Short answer. It depends on why you paid. Article 1960 sends the question to the rules on solutio indebiti or on natural obligations, as the case may be. Interest paid by mistake is recoverable; interest paid knowingly and voluntarily generally is not, so your state of mind at payment decides it.
What the law says
If the borrower pays interest when there has been no stipulation therefor, the provisions of this Code concerning solutio indebiti, or natural obligations, shall be applied, as the case may be.
Civil Code, Article 1960 — Payment of Interest Not Stipulated. Read the full provision →
Start from the fact that nothing was owed
Article 1956 provides that no interest shall be due unless it has been expressly stipulated in writing, so interest on a silent loan was never a debt at all. Article 1960 then deals with what happens when it is paid anyway: If the borrower pays interest when there has been no stipulation therefor, the provisions of this Code concerning solutio indebiti, or natural obligations, shall be applied, as the case may be. Notice that the article does not answer the question so much as sort it into one of two boxes, and which box you land in is not about the lender's conduct but about yours.
Paid by mistake: solutio indebiti
The first box is undue payment. Article 2154 provides that if something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises. A borrower who paid because the statement of account included interest and he assumed it was owed, or because he never realised the note was silent on the point, is describing a mistake. Article 2155 adds that payment by reason of a mistake in the construction or application of a doubtful or difficult question of law may come within the same rule, so an error about the legal position is not automatically fatal.
Paid knowingly: a natural obligation
The second box closes the door. Article 1423 distinguishes civil obligations, which give a right of action to compel performance, from natural obligations, which are based on equity and natural law, do not grant such a right, but after voluntary fulfilment by the obligor authorise the retention of what has been delivered or rendered. A borrower who knew perfectly well that no interest had been agreed and paid it anyway, to keep the relationship, to secure indulgence, or because he felt he ought to, has voluntarily fulfilled an obligation of that kind, and the lender may keep it.
Proving which one it was
The evidence is unglamorous and decisive. Produce the loan document showing no written stipulation for interest. Then show how the payments came to be made: the statements or demand letters that presented interest as due, the receipts and how they were applied, any message in which you questioned the charge, and the point at which you discovered the note was silent. A protest recorded at the time of payment, however informal, is the strongest single indicator that the payment was not the voluntary fulfilment the second box requires.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Sebastian Siga-an vs. Alicia Villlanueva, G.R. No. 173227, January 20, 2009 — read the decision on LawPhil →
- New Sampaguita Builders Construction, Inc., et al. vs. Philippine National Bank, G.R. No. 148753, July 30, 2004 — read the decision on LawPhil →
Related provisions
- Civil Code, Article 1960 — Payment of Interest Not Stipulated
- Civil Code, Article 1956 — Interest Must Be Stipulated in Writing
- Civil Code, Article 2154 — Solutio Indebiti
- Civil Code, Article 1423 — Civil and Natural Obligations