A clever judge, a deceitful debtor, an invisible loan

Here’s an old story that could rival the decision-making skill of King Solomon: A man once lent money to a friend, who later denied receiving it. So, the man brought him to court. The judge asked: “Do you have any written agreement or a credible witness?” The complainant replied: “No, I gave him the money secretly as he wanted.”

The judge ordered: “Then, go to the place where you lent him the money and bring me a handful of rocks, mud and soil so I can interrogate them.” The complainant was puzzled by the court’s instruction and went to fetch a kilo of earth from the place of the transaction. While he was away, the judge turned to the borrower and asked:

“Do you think he’s reached the place by now?” The man quickly replied: “No, the place is in the mountains and is far from here.” The judge laughed and said: “How did you know that… unless you were there and received the money?” Thus, the judge ruled that the man must repay the debt and ordered him to be whipped with 20 lashes for lying.

Lending company

Fast-forward to a modern story. A reader told me the story of a lending company engaged in giving out micro loans not exceeding $100 to members of a poor community. It is known for its family atmosphere and honesty system allowing the complete absence of documented processes, until an internal dispute arose that tested the limits of verbal agreements, common sense and trust among its members.

What started as a simple loan turned into a masterclass in corporate justice when Louie, the borrower, tested the company’s honesty system by not paying his loan after one month when it became due. With no receipts, no contract and not even a “Thanks, bro” in a chat group, management was left with wounded pride and the vague hope that justice would prevail.

In other companies, this might have gone straight to a human resource department purgatory, where cases go to die in endless investigative stages. However, Pete, the company manager was unfazed. He brought the matter to the community elders: “This is a test case for us. How do we handle Louie’s case in the absence of any document or witness?”

Louie, eyes wide open with an angelic-like innocence was also in attendance during that meeting. He continued to lay the predicate: “May I ask management if they can prove the existence of this loan?” Pete replied in the negative. He reiterated their time-honored honesty system of lending money to borrowers.

“No, we didn’t write anything down. We handed him the money inside the bank where we had an account. It was done while trusting Louie would pay the loan plus very little interest.” The elders advised Pete to go to the bank to secure a copy of their CCTV recording or anything that would suggest Louie was there.

After all, not all members have an account in that bank. Once Pete left the meeting, the elders turned to Louie who was rehearsing his next line of defense. The elders casually dropped the bait: “Do you think he has reached the bank yet?”

Louie, caught off guard and overconfident, replied, “Nope, the bank is at the far end of the town. He probably hasn’t even passed a police outpost yet.” The elders leaned back, smiled and asked the million-dollar question: “How do you know exactly where he’s going... unless you were there?”

Silence. A metaphorical spotlight hit Louie’s face. He had walked right into the trap – no lie detectors, no wiretaps, just one well-placed question and the elders’ wisdom.

No signature needed

There are lessons learned and laughed at. Documentation is everything. It’s not optional, regardless of the amount involved. If you’re making a deal, write it down. Tattoo it if necessary. An honesty system is not a legally binding clause. They can only make for a great drama. Unless you’re on a reality show they won’t hold up in court, even in front of an HR person.

“Has he reached the spot yet?” may sound innocent. It’s not. It’s a psychological mouse trap. When in doubt, say honesty is not only the best policy but gives the contracting parties the best of both worlds. Take the case of Globe’s walang pirmahan (no signature required) policy on customers’ service applications.

It’s a break from the tradition of manual documentation. Still, there are documents required but they have to be done through a digital process. Customers can apply for services entirely online while removing the necessity for physical paperwork or visits to Globe stores. No physical documents like proof of identity or billing address.

They’re all facilitated through Globe’s online platforms. The quick service activation simplifies the application process and reduces barriers to entry. Once the application is submitted and payment is made, Globe schedules the prompt installation or activation of its service. It’s customer satisfaction in action.

In the corporate jungle, trust is the currency of civilization. It’s not only a virtue. Everyone needs receipts, supported by clear policies as the framework of order. While documentation supports transactions in reality, a towering paper trail often reveals not transparency, but the slow erosion of trust – especially when navigating the labyrinthine corridors of government oversight.

Rey Elbo is a quality and improvement enthusiast. Share your story with [email protected] or DM him on Facebook, LinkedIn, X, or via https://reyelbo.com. Anonymity is guaranteed under an honesty system.