Short answer. No, not against you. Article 2063 provides that a compromise between the creditor and the principal debtor benefits the guarantor but does not prejudice him. So a settlement made without you can help your position but cannot be turned against you. The same one-way rule protects the debtor from deals between guarantor and creditor.
What the law says
A compromise between the creditor and the principal debtor benefits the guarantor but does not prejudice him
Civil Code, Article 2063 — Compromise and the Guarantor. Read the full provision →
A settlement you were not part of works one way only
When the creditor and the borrower settle between themselves, you as guarantor were not at the table — and Article 2063 makes sure their deal cannot be sprung on you. It provides that A compromise between the creditor and the principal debtor benefits the guarantor but does not prejudice him. The effect runs in one direction. If the compromise improves your position, you may take advantage of it; if it worsens your position, it simply does not reach you. A bargain struck without your consent cannot be used to enlarge or harden the liability you undertook.
What benefit and prejudice mean here
Read concretely, the rule is straightforward. If the creditor and debtor agree to reduce the debt, condone part of it, or extinguish it, the guaranty is a security for the debt and you owe no more than what is left — that is a benefit you keep. But if their compromise purported to increase the sum, add new burdens, or tighten the terms, none of that binds you, because you never agreed to guarantee those heavier obligations. Your consent fixed the outer limit of your exposure, and a later deal between two other parties cannot push past it.
The rule is symmetrical
Article 2063 does not stop at protecting the guarantor. Its second half applies the identical logic the other way: a compromise between the guarantor and the creditor benefits but does not prejudice the principal debtor. The debtor, absent from that deal, may enjoy anything favourable in it but cannot be harmed by it. The principle underlying both halves is the same one that runs through the law of contracts — a person is not bound by an agreement he was not a party to. Each protects whoever stood outside the particular compromise from having it weaponised against him.
How to use this in practice
If a compromise between the creditor and borrower reduced the debt, hold the creditor to it — your liability shrinks with the obligation, and you can insist on the smaller figure. If instead the creditor points to a settlement made without you and demands more than you guaranteed, Article 2063 is your answer: the deal benefits you where it helps and is inert where it hurts. Either way, get a copy of the compromise and read what it actually did to the debt, because that document, not the creditor's characterisation of it, is what governs.
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.
- Spouses Alfredo and Susana Ong vs. Philippine Commercial International Bank, G.R. No. 160466, January 17, 2005 — read the decision on LawPhil →