Explanation of Article 600
After Articles (597) and (599) determined the conditions under which the guarantor can seek recourse against the debtor in a personal lawsuit or a subrogation lawsuit, and that in both cases, the guarantor cannot seek recourse against the debtor for more than what was paid; this article clarifies that this ruling applies even if the guarantor's payment of the guaranteed debt was in exchange for something different in kind, or was part of a settlement agreement between the creditor and the guarantor; and that the prohibition of the guarantor seeking recourse against the debtor for more than what was paid includes even these two scenarios.
The first paragraph clarifies that the guarantor who has the right to seek recourse against the debtor if he pays the guaranteed debt to the creditor in exchange; by providing another compensation for the debt; the guarantor can seek recourse against the debtor for the value of the debt or what he actually paid, whichever is less; for example, if the debt was one hundred thousand riyals and the creditor accepted a car worth eighty thousand riyals from the guarantor as payment for the debt; the guarantor can only seek recourse against the debtor for eighty thousand riyals, and if the car's value was one hundred and twenty thousand riyals; the guarantor can only seek recourse against the debtor for one hundred thousand riyals, the reason being that the guarantor seeks recourse against the debtor for the actual damage incurred due to the payment of the debt; and he is not entitled to make a profit from this payment.
The second paragraph clarifies that the guarantor who settles with the creditor for less than the guaranteed debt; he seeks recourse against the debtor for the amount he paid to the creditor and not for the amount he guaranteed; for example, if the guarantor guaranteed a debt of one hundred thousand riyals, and then settled with the creditor for fifty thousand riyals; the guarantor can only seek recourse against the debtor for fifty thousand riyals, the reason being the same as in the first paragraph, which is that the guarantor seeks recourse against the debtor for the actual damage incurred due to the payment of the debt; and he is not entitled to make a profit from this payment.
For the guarantor to seek recourse against the debtor according to the article, the conditions for the guarantor's recourse against the debtor as explained in Articles (597) - (599) must be met, which are that the guarantor pays the debt on behalf of the debtor; that the payment is made after the debt is due, and that the guarantee is with the debtor's knowledge and without his objection.
Related To
Article 600
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If the surety pays the debt with a thing other than the actual debt, the surety shall have the right of recourse against the debtor for the actual debt or the thing provided to pay the debt, whichever is lower in value.
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If the surety settles the debt with the creditor for an amount less than the debt, he shall have the right of recourse against the debtor for the amount he actually paid, not for the amount covered by the suretyship.