Dear Atty. Maan,

My husband lent P370,000 to his colleague, who promised to pay the money back in three months. Six months have passed, and his co-worker refuses to pay despite multiple reminders. Now, my husband is considering taking legal action. Can he still recover the money if the person who borrowed refuses to pay?

Minda

Dear Minda,

He may consider filing a Small Claims Case with the Metropolitan or Municipal Trial Court if the amount is P1,000,000 or below (excluding interest and penalties) under the 2016 Revised Rules of Procedure for Small Claims Cases. The purpose of a small claims is to provide a simpler and a more inexpensive and expeditious means of settling disputes involving purely money claims. 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.

The procedure on small claims cases was promulgated for faster resolution of claims. Since the amount of claim is relatively small, it is the court’s policy not to keep these cases from dragging for long periods before finally being decided. Since the proceedings must be speedy, inexpensive and informal, the procedure was simplified. However, it is important to note that in Small Claims Cases, parties are generally not allowed to be represented by lawyers.

Before filing a case, the lender should send a demand letter outlining the loan details, repayment terms, and a final deadline for payment. This serves as evidence that the borrower was formally asked to pay. Thereafter, a case for Small Claims may be commenced as follows: SEC. 6. Commencement of Small Claims Action. — A small claims action is commenced by filing with the court an accomplished and verified Statement of Claim (Form 1-SCC) in duplicate, accompanied by a Certification Against Forum Shopping, Splitting a Single Cause of Action, and Multiplicity of Suits (Form 1-A-SCC), and two duly certified photocopies of the actionable document/s subject of the claim, as well as the affidavits of witnesses and other evidence to support the claim. No evidence shall be allowed during the hearing which was not attached to or submitted together with the Statement of Claim, unless good cause is shown for the admission of additional evidence.

Hope this helps.

Atty. Mary Antonnette Baudi