Introduction

In the Philippine judicial system, small claims cases provide an accessible, expedited mechanism for resolving minor monetary disputes without the need for formal legal representation. Governed primarily by the Revised Rules of Procedure for Small Claims Cases (A.M. No. 08-8-7-SC, as amended), these proceedings are designed to be simple, inexpensive, and swift, focusing on claims for money owed under contracts, torts, or quasi-contracts where the principal amount does not exceed PHP 400,000 (exclusive of interest, damages, attorney's fees, litigation expenses, and costs). This threshold was last adjusted in 2019 to promote efficiency in handling low-value disputes.

Defending against a small claims case requires understanding the procedural framework, available defenses, and strategic approaches to protect one's rights. Unlike regular civil cases, small claims prohibit the participation of lawyers during hearings, emphasizing self-representation. This article explores the entirety of the defense process, from initial receipt of the complaint to post-judgment remedies, within the Philippine legal context. It draws on key provisions from the Rules of Court, jurisprudence from the Supreme Court, and practical considerations for litigants.

Jurisdiction and Scope of Small Claims Courts

Small claims courts fall under the jurisdiction of Metropolitan Trial Courts (MeTCs), Municipal Trial Courts in Cities (MTCCs), Municipal Trial Courts (MTCs), and Municipal Circuit Trial Courts (MCTCs). These courts handle exclusively money claims arising from:

Contracts (e.g., unpaid loans, services rendered, or goods sold).
Torts (e.g., property damage or personal injury resulting in monetary loss).
Quasi-contracts (e.g., unjust enrichment).

Claims exceeding PHP 400,000 must be filed as regular civil actions. Importantly, small claims exclude actions for ejectment, probate, or those involving title to real property. If a case is improperly filed as a small claim, a defendant may raise a motion to dismiss on grounds of lack of jurisdiction, which the court must resolve before proceeding.

Defendants should first verify if the claim qualifies as a small claim. For instance, if the demand includes non-monetary relief like specific performance, the case may be dismissed or reclassified.

The Initiation of a Small Claims Case and Initial Defense Steps

A small claims case begins when the plaintiff files a verified Statement of Claim with the appropriate court, accompanied by supporting documents and a certification of non-forum shopping. The court issues a summons, which is served on the defendant along with the complaint, typically within a short period.

Upon receipt of the summons:

Review the Documents Thoroughly: Examine the Statement of Claim for accuracy. Check for errors in the amount claimed, the facts alleged, or procedural compliance. Any defects, such as an unverified complaint or lack of certification, can form the basis for a motion to dismiss.
File a Response: The defendant must file a verified Response within 10 days from receipt of the summons. This is non-extendible. The Response should include:
- Admissions or denials of the allegations.
- Any counterclaims (limited to the small claims threshold).
- Supporting evidence, such as receipts, contracts, or affidavits.
- A certification against forum shopping.
Failure to file a Response results in default, allowing the court to render judgment based solely on the plaintiff's evidence. However, courts may set aside defaults for excusable neglect, fraud, or lack of due process under Rule 9 of the Rules of Court.
Permissive Counterclaims: Defendants can assert counterclaims in the Response, but these must be within the jurisdictional amount and arise from the same transaction. Compulsory counterclaims not raised are barred forever under the doctrine of res judicata.

Available Defenses in Small Claims Proceedings

Defenses in small claims are substantive or procedural, aimed at defeating the claim or delaying proceedings. Since the process is summary, defenses must be raised early in the Response or at the hearing.

Procedural Defenses

Lack of Jurisdiction: Argue that the amount exceeds PHP 400,000, the claim is not purely monetary, or venue is improper (e.g., not the residence of the plaintiff or defendant).
Improper Service of Summons: If service was defective (e.g., not personally served or substituted without justification), this can lead to dismissal for lack of jurisdiction over the person.
Prescription or Statute of Limitations: Claims must be filed within the prescriptive periods under the Civil Code (e.g., 10 years for written contracts, 6 years for oral contracts, 4 years for torts). If time-barred, the defense extinguishes the claim.
Litis Pendencia or Res Judicata: If the same claim is pending elsewhere or has been previously decided.
Forum Shopping: If the plaintiff has filed multiple suits for the same cause.

Substantive Defenses

Payment or Satisfaction: Prove the obligation has been fulfilled, using receipts, bank records, or witnesses.
Novation, Compensation, or Confusion: Argue that the debt was extinguished by agreement (novation), set-off (compensation), or merger of debtor-creditor roles (confusion).
Fraud, Mistake, or Undue Influence: Challenge the validity of the underlying transaction under Articles 1330-1390 of the Civil Code.
Illegality of Contract: If the agreement violates law or public policy (e.g., usurious interest rates exceeding Central Bank limits).
Lack of Cause or Consideration: Assert no valid obligation exists due to absence of cause.
Force Majeure or Fortuitous Events: For contract-based claims, argue impossibility due to unforeseen events (Article 1174, Civil Code).
Estoppel or Waiver: Claim the plaintiff is barred by their own actions or representations.

In jurisprudence, such as in Sps. Leyson v. Bontuyan (G.R. No. 156357, 2004), courts emphasize that defenses must be supported by evidence, as small claims rely on affidavits and documents rather than full trials.

The Hearing Process and Presentation of Defense

The court schedules a hearing within 30 days from the Response or expiration of the filing period. Hearings are informal, lasting no more than one day unless extended for just cause.

Preparation: Organize evidence chronologically. Practice articulating defenses clearly, as no lawyers are allowed (except for juridical entities represented by authorized personnel).
At the Hearing:
- The judge explains the rules and encourages amicable settlement.
- If no settlement, parties present positions: plaintiff first, then defendant.
- Cross-examination is limited; the judge primarily questions parties.
- Submit Judicial Affidavits in lieu of direct testimony to expedite.

Defendants should focus on discrediting the plaintiff's evidence through inconsistencies or counter-evidence. If the plaintiff fails to appear, the case may be dismissed; if the defendant absents, judgment may be rendered in favor of the plaintiff.

Post-hearing, the court renders judgment within 24 hours, though in practice, it may take longer.

Post-Judgment Remedies for the Defendant

If judgment is against the defendant:

Motion for New Trial or Reconsideration: File within 15 days on grounds of fraud, accident, mistake, or excusable neglect (FAME), or newly discovered evidence. This is the only post-judgment motion allowed; no second motions.
Appeal: No appeal is permitted under the Small Claims Rules to ensure finality. Instead, file a Petition for Certiorari under Rule 65 with the Regional Trial Court within 60 days, alleging grave abuse of discretion. Success rates are low, as certiorari is extraordinary (e.g., A.L. Ang Network, Inc. v. Mondia, G.R. No. 200804, 2013).
Execution of Judgment: If unopposed, execution issues upon finality (15 days from notice). Defendants may post a supersedeas bond to stay execution if appealing via certiorari.

For favorable judgments, defendants can enforce counterclaims similarly.

Special Considerations and Practical Tips

Prohibited Motions: Small claims bar motions to dismiss (except on jurisdiction or prescription), declare default (court does so motu proprio), or for bill of particulars. Raising these improperly may lead to sanctions.
Amicable Settlement: Courts prioritize mediation. Defendants should consider settling to avoid costs, but ensure terms are documented.
Evidence Rules: Relaxed; hearsay may be admitted if reliable. Use originals or certified copies for authenticity.
Costs and Fees: Minimal filing fees (based on claim amount). Prevailing defendants may recover costs but not attorney's fees, as no lawyers are involved.
Corporate Defendants: Represented by officers, not lawyers.
Impact of COVID-19 and Amendments: Post-pandemic, electronic filing and virtual hearings are allowed under A.M. No. 20-12-01-SC, facilitating remote defense.
Common Pitfalls: Delaying Response, insufficient evidence, or emotional arguments. Stay factual and composed.
Resources: Consult free legal aid from the Integrated Bar of the Philippines or Public Attorney's Office for advice (not representation). Review Supreme Court issuances for updates.

Conclusion

Defending a small claims case in the Philippines empowers individuals to resolve disputes equitably without undue burden. By leveraging procedural safeguards, substantive defenses, and strategic preparation, defendants can effectively challenge claims. The system's emphasis on speed and simplicity underscores the importance of prompt action and thorough documentation. Ultimately, adherence to the Civil Code, Rules of Court, and judicial precedents ensures a fair defense, promoting justice in everyday transactions.