From the Heart : Songwriters Circle’ at the Palomino showcases artists firmly rooted in the acoustic tradition of American music.

The small crowd beneath the soft stage lights of the Palomino is sitting shoulder to shoulder right now. And among the five singer-songwriters is Judy Toy, in denim vest and jeans. She is strumming an acoustic guitar in the lilting style of an old country waltz.

Her voice is a brave quiver as she sings: “Take me dancing by the river / Wipe the tear from my eye . . . before you say goodby.”

Those around her are also holding guitars, and soon she’s inspired some unrehearsed accompaniment from two of them--host Muffin and Steve Hill, the author of at least five No. 1 country hits during the ‘80s.

It’s the sort of musical moment that demands attention and is just the kind of thing Palomino owner Sherry Thomas listens to while alone in her car. “To hear someone sing something they wrote from the heart--it just gives me the chills,” Thomas says.

That feeling ultimately led Thomas to establish “Songwriters Circle” on Sunday nights at the club, an evening modeled partly after her memories of those at Nashville’s Bluebird Cafe, where it’s acoustic songwriter night every night.

“The songwriter is so unrecognized,” says Thomas, who traveled to Nashville twice a year in the ‘70s and early ‘80s with her late husband, Palomino co-founder Tommy Thomas, an original member of the Country Music Assn.

The weekly songwriter showcase, which will probably move to Wednesday nights in January, is another step in returning the Palomino to its position as the West Coast venue for American-roots music. In bygone days, stretching back to the club’s opening in the 1940s, artists from Johnny Cash to Linda Ronstadt were regulars on this stage.

“It’s almost like it’s classical,” Thomas says of the acoustic country performed at the songwriters showcase. “It’s beautiful.”

For singer-guitarist Wesley James, who is more accustomed to performing with a full country band, the solo acoustic experience leaves him feeling “naked,” he says. “I was waiting for the band to kick in, and the band’s not there.”

“I get an audience,” adds Cody Bryant, a country and bluegrass artist. “I get to hear good songs. I get inspiration. There’s a special charge when you get up there. It’s also a great way to see how songs go over.”

Early this night, Muffin dedicates his first song to Thomas, who watches much of the show smiling from behind the bar. Wearing a New York Yankees cap and jersey, he sings: “I met her at the Palomino / She drove down from Mendocino, to that honky-tonk I love to play.”

Muffin, whose real name is Jim Caputo Yessian, first performed at the Palomino in 1975, when he tied with actor-comedian Jim Varney (now of “Ernest” movie fame) for first prize on talent night. He also remembers watching a sold-out late-’70s performance by Emmylou Harris and Linda Ronstadt get nearly shut down by fire marshals for overcrowding. Then-Gov. Jerry Brown, who was sitting in the audience, had to intervene.

But it wasn’t until this year that the Bronx-born Muffin landed at the Palomino as a continuing presence. Besides hosting the “Songwriters Circle,” he also helps Thomas wade through the dozens of CDs, tapes and promotional packages that arrive in the mail for the club owner every week.

“We would probably go up there and do it even if there was no audience,” Muffin says of the weekly showcases, where artists are not paid for their performances. “We just love to do it.”

Muffin (who earned his nickname as a 10-year-old for having a round, muffin-shaped face) says that several songwriters who have met on the show have begun collaborating on songs.

That kind of atmosphere seemed not to exist at all when Toy first arrived in Los Angeles from Oregon about six years ago. The old Los Angeles folk rock scene that had Ronstadt, Jackson Browne, the Eagles and others hanging out at such local clubs as the Troubadour and Palomino had long since disappeared.

So for more than three years, Toy ended up playing lead guitar with an active alternative rock band called the Creamers, which subsequently recorded several independent records. “For me as a songwriter and a singer, (the rock ‘n’ roll genre) just wasn’t where I wanted to be,” she says now.

In the last few years, acoustic music has found a place again on the Los Angeles music scene. That’s manifest in all the acoustic showcases at small clubs and coffeehouses scattered across the city. None of these, though, have the weight of the Palomino’s history. “You’re on stage with the ghosts of everyone who has ever played up there,” Muffin says.

To add credibility to “Songwriters Circle,” he is trying to interest some major folk and country artists to sit in occasionally among the featured performers. And he’ll continue to mix new artists with those who have earned more professional credits.

The opportunity to share the stage with other singer-songwriters, Toy says, “is inspiring. It helps me to learn about the craft of songwriting. Everybody has their own approach to it.”

Sitting next to her during the performance tonight is Hill, who has written songs for the Desert Rose Band, the Dillards, Roy Rogers and others. He also has his own band, which performs at clubs throughout Ventura County, but says he is attracted to the Palomino showcase for the special attention the songs are given.

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“People listen,” says Hill, who began his career as a songwriter in 1972 with the encouragement of his roommate at the time, songwriter Rodney Crowell. “A good song always breaks down to acoustic guitar and a vocal. If it works that way, then you’ve got something.”

Adds Toy: “The job of a song is to take people somewhere. If you really move the audience then your job is done.”

Hill believes that the success of the acoustic-based “MTV Unplugged” series of television performances and albums is no accident. “There’s something about playing music on wood that’s thrilling,” says Hill, who for a time led an act called the Slingshot Band, which recorded an album for Polygram in 1982. “There’s nowhere to hide. You have your own soul in the palm of your hand.

“Songwriting is kind of a lonely business,” he continues. “It’s nice to take that feeling you had writing it in your living room, not colored up with electric guitars, and bring it here. It’s like holding your baby.”

Where and When

What: “Songwriters Circle.”

Location: The Palomino, 6907 Lankershim Blvd., North Hollywood.

Hours: 7 p.m. Sundays.

Price: $3.

Call: (818) 764-4010.