As a guarantor who had to pay, can I recover my expenses and damages from the borrower on top of the debt itself?

Paying triggers a right to be made whole

When you satisfy the debt as guarantor, the law does not treat it as your own loss to absorb. Article 2066 states that the guarantor who pays for a debtor must be indemnified by the latter. The borrower was always the one who truly owed the debt; you merely answered for it. So having paid, you step into a right of recovery against him, and that right is expressly built to give you back more than just the principal. The article then itemizes what the indemnity covers, so the scope of your claim is spelled out rather than left to argument.

More than the principal: interest and expenses

Beyond the total amount of the debt, the indemnity reaches interest and costs. It includes the legal interests thereon from the time the payment was made known to the debtor, even though it did not earn interest for the creditor — so interest can run in your favor from when you told the borrower you had paid, regardless of whether the original debt bore interest. It also covers the expenses incurred by the guarantor after having notified the debtor that payment had been demanded of him. Notice to the borrower is the pivot: both the interest and the recoverable expenses are keyed to the point you informed him.

Damages, where they are due

The article's fourth item is damages, if they are due. This is not an automatic add-on. It allows you to recover damages where they are properly owing under the circumstances, on top of the debt, interest and expenses. The phrase 'if they are due' signals that damages depend on the situation rather than following from the mere fact of payment. So while your right to the debt, interest and qualifying expenses is laid out directly, damages come in only where the facts actually support a claim for them.

Why notice to the borrower matters so much

The recurring theme in Article 2066 is that your fuller recovery depends on having kept the borrower informed. Legal interest runs from when the payment was made known to him, and recoverable expenses are those incurred after you notified him that payment had been demanded. That structure rewards a guarantor who communicates and warns against one who pays quietly and later springs a large bill. To protect the full indemnity the article offers, a guarantor is well advised to notify the borrower promptly of the demand and of the payment, and to keep a clear record of the expenses that follow.

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.

• Luis Juan L. Virata and UEM-Mara Philippines Corporation vs. Alejandro Ng Wee Westmont Investment Corp., et al./Westmont Investment, Corporation vs. Alejandro Ng Wee/Manuel Estrella vs. Alejandro Ng Wee/Simeon Cua, et al. vs. Alejandro Ng Wee/Anthony T. Reyes vs. Alejandro Ng Wee, et al, G.R. No. 220926 / G.R. No. 221058 / G.R. No. 221109 / G.R. No. 221135 / G.R. No. 221218, July 5, 2017 — read the decision on LawPhil →
• Vil-Rey Planners and Builders vs. Lexber, Inc./Stronghold Insurance Company, Inc. vs. Lexber, Inc, G.R. No. 189401 / G.R. No. 189447, June 15, 2016 — read the decision on LawPhil →
• Philippine National Construction Corporation vs. Asiavest Merchant Bankers (M) Berhad, G.R. No. 172301, August 19, 2015 — read the decision on LawPhil →
• CCC Insurance Corporation vs. Kawasaki Steel Corporation, et al, G.R. No. 156162, June 22, 2015 — read the decision on LawPhil →

Related provisions

• Civil Code, Article 2066 — Guarantor's Right to Indemnity