Short answer. Only what you actually paid, not the full face of the debt. Article 2067 says that if the guarantor has compromised with the creditor, he cannot demand of the debtor more than what he has really paid, even though paying subrogates him to the creditor's rights.
What the law says
The guarantor who pays is subrogated by virtue thereof to all the rights which the creditor had against the debtor. If the guarantor has compromised with the creditor, he cannot demand of the debtor more than what he has really paid.
Civil Code, Article 2067 — Guarantor's Subrogation. Read the full provision →
Paying puts you in the creditor's shoes
When you pay the debt as guarantor, the law transfers the creditor's rights to you. Article 2067 states that the guarantor who pays is subrogated by virtue thereof to all the rights which the creditor had against the debtor. Subrogation means you now hold, against the borrower, the same claim the creditor used to hold. In the ordinary case, that lets you step in and enforce the debt against the borrower directly. This is the mechanism that turns your payment into a recoverable claim rather than a gift to the borrower — you take over the creditor's position for the purpose of getting your money back.
But a compromise caps you at what you really paid
The second sentence is the one that governs your situation. It provides that if the guarantor has compromised with the creditor, he cannot demand of the debtor more than what he has really paid. Having settled for less than the full amount, you may collect back from the borrower only the amount you actually paid out — not the larger face value of the original debt. The discount you negotiated with the creditor is not yours to keep as profit at the borrower's expense. Your recovery is measured by your real outlay, so a settlement at, say, a reduced sum limits your claim to that reduced sum.
Why the law draws the line there
The reason is that the guarantor's recovery is about being reimbursed, not about gaining. Subrogation exists to restore to you what you spent covering another's debt; it is not a device to let you buy the debt cheap and then enforce it at full value against the borrower. If you were allowed to collect the entire original amount after settling for less, you would be enriching yourself through the very obligation you only guaranteed. Article 2067 prevents that by tying your demand against the borrower to what actually left your pocket in the compromise.
What this means in practice
So focus your claim on your real payment. Keep clear proof of the compromise and of the exact amount you paid the creditor, because that figure sets the ceiling on what you can collect from the borrower. Your related rights as a paying guarantor — such as reimbursement for the sum paid and other items the law allows — remain, but all of it is anchored to what you genuinely disbursed once a compromise is involved. The borrower, for his part, cannot be made to pay you more than you paid to extinguish his debt.
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.
- CCC Insurance Corporation vs. Kawasaki Steel Corporation, et al, G.R. No. 156162, June 22, 2015 — read the decision on LawPhil →
- Rizal Commercial Banking Corporation vs. Teodoro G. Bernardino, G.R. No. 183947, September 21, 2016 — 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 →