Prescription of lender’s right to collect from debtor varies

Persida Acosta

Persida Acosta

Dear PAO,

My brother-in-law borrowed P80,000.00 from me in January 2006.

We agreed that he will return the money without interest after two months or on March 30, 2006. Unfortunately, he has not paid his indebtedness to me up to now. Can I still file a case against my brother-in-law for the recovery of my money?

Dear Flordeliza,
According to Article 1953 of the Civil Code of the Philippines (CCP), a person who receives a loan of money or any other fungible thing acquires the ownership thereof and is bound to pay to the creditor an equal amount of the same kind and quality. Hence, your brother-in-law has the obligation to return to you the amount that he borrowed on the date and time that you have agreed upon. If he fails to comply with his obligation, you shall have the right to institute an action against him for the collection of his indebtedness to you.

But even if you were given the right to institute an action against your brother-in-law, the law also gives you a period of time within which you may assert your right. Your failure to file a case during such period shall result in the prescription of your right of action against him for the collection of his indebtedness (Article 1139, CCP). The period of prescription for the collection of sum of money varies depending on the existence of a written agreement between you and your brother-in-law.

If you and your brother-in-law executed a written contract of loan, you may institute an action for collection of sum of money within ten (10) years from the time the right of action accrues (Article 1144, CCP). If, however,  you only orally agreed upon the loan, the action shall be considered to have prescribed after the lapse of six (6) years (Article 1145, CCP).

Hence, since eight (8) years had already lapsed since the obligation of your brother-in-law to pay his loan fell due, you may institute an action only if you have a written contract of loan. But since the money which you are claiming is less than one hundred thousand pesos (P100,000.00), your action shall be governed by the Rules of Procedure for Small Claims Cases. You may file your petition for collection of sum of money before the Metropolitan Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts and Municipal Circuit Trial Courts designated as small claims court of the place where you or your debtor lives (En Banc Resolution No. A.M. No. 08-8-7-SC dated October 27, 2009).

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts that 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


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