Sometime in March 2017, my friend borrowed P200,000.00 from me. He told me that he wanted to put up a restaurant in Laguna. Since he was my childhood friend, I lent him the money. He promised, however, that he would return it after six months from receipt of the loan. We executed a written agreement stating the amount of money involved and the date of payment. Six months lapsed but he had not repaid me yet. I sought legal advice in order to recover the money. Unfortunately, the acceptance fee for lawyers would cost me so much already. Thus, the recovery of the loan would be futile because most of it will go to the lawyers’ acceptance fee. I would like to ask if there’s a way I can recover the borrowed money without securing the services of a lawyer. Can you enlighten me about the Rules on Small Claims?
Yes, there is a way to recover the money borrowed by your friend without securing the services of a lawyer.
Administrative Matter No. 08-8-7-SC or the 2016 Revised Rules of Procedure for Small-Claims Cases is a special rule of procedure adopted by the Supreme Court pursuant to its rule-making power under Sec. 5(5) of Article VIII of the 1987 Constitution to govern small-claims cases and is to be piloted in designated first level courts, i.e. Metropolitan Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts and Municipal Circuit Trial Courts. This rule allows a plaintiff (the party who initiates a small-claims action) to sue a defendant (the party against whom the plaintiff files a small-claims action) without the need of a lawyer.
Section 5(5) of Article VIII of the 1987 Constitution provides:
“Section 5. The Supreme Court shall have the following powers:
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice and procedure in all courts, the admission to the practice of law, the integrated bar and legal assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases, and shall be uniform for all courts of the same grade, and shall not diminish, increase or modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court; and xxx.”
The primordial purpose of the small-claims process is to provide a simpler and a more inexpensive and expeditious means of settling disputes involving purely money claims than the regular civil court processes. The whole process is inexpensive, informal and simple. Every aspect of the process is designed to allow a person to handle his/her own case from start to finish quickly and inexpensively. Moreover, the ready-made or pro-forma forms are available and strict procedural rules, including the rules of evidence, do not apply. Hence, there is no need for a lawyer.
Meanwhile, the 2016 Rules of Procedure for Small-Claims Cases 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 Two Hundred Thousand Pesos (P200,000.00) exclusive of interest and costs.
It may be emphasized that Section 4 thereof, provides that the Rules on Small Claims shall apply to actions, which are purely civil in nature where the claim or relief prayed for by the plaintiff, is solely for payment or reimbursement of sum of money, to wit:
“Section 4. Applicability – The Metropolitan Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts and Municipal Circuit Trial 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 action, or reserved upon the filing of the criminal action in court, pursuant to Rule of 111 of the Revised Rules of Criminal Procedure.
These claims or demands may be;
(a) For money owned under any of the following;
1. Contract of Lease;
2. Contract of Loan;
3. Contract of Services;
4. Contract of Sale; or
5. Contract of Mortgage;
xxx.” (Emphasis supplied)
Applying the foregoing, your case falls within the Rules considering that the contract you executed with your friend is a contract of loan, and the amount thereof is within the jurisdictional limit of Rules of Procedure on Small Claims.
On the other hand, with regard to your concern that in pursuing said claim against your friend, you are worried that you might actually pay so much in hiring a lawyer. The Rules on Small Claims specifically prohibits the appearance of a lawyer. Section 17 thereof particularly prohibited the appearance of an attorney in the hearing, to wit:
“Section 17. 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 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.”
With this, there is no need for you to worry about the acceptance fees that lawyers might get from you in pursuing the debt of your friend.
We find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated. We hope that we were able to enlighten you on the matter.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to email@example.com.