Dear PAO,

My neighbor borrowed a considerable amount of money from me. When he failed to pay, I sought the assistance of our barangay captain to settle the matter. Unfortunately, my neighbor still failed to pay me. I shared my problem with an officemate who told me that my case is covered by a rule called "Small Claims." May I know what that rule is and what it covers? Does it include the enforcement of a barangay amicable settlement?


Dear Ramon,

In the exercise of its constitutional power to issue rules concerning pleading, practice, and procedure in all courts, among others, the Supreme Court issued the Rules on Small Claims way back in 2008 in order to simplify and expedite proceedings involving minimal money claims. Over the years, the rule was refined and revised in order to keep up with the changing social and economic conditions. At present, the matter is governed by AM 08-8-7-SC, otherwise known as the "Rule on Expedited Procedures in the First Level Courts," dated March 1, 2022. Succinctly, Rule 1, Section 1 of the aforementioned rule reads:

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"A. Civil Cases

"x x x

"(2) Small Claims Cases, as defined hereunder, where the claim does not exceed One Million Pesos (P1,000,000.00), exclusive of interest and costs.

"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.

"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 accommodations;

"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 agreements and arbitration awards, where the money claim does not exceed One Million Pesos (P1,000,000.00), 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 Republic Act No. 7160, otherwise known as The Local Government Code of 1991." (Emphasis and Underscoring Supplied)

A reading of the cited rule dictates that small claims cases are suits where the plaintiff merely claims or demands payment for money owed under a contract of lease, loan and other credit accommodations, services, or sale of personal property, where the amount does not exceed P1,000,000. It also covers cases involving the enforcement of barangay amicable settlement agreements and arbitration awards, where the money claim does not exceed P1,000,000, which was not executed by the Lupon within six months from the maturity of the obligation.

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Editor's note: Dear PAO is a daily column of the Public Attorney's Office. Questions for Chief Acosta may be sent to [email protected]