Short answer. Only your share. Article 1277 of the Civil Code says confusion does not extinguish a joint obligation except as to the share of the creditor or debtor in whom the two roles meet. Because your liability is joint, becoming the creditor wipes out your portion of the debt, not the whole of it.
What the law says
Confusion does not extinguish a joint obligation except as regards the share corresponding to the creditor or debtor in whom the two characters concur.
Civil Code, Article 1277 — Confusion in Joint Obligations. Read the full provision →
What 'confusion' means here
Confusion (or merger) happens when the roles of creditor and debtor come together in the same person — for example, when a debtor inherits the creditor's right. Ordinarily that extinguishes the obligation, because a person cannot owe money to himself. Article 1277 tempers this for joint obligations. It provides that Confusion does not extinguish a joint obligation except as regards the share corresponding to the creditor or debtor in whom the two characters concur.
Why only your share falls away
In a joint obligation, the debt is divided: each debtor owes only his own proportionate part, and the whole is really a bundle of separate shares. So when you come to hold the creditor's position, the merger touches only the part that is yours. That share is extinguished because you would otherwise be collecting from yourself. The shares of the other joint debtors are untouched — they still owe their portions, now to you as the person who stepped into the creditor's shoes.
The contrast the article implies
The rule turns on the joint character of the debt. Had the obligation been solidary — where each debtor can be made to answer for the whole — the effect of confusion would be analysed differently, because the shares are not neatly separated in the same way. Article 1277 speaks only to joint obligations and confines the extinguishment to the merged share. If you are unsure whether your obligation is joint or solidary, that classification is decisive here, so it is worth confirming from the terms of the debt before assuming how much of it has disappeared.
What you can collect afterwards
Having stepped into the creditor's place, you may now call on the remaining joint debtors, but only for their own shares. You cannot demand from any one of them the portion that merged in you, nor the portions belonging to the others, because a joint debtor is never answerable for more than his own part. Any securities or guarantees the original creditor held for those surviving shares pass to you along with the credit. What has disappeared is a single fraction of the debt; the rest of the obligation continues to run exactly as before, simply with you now on the collecting side.
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.
- PNB Management and Development Corp. (PNB MADECOR) vs. R&R Metal Casting and Fabricating, Inc, G.R. No. 132245, January 2, 2002 — read the decision on LawPhil →