, GR No. 164344, December 23, 2008

Facts

On January 14, 1999, petitioner Kenji Okada filed a complaint for illegal dismissal, payment of service
incentive leave, 13th month pay, damages, and attorney's fees against then Meiyu Technology
Corporation (Meiyu) before the Labor Arbiter.

The Labor Arbiter rendered judgment in favor of petitioner. Expectedly, Meiyu appealed the decision to
the National Labor Relations Commission (NLRC). It posted an appeal bond issued by Wellington
Insurance Co., Inc. in the amount equivalent to the monetary judgment.

On November 5, 1999, the NLRC reversed the decision of the Labor Arbiter, on the ground of
prescription. The NLRC resolved:

Article 291 of the Labor Code, as amended, provides:

"All money claims arising from employer-employee relations accruing during the effectivity
of this Code shall be filed within three (3) years from the time the cause of action accrued;
otherwise they shall be forever barred."

Aggrieved, petitioner moved for reconsideration of the NLRC judgment. In his motion for reconsideration,
petitioner averred that the appeal was not perfected because the bond posted by Meiyu was spurious. It
had no legal effect. Hence, the decision of the Labor Arbiter became final and executory.

Issue

Whether or not a petition for certiorari is the proper remedy.

Ruling

Yes, The extraordinary writ of certiorari is always available where there is no appeal or any
other plain, speedy and adequate remedy in the ordinary course of law. Petitioner argues that
the CA gravely erred in entertaining the petition for certiorari. Citing Salas v. Adil, 90 SCRA 121
(1979), petitioner posits that appeal was the proper and available remedy. Petitioner’s reliance
on Salas is misplaced. We note that Salas is not even a labor case. Further, the parties
in Salas were differently situated and all were original parties to the case. More than that, there
is nothing in Salas that supports petitioner’s claim that respondent SPAC should have appealed
the adverse Labor Arbiter Order to the NLRC and not to the CA via certiorari. Respondent
SPAC was not a party to the original action. It could not have appealed the order of the Arbiter
to the NLRC. Verily, respondent has no appeal nor any plain, speedy, and adequate remedy in
the ordinary course of law. In fine, a petition for certiorari is the best available remedy to protect
respondent’s rights. In a long line of cases, the Court has consistently ruled that “the
extraordinary writ of certiorari is always available where there is no appeal or any other plain,
speedy and adequate remedy in the ordinary course of law.”

3. GMCC United Development Corporation vs Gotesco Regency Twin Towers Condominium

Corp., G.R. No. 206137, 8 April 2015

Facts

Gotesco Regency Twin Towers Condominium Corporation (condominium corporation) filed a small
claims action against GMCC for failure to pay ''parking slot dues" in the total amount of P38,783 before
the Metropolitan Trial Court (MeTC) of ·Manila, Branch 15 on January 6, 2012.

In a conducted hearing, GMCC failed to appear despite due notice. Finding merit in the condominium
corporation's claim, and pursuant to Sections 12 and 18 of the Rules of Procedure for Small Claims
Cases.

On March 2, 2012, GMCC assailed the MeTC decision before the Regional Trial Court (RTC) of Manila,
Branch 3, via special civil action for certiorari under Rule 65 of the Rules of Court. Hence, RTC rendered
its Decision denying GMCC's petition for its failure to discharge the onus of proving that the MeTC acted
with grave abuse of discretion.

Later, GMCC exercised its right of redemption. Accordingly, and as certified by the condominium
corporation on February 25, 2014, GMCC has settled its liability and paid parking-dues for Parking Slot
No. 153 until January 2014. However, notwithstanding said payment, the condominium corporation
opposed GMCC's motion to withdraw. While it admits that there is already a satisfaction of the judgment
award, it however, posits that said payment only covers GMCC's obligations until February 2011.

Issue

Whether failure of a plaintiff to appear shall cause for the dismissal of the claim without prejudice.

Ruling

Yes. This is pursuant to Section 18 of the Rules of Procedure for Small Claims Cases, in relation to
Section 12 thereof. Section 18 reads:

SEC. 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.