Let's see if I can clear this up.
Person B buys a house for 100,000 but the mortgage company will only lend 75,000. Person B doesn't have the 25,000 for a down payment. The mortgage company will also not lend the 75,000 if person B borrows the 25,000.
Person A is willing to give person B 25,000 but the mortgage company wants to make sure that it's not a loan in disguise requires person A to provide a letter attesting that it is a gift with no expectation of getting the money back.
Later on, for some reason, Person A sues person B for the 25,000 and the judge awards Person A the money back.
You have asked the following:
Person B looking to understand And see if there is any action that can be done ?
To even begin to understand what happened we need you to tell us two things.
1 - Why did person A sue for the money back? You'll have to read the initial complaint and tell it to us word for word.
2 - When the judge awarded the money back to person A did the judge say why he ruled that way? The judge would have had to have said or written something about justifying his decision.
As to what can be done. Person B can file an appeal but there is a deadline to do that. What was the date of the judgment?