Chapter XI

MISCELLANEOUS RULES

A. Small Claims Cases (Basic Features)

A.M. No. 08-8-7-SC (The Rules on Expedited Procedures in the First Level Courts)

 By virtue of "The Rule of Procedure for Small Claims Cases" took effect on October 1,
2008. On October 27, 2009, some amendments were introduced to the Rule. The
amendments took effect on November 3, 2009 following their publication in two
newspapers of general circulation. On February 1, 2016, the "The Revised Rules for
Small Claims Cases" took effect.

On August 7, 2018, further amendments were made to the Rule. OCA Circular No. 165-
2018 announced that an en banc resolution of the Supreme Court on July 10, 2018
increased the threshold amount of small claims from P200,000.00 to P300,000.00.

On March 21, 2019, OCA Circular No. 45-2019 announced that an en banc resolution of
the Supreme Court on February 26, 2019 increased the threshold amount of small
claims cases filed before the Metropolitan Trial Courts (MeTCs) from P300,000.00 pesos
to P400,000.00 and for the Municipal Trial Courts in Cities (MTCCs), Municipal Trial
(MTCs) and Municipal Circuit Trial Courts (MTCTs) to remain at P300,000.0).

To reflect the new amount for small claims cases, Secs. 2 and 8 of the 2016 revised
rules were amended. The amendment took effect on April 1, 2019, following its
publication in two (2) newspapers of general circulation. The resolution was published
in the Philippine Daily Inquirer and Manila Bulletin on March 15, 2019.

The initiative was to streamline and harmonize the rules of procedure for money
claims filed before all first level courts. As a result, money claims filed before the first
level courts outside Metro Manila are all covered by the Revised Rules of Procedure for
Small Claims Cases, whereas those filed before the Metropolitan Trial Courts are
considered either as small claims cases for claims of up to P300,000.00, or
proceeded under the Revised Rule on Summary Procedure, for claims above
P300,000.00 to P400,000.00.

As previously discussed, the Supreme Court, during its En banc deliberation on March
1, 2022, approved the procedural rules expediting criminal and civil actions filed
before the first level courts. This effectively amended the 1991 Revised Rule on
Summary Procedure and 2016 Revised Rules on Small Claims Cases.

Entitled Rules on Expedited Procedures in First Level Courts (A.M. No. 08-8-7-SC), the
same recalibrates, reconciles, and harmonizes the coverage of the Revised Rule on
Summary Procedure and Small Claims cases following the enactment of R.A. 11576,
which expanded the jurisdictional amount cognizable by the first level courts to
P2,000,000.00 for civil actions monetary claims.

The Rules increase the threshold amount of small claims cases to P1,000,000.00 and
no longer makes a distinction whether the claim is filed before the first level courts
within or outside Metro Manila. The claim or demand may be for money owed under
contracts of lease, loan and other credit accommodations, services, and sale of
personal property. The recovery of personal property is excluded, unless made subject
of a compromise agreement between the parties. Nevertheless, the enforcement of
barangay amicable settlement agreements and arbitration awards where the money
claim does not exceed P1,000,000.00 is likewise covered.

Page 1 of 19
Purpose/Objectives

1. The purpose of the rules for small claims is to provide an inexpensive and expeditious
means to settle disputes over small amounts.

The theory behind the small claims system is that ordinary litigation fails to bring
practical justice to the parties, when the disputed claim is small, because the time and
expense required by the ordinary litigation process is so disproportionate to the
amount involved that it discourages a just resolution of the dispute.

2. Specifically, the following are the objectives of the rules of procedure for small claims
cases:

a. To protect and advance the constitutional right of persons to a speedy

disposition of cases;
b. To provide a simplified and inexpensive procedure for the disposition of small
claims cases;
c. To introduce innovations and best practices for the benefit of the
underprivileged (Sec. 2, Rule IV, A.M. No. 08-8-7-SC).

Inapplicability of strict procedural rules

 The small claims process is designed to function quickly and informally. There are no
attorneys allowed, unless he is the plaintiff or defendant. There are no formal
pleadings filed and the strict legal rules on evidence do not apply. The small claims
court system is not a "typical inferior court."

 Parties are encouraged to file small claims court actions to resolve their minor disputes
as opposed to resorting to self-help or forcible means to seek their remedy
(Explanatory note to A.M. No. 08-8-7-SC, citing Pace v. Hillcrest Motor Co., 161 Cal.
Rptr. 663, 664 Ct. App. 1980).

Jurisdiction

1. Small claims cases are cognizable by the Metropolitan Trial Courts, (MeTCs), Municipal
Trial Courts in Cities (MTCCs), Municipal Trial Courts (MTCs) and Municipal Circuit Trial
Courts (MTCTs) where the value of the claim does not exceed P1,000,000.00, exclusive
of interest and cost (Sec. 1/2]. Rule I. A.M. No. 08-8-7-SC).

The claim must be purely civil in nature and is solely for payment or reimbursement
of a sum of money (Sec. 1, Rule IV, A.M. No. 08-8-7-SC).

2. To be covered by the Revised Rules on Small Claims Cases, the claim or demand
should be for money owed under any of the following:

(a) contract of lease:

(b) contract of loan and other credit accommodations;
(c) contract of services;
(d) 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.

The claim may also be for the enforcement of barangay amicable settlement
agreements and arbitration awards, where the money claim does not exceed 1

Page 2 of 19
 Million Pesos, provided that no execution has been enforced by the barangay within
six 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. 7160, otherwise known as
The Local Government Code of 1991. (Sec. 1[2], A.M. No. 08-8-7-SC). Bar 2014

The above enumeration is essentially the same under the 2016 Revised Rules on Small
Claims Cases except for the deletion of contract of mortgage considering that the
same is deemed covered under contract of loan as mere accessory contract thereto.
The claim allowed by the rules is one solely for the payment of money. Hence,
a claim for the delivery of a car, goods, or anything other than for the payment of
money falls outside the ambit of small claims cases. In the same vein, a suit cannot
be brought in a small claims court to compel a defendant to fix or replace damaged
goods.

A claim seeking for a judgment to compel the defendant to perform specific acts, like
the performance of services, pursuant to a contract, is also not covered by the rules on
small claims since such claim is not solely for the recovery of money. On the other
hand, a claim for monetary compensation for services rendered is covered by such
rules. A claim for the proceeds of an insurance contract, or the contract price resulting
from a sale can be brought in a small claims court.

The Rules on Expedited Procedures in the First Level Courts added a catch all phrase
"and other accredited accommodations" to clarify that the Rules cover transactions
that may not technically be considered as loans but are nonetheless part of the
banking business such as credit card debts.

For contracts of sale, the Rules limited the coverage of small claims to personal
property only. Contract of sale of real property is deliberately excluded because of
their complex nature and would usually involve other legal issues necessitating
professional legal advice and trial for its resolution. Hence, such contracts are removed
from the ambit of small claims where the parties are prohibited from being
represented or assisted by counsels.

The Rules removed liquidated damages arising from contracts from the coverage of
small claims since the same usually involves other legal issues such as validity, breach
and enforceability of contracts wherein the parties are required to be assisted by
counsel. Instead, liquidated damages arising from contracts may be covered under
summary procedure provided that the claim falls within the threshold amount.

Commencement of the claim; Statement of claims

1. A small claims case is not commenced by a complaint, as the initiatory pleading is

called in the Rules of Court. Instead, it is commenced by filling up and filing a form
called a Statement of Claim/s with Verification and Certification Against Forum
Shopping, Splitting a Single Cause of Action, and Multiplicity of Suits (Form I-SCC).

No formal pleading, other than the Statement of Claim/s described, is necessary to

initiate a small claims action. Instead of reserving the evidence for presentation during
the hearing, the plaintiff is required to attach duly certified photocopies of the
actionable document/s subject of the claim, affidavits of witnesses, and other
evidence to support the claim, with as many copies thereof as there are defendants.

2. Submitting every evidence together with the Statement of Claim is a mandatory

requirement. Evidence not attached shall not be allowed during the hearing. The way
for the plaintiff previously attached, is to show to the court that he has good cause for
Page 3 of 19
 the submission of additional evidence (Sec. 4, Rule IV, A.M. No. 08-8-7-SC).

The non-submission of the required affidavits will cause the immediate dismissal of the
claim (Sec. 7, Rule IV, A.M. No. 08-8-7-SC).

3. The affidavits attached to the Statement of Claim are required to state only facts
of direct personal knowledge of the affiant or facts based on authentic
records. Failure to follow this requirement will make the affidavits inadmissible and
result in their being expunged from the record (Sec. 7, Rule IV, A.M. No. 08-8-7-SC).

A violation of this requirement shall subject the party and the person who assisted the
party in the preparation of the affidavits, to appropriate disciplinary action (Sec. 7,
Rule IV, A.M. No. 08-8-7-SC).

Note: All documents attached to the Statement of Claim or Response that are required
to be certified, shall be certified by the signature of the plaintiff or defendant
concerned. Certification by a party is not needed for public or official documents (Sec.
26, Rule IV, A.M. No. 08-8-7-SC).

4. The rules do not prohibit joinder of causes of action.

Separate claims arising from distinct causes of action may be joined in a single
statement of claim provided the total amount claimed, exclusive of interest and costs,
does not exceed P1 million. (Sec. 6, Rule IV, A.M. No. 08-8-7-SC).

5. Upon the filing of the claim, the plaintiff shall pay the docket and other legal fees
prescribed under Rule 141 of the Rules of Court. Exemption from the payment of filing
fees shall be granted only by the Supreme Court.

If a case is dismissed without prejudice under Sec. 12(f) of this Rule, and is re-filed
within one year from notice of dismissal, the plaintiff shall pay a fixed amount of
P2,000 as filing fee, inclusive of the P1.000 fee for service of summons and processes
(Sec. 5, Rule IV, A.M. No. 08-8-7-SC).

Venue

 The Statement of Claim shall be filed in the place following the rules on venue in Rule
4, of the Rules of Court (Sec. 5, Rule IV, A.M. No. 08-8-7-SC).

This is because the Rules of Civil Procedure apply suppletorily to small claims cases
but only insofar as they are not inconsistent with A.M. No. 08-8-7-SC (Sec. 1, Rule II,
A.M. No. 08-8-7-SC).

 However, if the plaintiff is engaged in the business of lending, banking and similar
activities, and has branch within the municipality or city where the defendant resides
or is holding business, the Statement of Claim/s shall be filed in the court of the city or
municipality where the defendant resides or is holding business. If there are two or
more defendants, it shall be filed in the court of the city or municipality where any of
them resides or is holding business, at the option of the plaintiff. (Sec. 5, Rule IV, A.M.
No. 08-8-7-SC as amended).

Action of the court; dismissal

Page 4 of 19
 1. Upon receiving the Statement of Claim, the court shall determine first if the claim falls
under the Rules on Expedited Procedures in the First Level Courts, more particularly on
small claims.

If the court finds that the case falls under a summary or regular procedure, or if the
case is filed under summary or regular procedure but falls under this Rule, the case
shall not be dismissed.

Instead, the case shall be re-docketed under the appropriate procedure, and returned
to the court where it was assigned, subject to payment of any deficiency in the
applicable regular rate of filing fees. (Sec. 9, Rule IV, A.M. No. 08-8-7-SC).

This rule presupposes that the case filed is within the jurisdiction of the MTC. If the
case filed is beyond its jurisdiction because it is the RTC which should take cognizance
over the same, the case has to be dismissed for lack of jurisdiction.

After examining whether or not the case falls under a small claims, the court shall
examine the allegations in the Statement of Claims and the attached evidence. If it
finds a ground for dismissal in the allegations and the evidence, it shall do so outright
on any of the following grounds:

a. The court has no jurisdiction over the subject matter;

b. There is another action pending between the same parties for the same cause;
c. The action is barred by prior judgment;

d. The claim is barred by the statute of limitations;

e. The court has no jurisdiction over the person of the defendant;
f. Venue is improperly laid;
g. Plaintiff has no legal capacity to sue;

h. The statement of Claim/s states no cause of action;

i. That a condition precedent for filing the claim has not been complied with; and

j. Plaintiff failed to submit the required affidavits, as provided in Section 7 of the

Rules on Expedited Procedures in the First Level Courts.

No motion to dismiss is required prior to dismissal. The court, however, is

required to state if the dismissal is with or without prejudice. This prerogative of
the court to dismiss the case, by itself, may be exercised during the hearing
even if the ground is not pleaded in the defendant's Response (Sec. 9, Rule IV,
A.M. No. 08-8-7-SC).

Summons and Notice of Hearing

1. If the court finds no ground for dismissal, the court shall now issue the summons (Form
2-SCC) within 24 hours from receipt of the Statement of Claim/s.

The summons shall direct the defendant to submit a verified Response (Form 3-SCC).

In ordinary procedure, the Response is equivalent to the answer to the complaint. The
summons shall be accompanied by the Statement of Claim/s and all the documents
submitted by the plaintiff. It shall also be accompanied by a blank Response Form
(Form 3-SCC), to be accomplished by the defendant. (Sec. 10, Rule IV, A.M. No. 08-8-7-
SC).

Page 5 of 19
 The court shall issue a Notice of Hearing (Form 4-SCC) 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. A blank Special Power of Attorney
(Form 7-SCC) shall be attached to the Notice of Hearing.

The Notice of Hearing shall accompany the Summons and shall contain:
a. the date of the hearing, which shall not be more than 60 calendar days if one of
the defendants resides or holds business outside the judicial region

b. the express prohibition against the filing of a motion to dismiss or other

prohibited motions (Sec. 10, Rule IV, A.M. No. 08-8-7-SC).

Electronic Filing and Service

 The service of court issuances and filings by the plaintiff/s and defendant/s may be
made through email, facsimile, and other electronic means. Notices may also be
served through mobile phone calls, short messaging services (SMS), or instant
messaging (IM) software applications.
 The consent to, and chosen mode of, electronic service and notice shall be indicated in
the Statement of Claim/s or Response, as the case may be.

Response

1. Upon receiving the summons, may the defendant file a motion to dismiss?

The rule expressly prohibits the filing of a motion to dismiss or any motion under Sec.
2, Rule II of the Rules on Expedited Procedures in the First Level Courts.

The Notice of Hearing, in fact, contains an express prohibition against a motion to

dismiss (Sec. 10, Rule IV, A.M. No. 08-8-7-SC; See also Sec. 2[a], Rule II, A.M. No. 08-8-
7-SC).

Even a motion for bill of particulars is prohibited (Sec. 2[c], Rule II, A.M. No. 08-8-7-
SC).

2. The defendant shall file with the court and serve on the plaintiff a duly accomplished
verified Response (Form 3-SCC) within 10 calendar days from receipt of
summons.

This period is non-extendible. 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 (Sec. 13, A.M. No. 08-8-7-SC).

The Response may be accompanied by a counterclaim, compulsory or permissive, as

long as such claim is within the coverage of the small claims cases. If the counterclaim
does not arise out of the transaction or occurrence that is the subject matter of the
plaintiff's claim (permissive), the prescribed docket and other legal fees should first be
paid (Sec. 15, A.M. No. 08-8-7-SC).

Any amount pleaded in a counterclaim in excess of P1 million, excluding interests and

costs, shall be deemed waived.

Page 6 of 19
 3. If the Response is not filed and served within the required period, the plaintiff cannot
file a motion to declare the defendant in default. Such motion is prohibited under Sec.
2[i], Rule II of the Rules.

Hence, the defendant is not to be declared in default. Instead, the court shall render
judgment on the day set for hearing if the defendant also fails to appear on the day of
the hearing.

If the defendant does not file and serve his Response, but he appears on the date set
for hearing, the court shall ascertain his defenses and proceed to hear the case on the
same day as if a Response has been filed and, thereafter, render judgment within 24
hours from the termination of the hearing.

If the defendant relies on documentary evidence to support his defense, the court shall
order him/her to submit original copies of such documents within three calendar days
from the termination of the hearing and upon receipt thereof or expiration of the
period to file, the court shall render judgment within 24 hours. (Sec. 14, Rule IV, A.M.
No. 08-8-7-SC).

Hearing/Postponement

1. The parties are required to personally appear on the designated date for hearing.
Hence, as a rule, appearance through a representative is not allowed. Appearance
through a representative must only be for a valid cause.

Not anyone can be a representative. A lawyer cannot be designated by an

individual-party as a representative. Juridical entities are not also to be represented by
a lawyer in any capacity (Sec. 17, Rule IV, A.M. No. 08-8-7-SC).

The basic rule is that no attorney shall appear in behalf of or represent a party
at the hearing. The only exception is if the said attorney is the plaintiff or
defendant (Sec. 18, Rule IV, A.M. No. 08-8-7-SC).

The rules require a specific form for the appearance of a representative. He must be
authorized under a Special Power of Attorney (Form 7-SCC), board resolution or
secretary's certificate, as the case may be, authorizing him to enter into an amicable
settlement, stipulations and admissions of fact and of documentary exhibits (Sec. 17,
Rule IV, A.M. No. 08-8-7-SC).

2. The plaintiff has an obligation to appear on the date set for hearing.

His failure to appear shall be a cause for the dismissal of the Statement of Claim/s. The
dismissal shall be without prejudice. If the defendant appears in the absence of the
plaintiff, he shall be entitled to judgment on his permissive counterclaim, not on his
compulsory counterclaim (Sec. 19, Rule IV, A.M. No. 08-8-7-SC).

The failure of the defendant to appear on the date set for hearing shall have the same
effect as the failure to file a Response under Sec. 14 of the Rules. This effect 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 (Sec. 19, Rule IV,
A.M. No. 08-8-7-SC).

Page 7 of 19
 Failure of both parties to appear shall cause the dismissal of both the Statement of
Claim/s and the counterclaim (Sec. 19, Rule IV, A.M. No. 08-8-7-SC).

3. At the beginning of the court session, the judge shall read aloud a short statement
explaining the nature, purpose and the rule of procedure for small claims cases (Sec.
21. Rule IV. A.M. No. 08-8-7-SC).

During the hearing, the judge shall first exert efforts to bring the parties to an
amicable settlement of their dispute. Settlement discussions must be conducted in
strict confidentiality.

Any settlement or resolution of the dispute shall be reduced into writing, signed by the
parties, and immediately submitted to the court for approval at the hearing (Form 9-
SCC). The court shall render judgment based on the compromise agreement within 24
hours, and furnish copies thereof to the parties (Form 10-SCC).

If at any time before or at the hearing, a compromise agreement is submitted, signed

by both parties, but only one or neither party appears to confirm it, the court shall
issue an order directing the non-appearing party/ies to confirm the compromise
agreement within three calendar days from notice thereof; otherwise, it shall be
deemed confirmed.

If efforts at settlement fail, the court shall immediately proceed to hear the case in an
informal and expeditious manner and, thereafter, render judgment within 24 hours
from termination of the hearing. (Sec. 22, Rule IV, A.M. No. 08-8-7-SC).

4. The only ground for postponement allowed is the physical inability of a party to
appear. A party may avail of only one postponement (Sec. 20, Rule IV, A.M. No. 08-8-7-
SC).

Resort to alternative videoconferencing platform

 Should the hearing be done through videoconferencing, the court shall require the
parties to participate through the use of the Court-prescribed videoconferencing
platform.

However, if any of the participants communicates his or her difficulty in accessing or

using the said videoconferencing platform, the court may allow the use of alternative
videoconferencing platforms or instant messaging (IM) applications with video call
features, provided that the following conditions are met:

o (a) The court shall use either its official e-mail address or cell phone number to
access the alternative videoconferencing platform or instant messaging (IM)
application;

o (b) The parties shall use the e-mail address or cell phone number they indicated
in their Statement of Claim/s or Response, as the case may be, to access the
alternative videoconferencing platform or instant messaging (IM) application;
and

o (c) The court shall maintain record and transcription of the proceedings.

Decision/Execution
Page 8 of 19
 1. After the hearing, the court shall render its decision (Form 11-SCC) within 24
hours from termination of the hearing. The decision shall be final, executory and
unappealable. Hence, the decision shall immediately be entered by the Clerk of Court
in the court docket for civil cases and a copy thereof shall be served on the parties
(Sec. 24, Rule IV, A.M. No. 08-8-7-SC).

Despite the relative informality of the procedure, judgments are based upon a strict
application of the substantive law and an objective judicial analysis of the facts. The
judge is duty-bound to give the legal basis for the findings (Explanatory note to A.M.
No. 08-8-7-SC).

2. When the decision is rendered and proof of receipt thereof is on record, execution shall
issue (Forms 13-SCC, 13-A-SCC, or 13-B-SCC) upon ex parte motion (Form 12-SCC).

However, a decision based on compromise shall not be covered by the requirement of

proof of receipt (Sec. 25, Rule IV, A.Μ. No. 08-8-7-SC).

Appeal

 The decision of the court shall be final, executory and unappealable (Sec. 24,
Rule IV, A.M. No. 08-8-7-SC).

 The prohibition against appeals assures immediate justice. Sec. 36 of B.P. 129 allows
the Supreme Court to adopt special procedures to achieve an expeditious and
inexpensive determination of cases without regard to technical rules.

This authority necessarily includes disallowance of appeals in special cases.

Reminders

1. There are certain motions and pleadings normally allowed in ordinary civil actions
which are prohibited in small claims cases. The following are not allowed under
Sec. 16 of A.M. No. 08-8-7-SC:
a. In civil cases, a motion to dismiss the complaint or the statement of claim and
in criminal cases, a motion to quash the complaint or information, except on the
ground of lack of jurisdiction over the subject matter or failure to comply with
the requirement of barangay conciliation, pursuant to Chapter VII, Title I, Book
III of Republic Act No. 7160;

b. Motion to hear and/or resolve affirmative defenses;

c. Motion for bill of particulars;
d. Motion for new trial, or for reconsideration of a judgment, or for reopening of
trial;
e. Petition for relief from judgment;
f. Motion for extension of time to file pleadings, affidavits or any other paper;
g. Memoranda;
h. Petition for certiorari, mandamus, or prohibition against any interlocutory order
issued by the court;
i. Motion to declare the defendant in default;
j. Dilatory motions for postponement.

Any motion for postponement shall be presumed dilatory unless grounded on

acts of God force majeure, or physical inability of a counsel or witness to

Page 9 of 19
 personally appear in court, as supported by the requisite affidavit and medical
proof;
k. Rejoinder;
l. Third-party complaints;
m. Motion for Complaint in Intervention;
n. Motion to admit late judicial affidavit/s, position papers, or other evidence,
except on the ground of force majeure or acts of God;
o. Motion for judicial determination of probable cause in criminal cases.

2. 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 needs assistance, the court may, allow another
individual, who is not an attorney, to assist such party with the latter's consent (Sec.
18, Rule IV, A.M. No. 08-8-7-SC). Bar 2013

B. Basic Features of the Barangay Conciliation Proceedings

Basic Principles

1. The Revised Katarungang Pambarangay Law under Secs. 399-422 of R.A. 7160,
otherwise known as the Local Government Code of 1991, effective on January 1, 1992,
and which repealed P.D. 1508, introduced substantial changes not only in the authority
granted to the Lupong Tagapamayapa, but also in the procedure to be observed in the
settlement of disputes within the authority of the lupon.

2. The primordial aim of the Katarungang Pambarangay Law is to reduce the number of
court litigations and prevent the deterioration of the quality of justice which has been
brought about by the indiscriminate filing of cases in the courts (Zamora v. Heirs of
Izquierdo). Bar 1999

3. The barangay justice system was established primarily as a means of easing up the
congestion of cases in the judicial courts.

Originally embodied in P.D. 1508, it is now incorporated in the Local Government Code
of 1991 (Aquino v. Aure).

Proceedings before the barangay are not judicial proceedings

1. The proceedings before the Lupong Tagapamayapa, or the Pangkat ng

Tagapagkasundo of the barangay, are not judicial proceedings.

Legally, there is no barangay court. It is not mentioned in B.P. 129, as amended,

and other pertinent laws on jurisdiction, as one of the courts created by law.

2. The lupon and the pangkat do not have inherent adjudicatory powers. They resolve
disputes or attempt to do so through amicable settlement, conciliation, and arbitration
(See Secs. 410, 412, and 413, Local Government Code of 1991).

Any adjudicatory power exercised by any of these bodies must be agreed upon by the
parties in writing. Such agreement may involve their willingness to abide by any

Page 10 of 19
 arbitral award given by the lupon or the pangkat (See Secs. 411 and 413, Local
Government Code of 1991).

Importance of barangay conciliation proceedings (Bar 2012)

1. "Where the case is covered by the Katarungang Pambarangay Law, the compulsory
process of arbitration required therein is a pre-condition for filing a complaint in court.

Where the complaint

(a) did not state that it is one of the excepted cases, or

(b) it did not allege prior availment of said conciliation process, or

(c) did not have a certification that no conciliation or settlement had been reached by
the parties, the case should be dismissed x x x While the foregoing doctrine is handed
down in civil cases, it is submitted that the same should apply to criminal cases x x x"
(Agbayani v. CA).

The pertinent provision of the law reads:

"No complaint, petition, action, or proceeding involving any matter within the
authority of the lupon shall be filed or instituted directly in court or any other government
office for adjudication, unless there has been a confrontation between the parties before
the lupon chairman or the pangkat, and that no conciliation or settlement has been
reached as certified by the lupon secretary or pangkat secretary as attested to by the
lupon or pangkat chairman or unless the settlement has been repudiated" (Sec. 412, Local
Government Code of 1991; See also Zamora v. Heirs of Izquierdo).

2. Under Sec. 1(j) of Rule 16 of the Rules of Court, a motion to dismiss a civil
complaint may be filed if a condition precedent for the filing of the claim has not
been complied with.

Failure to undergo the barangay conciliation proceedings is non-compliance with a

condition precedent.

3. Administrative Circular No. 14-93 of the Supreme Court (July 15, 1993) provides:

"A case filed in court without compliance with prior Barangay conciliation, which is a
pre-condition for formal adjudication (Sec. 412 [a] of the Revised Katarungang
Pambarangay Law), may be dismissed upon motion of defendant/s, not for lack of
jurisdiction of the court but for insufficiency of the cause of action or prematurity
(Royales v. IAC, 127 SCRA 470; Gonzales v. CA, 151 SCRA 289), or the court may suspend
proceedings upon petition of any party x x x and refer the case motu proprio to the
appropriate Barangay authority applying by analogy Sec. 408 [g], 2nd par., of the
Revised Katarungang Pambarangay Law which reads as follows:

"The court in which non-criminal cases not falling within the authority of the Lupon
under this Code are filed may, at any time before trial, motu proprio refer the case to the
Lupon concerned for amicable settlement" (Italics ours).
4. The above circular was issued prior to the amendments of the Rules of Court and, so,
the ground for dismissal used was "insufficiency of the cause of action."

The proper ground to be invoked since July 1, 1997, the date when the amendment to

Page 11 of 19
 the Rules took effect, should be: "That a condition precedent for filing the claim has
not been complied with" (Sec. 1[j], Rule 16, Rules of Court).

No motu proprio dismissal

1. The court may not motu proprio dismiss a case on the ground of failure to comply with
the requirement of a barangay conciliation, the ground not being among those
mentioned for the dismissal of a complaint on the initiative of the court. Sec. 1 of Rule
9 of the Rules of Court provides only the following grounds for a motu proprio
dismissal:

a) The court has no jurisdiction over the subject

b) There is another cause of action pending between the same parties for the
same cause;
c) The action is barred by a prior judgment; and
d) The action is barred by the statute of limitations (Aquino v. Aure).

Rule in relation to cases covered by summary procedure

1. Under the Rules on Expedited Procedures in the First Level Courts, all cases requiring
prior referral to barangay conciliation must contain a statement of compliance
pursuant to Katarungang Pambarangay.

Where there is no showing of compliance with such requirement, the complaint shall
be dismissed without prejudice, on the court's own initiative or upon motion by the
defendant, and may be re-filed only after the requirement has been complied with
(Sec. 2, Rule III, A.M. No. 08-8-7-SC).

2. Under Sec. 2, Rule III of the same Rule, where the case is dismissed for non-
compliance with the conciliation proceedings, the dismissed case may be revived only
after such requirement shall have been complied with.

Non-compliance with conciliation proceedings is not jurisdictional

1. It is well-settled that the non-referral of a case for barangay conciliation, when so

required under the law, is not jurisdictional in nature and may, therefore, be deemed
waived if not raised seasonably in a motion to dismiss.

Hence, a party who does not raise the defect seasonably can no longer raise the
defense of non-compliance with the barangay conciliation proceedings to seek the
dismissal of the complaint (Spouses Santos v. Spouses Lumbao).

Note, however, that, under the Rules of Court, "Defenses and objections not pleaded
either in a motion to dismiss or in the answer are deemed waived" (Sec. 1, Rule 9,
Rules of Court).

Also, if no motion to dismiss has been filed, any of the grounds for dismissal provided
for in Rule 16 may be pleaded as affirmative defenses in the answer (Sec. 1, Rule 16,
Rules of Court).

2. The conciliation procedure is not a jurisdictional requirement in the sense that failure
to have prior recourse to it does not deprive a court of its jurisdiction, either over the
subject matter or over the person of the defendant.

Page 12 of 19
 Non-compliance with a condition precedent under said law does not prevent a court of
competent jurisdiction from exercising its power of adjudication over a case where
defendants fail to object to such exercise of jurisdiction. But such objection should be
seasonably made before the court first taking cognizance of the complaint (Junson v.
Martinez).

3. It is true that the precise technical effect of failure to comply with the requirement of
Sec. 412 of the Local Government Code on barangay conciliation (previously contained
in Sec. 5 of P.D. 1508) is much the same effect produced by non-exhaustion of
administrative remedies the complaint becomes afflicted with the vice of pre-maturity;
and the controversy there alleged is not ripe for judicial determination.

The complaint becomes vulnerable to a motion to dismiss.

Nevertheless, the conciliation process is not a jurisdictional requirement, so that

noncompliance therewith cannot affect the jurisdiction which the court has otherwise
acquired over the subject matter or over the person of the defendant (Librada M.
Aquino v. Ernest Aure).

Subject matters for settlement (Bar 2009)

1. Sec. 408 of the Local Government Code of 1991 establishes the general rule that "The
Lupon of each barangay shall have authority to bring together the parties actually
residing in the same city or municipality for amicable settlement of all disputes x x x"

2. Administrative Circular No. 14-93 of the Supreme Court dated July 15, 1993, the
provisions of which are primarily based on Sec. 408 of the Local Government Code of
1991. The circular, in substance, provides:

All disputes are subject to Barangay conciliation pursuant to the Revised Katarungang
Pambarangay Law and prior recourse thereto is a pre-condition before filing a
complaint in court or any government offices except in the following disputes:

1) Where one party is the government, or any sub-division or instrumentality thereof;

2) Where one party is a public officer or employee and the dispute relates to the
performance of his official functions;

3) Where the dispute involves real properties located in different cities or

municipalities, unless the parties thereto agree to submit their differences to
amicable settlement by an appropriate Lupon;

4) Any complaint by or against corporations, partnerships or juridical entities, since

only individuals shall be parties to barangay conciliation proceedings either as
complainants or respondents (Sec. 1, Rule VI, Katarungang Pambarangay Rules);

5) Disputes involving parties who actually reside in barangays of different cities or

municipalities, except where such barangay units adjoin each other and the parties
thereto agree to submit their differences to amicable settlement by an appropriate
Lupon;

Page 13 of 19
 6) Offenses for which the law prescribes a maximum penalty of imprisonment
exceeding one (1) year or a fine of over five thousand pesos (P5,000.00);

7) Offenses where there is no private offended party;

8) Disputes where urgent legal action is necessary to prevent injustice from being
committed or further continued, specifically the following:

a. Criminal cases where the accused is under police custody or detention (See
Sec. 412[b][1], Revised Katarungang Pambarangay Law);
b. Petitions for habeas corpus by a person illegally deprived of his rightful
custody over another or a person illegally deprived of or on acting in his
behalf;
c. Actions coupled with provisional remedies such as preliminary injunction,
attachment, delivery of personal property and support during the pendency
of the action; and
d. Actions which may be barred by the Statute of Limitations.

9) Any class of disputes which the President may determine in the interest of justice
or upon the recommendation of the Secretary of Justice;

10)Where the dispute arises from the Comprehensive Agrarian Reform Law (CARL)
(Secs. 46 and 47, R.A. 6657);

11)Labor disputes or controversies arising from employer-employee relations (Montoya

v. Escayo).

Art. 226, Labor Code, as amended, grants original and exclusive jurisdiction over
conciliation and mediation of disputes, grievances or problems to certain offices of
the Department of Labor and Employment;

12)Actions to annul judgment upon a compromise which may be filed directly in court

3. Sec. 412[b] of the Local Government Code of 1991 also enumerates the instances
where the parties may go directly to court without the need for undergoing the
barangay conciliation proceedings, namely:

a. Where the accused is under detention;

b. Where a person has otherwise been deprived of personal liberty calling for
habeas corpus proceedings;

c. Where actions are coupled with provisional remedies such as preliminary

injunction, attachment, delivery of personal property, and support pendente
lite; and
d. Where the action may otherwise be barred by the statute of limitations.

Note: The above instances have also been reiterated in Administrative Circular
No. 14-93 of the Supreme Court, dated July 15, 1993.

Page 14 of 19
 4. In an early case, the petitioner argued that he is a resident of the United States and
since he, not his attorney-in-fact, is the real party-in-interest, the lupon would have no
jurisdiction to pass upon the dispute involving the real property.

In dismissing the complaint for non-compliance with the barangay conciliation

requirement, the trial court ruled that since the attorney-in-fact of the petitioner and
the respondent reside in the same place, the controversy is subject to barangay
conciliation, the attorney-in-fact being deemed to be the real party in interest.

The Court, however, did not agree with the trial court. It ruled that the requirement of
actual residence pertains to the real party in interest and does not apply to the
attorney-in-fact as plaintiff. In sustaining the petitioner, the Court instructed:

"In fine, since the plaintiff-herein petitioner, the real party in interest, is not an actual
resident of the barangay where the defendant-herein respondent resides, the local
lupon has no jurisdiction over the dispute, hence, prior referral to it for conciliation is
not a pre-condition to its filing in court" (Pascual v. Pascual).

5. The fact that the petitioner and private respondent reside in the same municipality
does not justify compulsory conciliation where the other co-defendants reside in
barangays of different cities and municipalities (Candido v. Macapagal).

Thus, where one party resides in Roxas City, the other in Laguna and another in Pasig
City, the lupon has no jurisdiction over their dispute, and prior referral of the case for
barangay conciliation is not a precondition to its filing in court (Abagatnan v. Spouses
Clarito). Bar 2018

6. In sum, parties who do not actually reside in the same city or municipality or adjoining
barangays are not required to submit their dispute to the lupon as a precondition to
the filing of a complaint in court (Abagatnan v. Spouses Clarito). Bar 2018

7. Under Sec. 4(a) of P.D. 1508, referral of a dispute to the Barangay Lupon is required
only where the parties thereto are "individuals."

An "individual" means "a single human being as contrasted with a social group or
institution."

Obviously, the law applies only to cases involving natural persons, and not where any
of the parties is a juridical person such as a corporation, partnership, corporation sole,
testate or intestate, estate, etc.

The plaintiff in this case is a mere nominal party who is suing on behalf of the estate.
While it is true that Sec. 3,

Rule 3 of the Rules of Court allows the administrator of an estate to sue or be sued
without joining the party for whose benefit the action is presented or defended, it is
indisputable that the real party in interest is the intestate estate under administration.

Since the said estate is a juridical person plaintiff administrator may file the complaint
directly in court, without the same being coursed to the Barangay Lupon for arbitration
(Vda. de Borromeo v. Pogoy).

Venue

Page 15 of 19
 1. Sec. 409 of R.A. 7160 provides for the following rules on venue:

a. Disputes between persons actually residing in the same barangay shall be

brought for amicable settlement before the lupon of said barangay.
b. Those involving actual residents of different barangays within the same city or
municipality shall be brought in the barangay where the respondent or any of
the respondents actually resides, at the election of the complainant. Bar 2018
c. All disputes involving real property or any interest therein shall be brought in
the barangay where the real property or the larger portion thereof is situated.
d. Those arising at the workplace where the contending parties are employed or at
the institution where such parties are enrolled for study, shall be brought in the
barangay where such workplace or institution is located.

Objections to venue shall be raised in the mediation proceedings before the

punong barangay; otherwise, the same shall be deemed waived. Any legal
question which may confront the punong barangay in resolving objections to
venue herein referred to may be submitted to the Secretary of Justice, or his
duly designated representative, whose ruling thereon shall be binding."

Initiation of proceedings

1) Upon payment of the appropriate filing fee, any individual, who has a cause of action
against another individual, involving any matter within the authority of the Lupon may
complain, orally or in writing, to the chairman of the lupon (Sec. 410[a], R.A. 7160).

The chairman of the lupon is the Punong Barangay (Sec. 399, R.A. 7160). The fact that
the com-plaint was addressed to the barangay captain is of no moment because he is
the chairman of the Lupong Tagapamayapa.

2. Upon receipt of the complaint, the chairman shall summon the respondents within the
next working day to appear. If the chairman fails in his mediation efforts within 15 days
from the first meeting, he shall set a date to constitute the Pangkat ng
Tagapagkasundo (Sec. 410[b], R.A. 7160).

Personal appearance of parties

 The parties must appear in person in all Katarungang Pambarangay proceedings and
without the assistance of counsel or representatives, except for minors and
incompetents who may be assisted by their next-of-kin who are not lawyers (Sec.
415, R.A. 7160). Bar 1999

Parties to the proceedings

 Only individuals shall be parties to the proceedings either as complainants and

respondents. Hence, no complaint by or against corporations, partnerships or other
juridical entities shall be filed, received or acted upon

(Sec. 1, Rule VI, Katarungang Pambarangay Rules; Administrative Circular 14-93, July
15, 1993).

Form of settlement

 All amicable settlements shall be in writing, in a language or dialect known to the

parties, signed by them, and attested to by the lupon chairman or the pangkat
chairman, as the case may be. When the parties to the dispute do not use the same
Page 16 of 19
 language or dialect, the settlement shall be written in the language or dialect known to
them (Sec. 411, R.A. 7160).

Effect of amicable settlement and award; repudiation

1. The amicable settlement and arbitration award shall have the effect of a final
judgment of a court upon the expiration of 10 days from the date thereof, unless
repudiation of the settlement has been made or a petition to nullify the award has
been filed before the proper city or municipal court (Sec. 416, R.A. 7160).

Jurisprudence confirms that, "x x x [An] amicable settlement reached after barangay
conciliation proceedings has the force and effect of a final judgment of a court if not
repudiated or a petition to nullify the same is filed before the proper city or municipal
court within 10 days from its date" (Chavez v. CA).

2. The above provision shall not apply to court cases settled by the lupon under the last
paragraph of Sec. 408 of this Code; in which case, the compromise settlement agreed
upon by the parties before the lupon chairman or the pangkat chairman shall be
submitted to the court and, upon approval thereof, have the force and effect of a
judgment of said court (Sec. 416, Local Government Code of 1991).

The relevant provision of the last paragraph of Sec. 408 provides:

"The court in which non-criminal cases not falling within the authority of the lupon
under this Code are filed may, at any time before trial, motu proprio refer the case to
the lupon concerned for amicable settlement."

3. The Court appears not to favor referral of cases falling under summary procedure to
the lupon for amicable settlement because Sec. 10 of the Rules on Expedited
Procedures in the First Level Courts mandates a preliminary conference which is
precisely for the purpose of giving room for a possible amicable settlement.

In a case involving an unlawful detainer case, the Court explained:

"x x x While the last paragraph of the aforecited provision apparently gives the court
the discretion to refer the case to the lupon for amicable settlement although it may
not fall within the authority of the lupon, the referral of said subject civil case to the
lupon is saliently an unsound exercise of discretion, considering that the matter falls
under the Rule(s) on Summary Procedure.

The reason is that the Rules on Summary Procedure was promulgated for the purpose
of achieving "an expeditious and inexpensive determination of cases." The fact that
unlawful detainer cases fall under summary procedure, speedy resolution thereof is
thus deemed a matter of public policy. To do otherwise would ultimately defeat the
very essence of the creation of the Rules on Summary Procedure" (Diaz v. Gestopa, Jr).

Repudiation of the settlement

1. Any party to the dispute may, within 10 days from the date of the settlement,
repudiate the same by filing with the lupon chairman a statement to that effect, sworn
to before him, where the consent is vitiated by fraud, violence or intimidation. Such
repudiation shall be a sufficient basis for the issuance of the certification for filing a
complaint (Sec. 418, R.A. 7160;).

Page 17 of 19
 Failure to repudiate the settlement within the 10-day period shall be deemed a waiver
of the right to challenge the settlement on said grounds (Sec. 14, Rule VI, Katarungang
Pambarangay Rules).

2. "Generally, the rule is that where no repudiation was made during the 10-day period,
the amicable settlement attains the status of finality and it becomes the ministerial
duty of the court to implement and enforce it. However, such rule is not inflexible for it
admits of certain exceptions x x x" (Quiros v. Arjona).

In Quiros, the parties entered into two agreements for the conveyance of a parcel of
land, but on ocular inspection, the Municipal pal Trial Court found the that the land
inspected was different from the land intended to be conveyed because of the
disparity in the description of the property in the agreements.

While the Court conceded the validity of the written agreements, subject, however, to
its reformation, the Court concluded that no writ of execution could be issued for
failure to determine the land intended to be delivered.

Execution of award or settlement (Bar 2012)

1. The amicable settlement or arbitration award may be enforced by execution by the

lupon within six months from the date of the settlement.

After the lapse of such time, the settlement may be enforced by action in the
appropriate city or municipal court (Sec. 417, R.A. 7160; Chavez v. CA).

2. The timeline of six months, according to the Court, is for the benefit, not only of the
complainant, but also of the respondent. The plain words of the law mandate that the
period of six months should be computed from the date of settlement.

This period, however, declared the Court, cannot be strictly applied in certain cases.

The Court explained:

"x x x If applied to a particular case because of its peculiar circumstance, the

computation of the time line from the date of the settlement may be arbitrary and
unjust and contrary to the intent of the law.

To illustrate:

Under an amicable settlement made by the parties before the Lupon dated January 15,
2003, the respondents were obliged to vacate the subject property on or before
September 15, 2003. If the time line of six months under Section 417 were to be
strictly applied and literally followed, the complainant may enforce the settlement only
up to July 15, 2003. But under the settlement, the respondent was not obliged to
vacate the property on or before July 15, 2003;

hence, the settlement cannot as yet be enforced. The settlement could be enforced
only after September 15, 2003, when the respondent was obliged to vacate the
property.

Page 18 of 19
 By then, the six months under Section 417 shall have already elapsed. The
complainant can no longer enforce the settlement through the Lupon, but had to
enforce the same through an action in the MTC, in derogation of the objective of
Section 417 of the LGC.

The law should be construed and applied in such a way as to reflect the will of the
legislature x x x" (Vidal v. Escueta).

3. The enforcement by execution of the amicable settlement provided for under Sec. 417
of the Local Government Code, either under the first remedy (within six months from
settlement), or the second remedy (after six months from settlement), is only
applicable if the contracting parties have not repudiated such settlement within 10
days from the date thereof in accordance with Sec. 416 of the Local Government Code.

If the amicable settlement is repudiated by one party, either expressly or impliedly,

the other party has two options, namely, to enforce the compromise in accordance
with the Local Government Code or the Rules of Court as the case may be, or to
consider it rescinded and insist upon his original demand. This in accord with Art. 2041
of the Civil Code, viz.:

"If one of the parties fails or refuses to abide by the compromise, the other party may
either enforce the compromise or regard it as rescinded and insist upon the original
demand" (Miguel v. Montanez).

The Court further declared, in Miguel v. Montanez, that the language of Art. 2041 of
the Civil Code denotes that no action for rescission is required, and that the party
aggrieved by the breach of the compromise agreement, may, if he chooses, bring the
suit contemplated or involved in his original demand, as if there had never been any
compromise agreement (Miguel v. Montanez).

Page 19 of 19