Recovering Money Sent to Someone Refusing Repayment in the Philippines

I. Nature of the Obligation

When you send money to another person with the expectation of repayment and that person later refuses, the transaction almost always creates a contractual obligation under Philippine law.

The most common classifications are:

1. Mutuum (Simple Loan) – Arts. 1953–1961, Civil Code
   Money or fungible thing is delivered to another who acquires ownership and is bound to return the same amount/quantity of equal kind and quality, with or without interest.

2. Oral or Written Contract of Loan – Even without a written document, an oral agreement to repay is valid and enforceable (Art. 1358 exempts loans from the requirement of writing unless the amount exceeds ₱500 and the parties demand it).

3. Unjust Enrichment (Quasi-Contract) – Art. 22, Civil Code
   “Every person who through an act or performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same.”
   This applies when there was no express agreement but equity demands repayment (e.g., money sent “to help with business” that was never used for the stated purpose).

4. Solutio Indebiti (Undue Payment) – Art. 2154
   Applies when money was sent by mistake or without any cause.

II. When the Refusal to Repay Becomes Criminal (Estafa)

Not every refusal to repay is estafa. Estafa under Art. 315(1)(b) or (2)(a) of the Revised Penal Code requires fraud or deceit at the time of receiving the money.

Estafa is present when:

• The borrower used misrepresentation or false pretenses to induce you to part with the money (e.g., fake investment opportunity, fake emergency, fake business deal, post-dated check known to be unfunded).
• There was abuse of confidence or deceitful means (e.g., pretending to be in dire need while having no intention to repay).

Estafa is not present in a pure civil loan where the borrower simply became unable or unwilling to pay later. The Supreme Court has repeatedly ruled (People v. Ojeda, G.R. No. 140709, 2003; Sy v. People, G.R. No. 183879, 2012) that mere failure to pay a loan is not estafa unless deceit was employed from the beginning.

If estafa is applicable, file the criminal case within the prescriptive periods (15 years for estafa involving more than ₱1,000,000 under R.A. 10951 amendments).

III. Civil Remedies (Most Common and Reliable Path)

A. Extrajudicial Steps (Highly Recommended Before Suit)

1. Formal Demand Letter (through notary public if possible)
   This interrupts prescription (Art. 1155) and serves as basis for interest and attorney’s fees.

2. Barangay Conciliation (Mandatory under the Katarungang Pambarangay Law)
   Required if both parties reside or work in the same city/municipality (except when one party is a juridical entity, or the amount exceeds ₱1,000,000 in Metro Manila small claims).
   Failure to undergo barangay conciliation = premature complaint = dismissal.

B. Judicial Remedies

1. Small Claims Action (Best Option for Amounts ≤ ₱1,000,000 as of 2024 amendment via A.M. No. 08-8-7-SC)

• Covers pure money claims up to ₱1,000,000 (exclusive of interest and costs).
• No lawyers allowed (except if the lawyer is the plaintiff/defendant).
• One-day hearing, decision within 30 days.
• Filing fees are very low (₱5,000–₱15,000 depending on amount).
• Enforceable immediately upon finality.

2. Ordinary Collection of Sum of Money (Rule 141 fees apply)

• For amounts > ₱1,000,000 or when you want to claim damages, attorney’s fees, etc.
• Filed in Regional Trial Court if > ₱2,000,000 (Metro Manila) or > ₱1,000,000 (outside Metro Manila) per R.A. 11576 (2021).

3. Summary Procedure (Revised Rules on Summary Procedure)

• Applies to claims ≤ ₱2,000,000 outside Metro Manila.

C. Evidence You Must Present

The Supreme Court is very strict: you bear the burden of proof.

Strong evidence:

• GCash/BPI/UnionBank/Maya transaction history (screenshot + certification from bank/e-wallet provider).
• Chat messages showing acknowledgment of debt (“Bayaran kita next month,” “Utang ko pa yan sa’yo ₱200k,” etc.).
• Promissory note, MOA, or even a simple “Kasunduan.”
• Voice recordings (admissible if not obtained illegally).
• Witnesses who heard the agreement.

Weak or insufficient evidence:

• Mere transfer record without any message or document showing it was a loan.
• Vague messages like “Send ko na ha” without context.

IV. Prescription Periods (Do Not Sleep on Your Rights)

• Written contract: 10 years (Art. 1144)
• Oral contract: 6 years (Art. 1145)
• Unjust enrichment/solutio indebiti: 6 years
• Action based on quasi-delict (fraud): 4 years from discovery

The clock starts from the date the loan became due and demandable.

A written acknowledgment of the debt or partial payment renews the prescription period (Art. 1155).

V. Interest and Damages You Can Claim

1. Conventional interest – whatever was agreed upon (even 5% per month is valid if not unconscionable).
2. Legal interest – 6% per annum (2024 Bangko Sentral circular changed it from 12% to 6% for forbearance of money).
3. Moratory interest – additional 6% per annum on the total amount from finality of judgment until full payment.
4. Attorney’s fees – usually 10–25% of the amount recovered if stipulated or if there was bad faith.

VI. Special Situations

1. Money sent via GCash/Maya/BPI with “Send Money” feature
   Courts now routinely accept authenticated transaction histories. Request certification from the e-wallet provider (costs ₱200–₱500).

2. Borrower is abroad (OFW)
   File the case in the Philippines. Judgment can be enforced against Philippine assets or through international conventions if the borrower returns.

3. Borrower died
   File the claim against the estate in the estate proceedings (Rule 86, Rules of Court). Deadline is usually within the period stated in the notice to creditors.

4. Money was for “investment” or “business” that failed
   If there was a partnership agreement → action for accounting/dissolution.
   If no agreement → usually treated as a loan or unjust enrichment.

VII. Practical Tips from Philippine Court Experience (2020–2025)

• Always secure written acknowledgment before or after sending the money.
• Screenshot all conversations immediately. Facebook Messenger and GCash chats have been deleted by borrowers in many cases.
• File within small claims whenever possible — fastest and cheapest.
• If the borrower is threatening or harassing you, file estafa by deceit + cyberlibel (if online) + unjust vexation.
• Never accept “installment promises” without reducing them into writing; many borrowers use this to delay prescription.

VIII. Conclusion

In Philippine law, money lent with expectation of repayment is almost always recoverable through civil action. The key is evidence of the obligation and timely action. Criminal liability (estafa) is available only when deceit was present from the beginning. With the expanded small claims limit of ₱1,000,000 and the widespread use of digital transaction records, recovery rates for well-documented loans have significantly improved in recent years.

Act promptly, document everything, and file in the correct forum. The courts are increasingly borrower-unfriendly when presented with clear digital evidence of acknowledgment of debt.