insolvent, the creditor may demand another who has all

Title XV. - GUARANTY the qualifications required in the preceding article. The
case is excepted where the creditor has required and
CHAPTER 1 stipulated that a specified person should be the guarantor.
NATURE AND EXTENT OF GUARANTY (1829a)

Art. 2047. By guaranty a person, called the guarantor,
binds himself to the creditor to fulfill the obligation of the
principal debtor in case the latter should fail to do so.
If a person binds himself solidarily with the principal
debtor, the provisions of Section 4, Chapter 3, Title I of
this Book shall be observed. In such case the contract is
called a suretyship. (1822a)
Art. 2048. A guaranty is gratuitous, unless there is a
stipulation to the contrary. (n)
Art. 2049. A married woman may guarantee an
obligation without the husband's consent, but shall not
thereby bind the conjugal partnership, except in cases
provided by law. (n)
Art. 2050. If a guaranty is entered into without the
knowledge or consent, or against the will of the principal
debtor, the provisions of Articles 1236 and 1237 shall
apply. (n) with knowledge of DR
DEFINITION
By guaranty, a person called the guarantor, binds himself
to the creditor, to fulfill the obligation of the principal
debtor in case the latter should fail to do so. It is a
contract between the guarantor and the creditor.
CHARACTERISTICS
1. Accessory1 – dependent for its existence upon the
principal obligation guaranteed by it;
2. Subsidiary and conditional – takes effect only
when the principal debtor fails in his obligation
subject to limitation
3. Unilateral –
a. It gives rise only to a duty on the part of
the guarantor in relation to the creditor
and not vice versa
b. It may be entered into even without the
intervention of the principal debtor.
4. Guarantor must be a person distinct from the
debtor – a person cannot be the personal
guarantor of himself

Art. 2051. A guaranty may be conventional, legal or CLASSIFICATION OF GUARANTY

judicial, gratuitous, or by onerous title. 1. Guaranty in the broad sense:
a. Personal – guaranty is the credit given by
It may also be constituted, not only in favor of the the person who guarantees the fulfillment
principal debtor, but also in favor of the other guarantor, of the principal obligation; or
with the latter's consent, or without his knowledge, or b. Real – guaranty is property, movable, or
even over his objection. (1823) immovable
i. Real mortgage (2124) or
Art. 2052. A guaranty cannot exist without a valid antichresis (2132) – guaranty is
obligation. immovable
ii. Chattel mortgage (2140) or
Nevertheless, a guaranty may be constituted to guarantee pledge (2093) – guaranty is
the performance of a voidable or an unenforceable movable
contract. It may also guarantee a natural obligation. 2. As to its origin:
(1824a) a. Conventional – constituted by agreement
of the parties (2051[1])
Art. 2053. A guaranty may also be given as security for b. Legal – imposed by virtue of a provision
future debts, the amount of which is not yet known; there of law
can be no claim against the guarantor until the debt is c. Judicial – required by a court to
liquidated. A conditional obligation may also be secured. guarantee the eventual right of one of
(1825a) the parties in a case.
3. As to consideration:
a. Gratuitous – guarantor does not receive
Art. 2054. A guarantor may bind himself for less, but not any price or remuneration for acting as
for more than the principal debtor, both as regards the such (2048)
amount and the onerous nature of the conditions. b. Onerous – one where the guarantor
receives valuable consideration for his
Should he have bound himself for more, his obligations guaranty
shall be reduced to the limits of that of the debtor. (1826) 4. As to person guaranteed:
a. Single – constituted solely to guarantee
Art. 2055. A guaranty is not presumed; it must be or secure performance by the debtor of
express and cannot extend to more than what is the principal obligation;
stipulated therein. b. Double or sub-guaranty – constituted to
secure the fulfillment by the guarantor of
If it be simple or indefinite, it shall compromise not only a prior guaranty
the principal obligation, but also all its accessories, 5. As to its scope and extent:
including the judicial costs, provided with respect to the a. Definite – where the guaranty is limited
latter, that the guarantor shall only be liable for those to the principal obligation only, or to a
costs incurred after he has been judicially required to pay. specific portion thereof;
(1827a) b. Indefinite or simple – where the guaranty
included all the accessory obligations of
Art. 2056. One who is obliged to furnish a guarantor shall the principal, e.g. costs, including judicial
present a person who possesses integrity, capacity to bind costs.
himself, and sufficient property to answer for the
obligation which he guarantees. The guarantor shall be RULES GOVERNING GUARANTY
subject to the jurisdiction of the court of the place where
this obligation is to be complied with. (1828a)
1 E.ZOBEL, INC. v CA: “A contract of guaranty, on the other hand, is
Art. 2057. If the guarantor should be convicted in first a collateral undertaking to pay the debt of another in case the latter
instance of a crime involving dishonesty or should become does not pay the debt.”
Page 1 of 7
1. A guaranty is generally gratuitous (2048)
General Rule: Guaranty is gratuitous
Exception: When there is a stipulation to the
contrary
2. On the cause of a guaranty contract
a. Presence of cause which supports principal
obligation: Cause of the contract is the same
cause which supports the obligation as to the
principal debtor2. The consideration which
supports the obligation as to the principal
debtor is a sufficient consideration to support
the obligation of a guarantor or surety.
b. Absence of direct consideration or benefit to
guarantor: Guaranty or surety agreement is
regarded valid despite the absence of any
direct consideration received by the
guarantor or surety, such consideration need
not pass directly to the guarantor or surety;
a consideration moving to the principal will
suffice.
3. A married woman who is a guarantor binds only
her separate property, generally
Exceptions:
1. With her husband’s consent, bind the community
or conjugal partnership property
2. Without husband’s consent, in cases provided by
law, such as when the guaranty has redounded to
the benefit of the family.
4. A guaranty need not be undertaken with the
knowledge of the debtor (2050)
1. Guaranty is unilateral – exists for the benefit of
the creditor and not for the benefit of the
principal debtor
2. Creditor has every right to take all possible
measures to secure payment of his credit –
guaranty can be constituted even against the will
of the principal debtor
However, as regards payment made by a third
person:
1. Payment without the knowledge or against the
will of the debtor:
a. Guarantor can recover only insofar as the
payment has been beneficial to the
debtor
b. Guarantor cannot compel the creditor to
subrogate him in his rights
2. Payment with knowledge or consent of the
debtor: Subrogated to all the rights which the
creditor had against the debtor
5. The guaranty must be founded on a valid
principal obligation (2052[1])
Guaranty is an accessory contract: It is an indispensable
condition for its existence that there must be a principal
obligation. Hence, if the principal obligation is void, it is
also void.
6. A guaranty may secure the performance of a
voidable, unenforceable, and natural obligation
(2052[2])
A guaranty may secure the performance of a:
1. Voidable contract – such contract is binding,
unless it is annulled by a proper court action
2. Unenforceable contract – because such contract is
not void
2 SEVERINO v SEVERINO: “A guarantor or surety is bound by the
same consideration that makes the contract effective between the
principal parties thereto.”
3. Natural obligation – the creditor may proceed
against the guarantor although he has not right of
action against the principal debtor for the reason
that the latter’s obligation is not civilly
enforceable. When the debtor himself offers a
guaranty for his natural obligation, he impliedly
recognizes his liability, thereby transforming the
obligation from a natural into a civil one.
7. A guaranty may secure a future debt (2053)
Continuing Guaranty or Suretyship3:
1. Future debts, even if the amount is not yet
known, may be guaranteed but there can be no
claim against the guarantor until the amount of
the debt is ascertained or fixed and demandable.
Rationale: A contract of guaranty is subsidiary.
a. To secure the payment of a loan at
maturity – surety binds himself to
guarantee the punctual payment of a
loan at maturity and all other obligations
of indebtedness which may become due
or owing to the principal by the borrower.
b. To secure payment if any debt to be
subsequently incurred – a guaranty shall
be construed as continuing when by the
terms therof it is evident that the object
is to give a standing credit to the
principal debtor to be used from time to
time either indefinitely or until a certain
period, especially if the right to recall the
guaranty is expressly reserved.
c. To secure existing unliquidated debts –
refer to debts existing at the time of the
constitution of the guaranty but the
amount thereof is unknown and not to
dents not yet incurred and existing at
that time. The surety agreement itself is
valid and binding even before the
principal obligation intended to be
secured thereby is born, any more than
there would be in saying that obligations
which are subject to a condition
precedent are valid and binding before
the occurrence of the condition precedent
8. A guaranty may secure the performance of a
conditional obligation
1. Principal obligation subject to a suspensive
condition – the guarantor is liable only after the
fulfillment of the condition.
2. Principal obligation subject to a resolutory
condition – the happening of the condition
3 DIÑO v. CA: “Under the Civil Code, a guaranty may be given to
secure even future debts, the amount of which may not known at the
time the guaranty is executed. This is the basis for contracts
denominated as continuing guaranty or suretyship.
A continuing guaranty is one which is not limited to a single
transaction, but which contemplates a future course of dealing,
covering a series of transactions, generally for an indefinite time or
until revoked. It is prospective in its operation and is generally intended
to provide security with respect to future transactions within certain
limits, and contemplates a succession of liabilities, for which, as they
accrue, the guarantor becomes liable.
A continuing guaranty is one which covers all transactions,
including those arising in the future, which are within the description or
contemplation of the contract, of guaranty, until the expiration or
termination thereof. A guaranty shall be construed as continuing when
by the terms thereof it is evident that the object is to give a standing
credit to the principal debtor to be used from time to time either
indefinitely or until a certain period, especially if the right to recall the
guaranty is expressly reserved.
Where the contract of guaranty states that the same is to
secure advances to be made "from time to time" the guaranty will be
construed to be a continuing one.”
Page 2 of 7
 extinguishes both the principal obligation and the GUARANTY WARRANTY
guaranty
Contract by which a An undertaking that
person is bound to the title, quality, or
9. A guarantor’s liability cannot exceed the principal another for the quantity of the
obligation (2054) fulfillment of a promise subject matter of a
or engagement of a contract is what it
third party has been
General Rule:
represented to be,
Guaranty is a subsidiary and accessory contract –
and relates to some
guarantor cannot bind himself for more than the principal
agreement made
debtor and even if he does, his liability shall be reduced to
ordinarily by the
the limits of that of the debtor. But the guarantor may
party who makes
bind himself for less than that of the principal.
the warranty
Exceptions:
1. Interest, judicial costs, and attorney’s fees as part GUARANTY DISTINGUISHED FROM SURETYSHIP
of damages may be recovered – creditors suing
on a suretyship bond may recover from the GUARANTY SURETYSHIP
surety as part of their damages, interest at the Liability depends upon Assumes liability as a
legal rate, judicial costs, and attorney’s fees when an independent regular party to the
appropriate, even without stipulation and even if agreement to pay the undertaking
the surety would thereby become liable to pay obligation if the
more than the total amount stipulated in the primary debtor fails to
bond. do so
Interest runs from: Engagement is a Charged as an original
collateral undertaking promisor
a. Filing of the complaint (upon judicial
demand); or Secondarily liable – he Primarily liable –
b. The time demand was made upon the contracts to pay if, by undertakes directly for
surety until the principal obligation is the use of due the payment without
fully paid (upon extra-judicial demand) diligence, the dent reference to the
cannot be paid solvency of the
Rationale principal, and is so
Surety is made to pay, not by reason of the responsible at once the
contract, but by reason of his failure to pay when latter makes default,
demanded and for having compelled the creditor without any demand by
to resort to the courts to obtain payment. the creditor upon the
principal whatsoever or
2. Penalty may be provided – a surety may be held any notice of default
liable for the penalty provided for in a bond for
violation of the condition therein. Only binds himself to Undertakes to pay if
Principal’s liability may exceed guarantor’s pay if the principal the principal does not
obligations cannot or unable to pay, without regard to
pay his ability to do so
The amount specified in a surety bond as the
surety’s obligation does not limit the extent of the Insurer of the Insurer of the debt
damages that may be recovered from the solvency of the debtor
principal, the latter’s liability being governed by Does not contract that Pay the creditor
the obligations he assumed under his contract. the principal will pay, without qualification if
10. The existence of a guaranty is not presumed but simply that he is the principal debtor
(2055) able to do so does not pay. Hence,
the responsibility or
Guaranty requires the expression of consent on the part obligation assumed by
of the guarantor to be bound. It cannot be presumed the surety is greater or
because of the existence of a contract or principal more onerous than that
obligation. of a guarantor
Rationale:
1. There be assurance that the guarantor had the 13. On the guarantor (2056-2057)
true intention to bind himself;
2. To make certain that on making it, the guarantor 1. He possesses integrity;
proceeded with consciousness of what he was 2. He has capacity to bind himself;
doing. 3. He has sufficient property to answer for the
obligation which he guarantees.

11. A contract of guaranty is covered by the Statute Exception: The creditor waives the requirements
of Frauds
The qualifications above need only be present at the time
Guaranty must not only be expressed but must so be
of the perfection of the contract. The subsequent loss of
reduced into writing. Hence, it shall be unenforceable by
integrity or property or supervening incapacity of the
action, unless the same or some note or memorandum
guarantor would not operate to exonerate the guarantor
thereof be in writing, and subscribed by the party
of the eventual liability he has contracted, and the
charged, or by his agent; evidence, therefore, of the
contract of guaranty continues. The creditor can merely
agreement cannot be received without the writing, or a
demand another guarantor with the proper qualifications
secondary evidence of its contents. However, It need not
except that the creditor may waive such remedy if he
appear in a public document.
chooses and hold the guarantor to his bargain.

Selection of Guarantor:
GUARANTY DISTINGUISHED FROM WARRANTY

Page 3 of 7
 1. Specified person stipulated as guarantor:
Substitution of guarantor may not be demanded
Reason: The selection of the guarantor is:
a. Term of the agreement;
b. As a party, the creditor is, therefore,
bound thereby.
2. Guarantor selected by the principal debtor:
Debtor answers for the integrity, capacity, and
solvency of the guarantor.
3. Guarantor personally designated by the creditor:
Responsibility of the selection should fall upon the
creditor because he considered the guarantor to
have the qualifications for the purpose.
CHAPTER 2
EFFECTS OF GUARANTY
SECTION 1. - Effects of Guaranty
Between the Guarantor and the Creditor
Art. 2058. The guarantor cannot be compelled to pay the
creditor unless the latter has exhausted all the property of
the debtor, and has resorted to all the legal remedies
against the debtor. (1830a)
Art. 2059. The excussion shall not take place:
(1) If the guarantor has expressly renounced it;
(2) If he has bound himself solidarily with the debtor;
(3) In case of insolvency of the debtor;
(4) When he has absconded, or cannot be sued within
the Philippines unless he has left a manager or
representative;
(5) If it may be presumed that an execution on the
property of the principal debtor would not result in the
satisfaction of the obligation. (1831a)
Art. 2060. In order that the guarantor may make use of
the benefit of exclusion, he must set it up against the
creditor upon the latter's demand for payment from him,
and point out to the creditor available property of the
debtor within Philippine territory, sufficient to cover the
amount of the debt. (1832)
Art. 2061. The guarantor having fulfilled all the
conditions required in the preceding article, the creditor
who is negligent in exhausting the property pointed out
shall suffer the loss, to the extent of said property, for the
insolvency of the debtor resulting from such negligence.
(1833a)
Art. 2062. In every action by the creditor, which must be
against the principal debtor alone, except in the cases
mentioned in Article 2059, the former shall ask the court
to notify the guarantor of the action. The guarantor may
appear so that he may, if he so desire, set up such
defenses as are granted him by law. The benefit of
excussion mentioned in Article 2058 shall always be
unimpaired, even if judgment should be rendered against
the principal debtor and the guarantor in case of
appearance by the latter. (1834a)
Art. 2063. A compromise between the creditor and the
principal debtor benefits the guarantor but does not
prejudice him. That which is entered into between the
guarantor and the creditor benefits but does not prejudice
the principal debtor. (1835a)
Art. 2064. The guarantor of a guarantor shall enjoy the
benefit of excussion, both with respect to the guarantor
and to the principal debtor. (1836)
Art. 2065. Should there be several guarantors of only
one debtor and for the same debt, the obligation to
answer for the same is divided among all. The creditor
cannot claim from the guarantors except the shares which
they are respectively bound to pay, unless solidarity has
been expressly stipulated.
The benefit of division against the co-guarantors ceases in
the same cases and for the same reasons as the benefit of
excussion against the principal debtor. (1837)
EFFECTS OF GUARANTY BETWEEN THE GUARANTOR AND
THE CREDITOR
1. The guarantor has the right to benefit from
excussion/ exhaustion4
Exceptions to the benefit of excussion (2059)
1. As provided in Art. 2059:
a. If the guarantor has expressly renounced
it ;waiver is valid but it must be made in
express terms.
b. If he has bound himself solidarily with the
debtor, the liability assumed is that of a
surety. The guarantor becomes primarily
liable as a solidary co-debtor. In effect,
he renounces in the contract itself the
benefit of exhaustion5.
c. In case of insolvency of the debtor –
guarantor guarantees the solvency of the
debtor. If the debtor becomes insolvent,
the liability of the guarantor as the
debtor cannot fulfill his obligation
d. When he (debtor) has absconded, or
cannot be sued within the Philippines –
the creditor is not required to go after a
debtor who is hiding or cannot be sued in
our courts, and to incur the delays and
expenses incident thereto. The exception
is when the debtor has left a manager or
representative;
e. If it may be presumed that an execution
on the property of the principal debtor
would not result in the satisfaction of the
obligation – if such judicial action
including execution would not satisfy the
obligation, the guarantor can no longer
require the creditor to resort to all such
remedies against the debtor as the same
would be but a useless formality. It is not
necessary that the debtor be judicially
declared insolvent.
2. If he does not comply with Art. 2060: In order
that the guarantor may make use of the benefit
of excussion, he must:
a. Set it up against the creditor upon the
latter’s demand for payment from him;
b. Point out to the creditor:
i. Available property of the debtor
– the guarantor should facilitate
the realization of the excussion
since he is the most interested in
its benefit.
ii. Within the Philippine territory –
excussion of property located
abroad would be a lengthy and
extremely difficult proceeding
and would not conform with the
purpose of the guaranty to
4 SOUTHERN MOTORS, INC. v BARBOSA: “The right of
guarantors…to demand exhaustion of the property of the principal
debtor, exists only when a pledge or a mortgage has not been given as
special security for the payment of the principal obligation.”
5 LUZON STEEL CORP. v SIA: “The surety in the present case
bound itself "jointly and severally" (in solidum) with the defendant; and
excusion (previous exhaustion of the property of the debtor) shall not
take place "if he (the guarantor) has bound himself solidarily with the
debtor".”
Page 4 of 7
 provide the creditor with the
means of obtaining the
fulfillment of the obligation.
iii. Sufficient to cover the amount of
the debt.
3. If he is a judicial bondsman and sub-surety
(2084)
4. Where a pledge or mortgage has been given by
him as a special security.
5. If he fails to interpose it as a defense before
judgment is rendered against him.
2. The creditor has the right to secure a judgment
against the guarantor prior to the excussion
General rule:
An ordinary personal guarantor (NOT a pledgor or
mortgagor), may demand exhaustion of all the property of
the debtor before he can be compelled to pay.
Exception:
The creditor may, prior thereto, secure a judgment
against the guarantor, who shall be entitled, however, to
a deferment of the execution of said judgment against
him, until after the properties of the principal debtor shall
have been exhausted, to satisfy the latter’s obligation.
3. The creditor has the duty to make prior demand
for payment from the guarantor (2060)
1. The demand is to be made only after judgment on
the debt
2. Joining the guarantor in the suit against the
principal debtor is not the demand intended by
law. Actual demand has to be made.
4. The guarantor has the duty to set up the benefit
of excussion (2060)
As soon as he is required to pay, guarantor must also
point out to the creditor available property (not in
litigation or encumbered) of the debtor within the
Philippines.
5. The creditor has the duty to resort to all legal
remedies (2061)
a) After the guarantor has fulfilled the conditions
required for making use of the benefit of
exhaustion, it becomes the duty of the creditor
to:
b) Exhaust all the property of the debtor pointed out
by the guarantor;
c) If he fails to do so, he shall suffer the loss but
only to the extent of the value of the said
property, for the insolvency of the debtor.
6. The creditor has the duty to notify the guarantor
in the action against the debtor
Under this article, notice to the guarantor is mandatory in
the action against the principal debtor. The guarantor,
however, is not duty bound to appear in the case, and his
non-appearance shall not constitute default, w/ its
consequential effect.
Rationale:
The purpose of notification is to give the guarantor the
opportunity to allege and substantiate whatever defenses
he may have against the principal obligation, and chances
to set up such defenses as are afforded him by law if he
so desires
7. A compromise shall not prejudice the person not
party to it.
1. A compromise between creditor and principal
debtor benefits the guarantor but does not
prejudice him.
2. A compromise between guarantor and the
creditor benefits but does not prejudice the
principal debtor.
8. Co-guarantors are entitled to the benefit of
division (2065)
The benefit of division applies only when there are several
guarantors and one debtor for a single debt. Except when
solidarity has been stipulated among the co-guarantors, a
co-guarantor is liable only to the extent of his share in the
obligation as divided among all the co-guarantors.
SECTION 2. - Effects of Guaranty
Between the Debtor and the Guarantor
Art. 2066. The guarantor who pays for a debtor must be
indemnified by the latter.
The indemnity comprises:
(1) The total amount of the debt;
(2) 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;
(3) The expenses incurred by the guarantor after
having notified the debtor that payment had been
demanded of him;
(4) Damages, if they are due. (1838a)
Art. 2067. 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. (1839)
Art. 2068. If the guarantor should pay without notifying
the debtor, the latter may enforce against him all the
defenses which he could have set up against the creditor
at the time the payment was made. (1840)
Art. 2069. If the debt was for a period and the guarantor
paid it before it became due, he cannot demand
reimbursement of the debtor until the expiration of the
period unless the payment has been ratified by the
debtor. (1841a)
Art. 2070. If the guarantor has paid without notifying the
debtor, and the latter not being aware of the payment,
repeats the payment, the former has no remedy whatever
against the debtor, but only against the creditor.
Nevertheless, in case of a gratuitous guaranty, if the
guarantor was prevented by a fortuitous event from
advising the debtor of the payment, and the creditor
becomes insolvent, the debtor shall reimburse the
guarantor for the amount paid. (1842a)
Art. 2071. The guarantor, even before having paid, may
proceed against the principal debtor:
(1) When he is sued for the payment;
(2) In case of insolvency of the principal debtor;
(3) When the debtor has bound himself to relieve him
from the guaranty within a specified period, and this
period has expired;
Page 5 of 7
 (4) When the debt has become demandable, by
reason of the expiration of the period for payment;
(5) After the lapse of ten years, when the principal
obligation has no fixed period for its maturity, unless it be
of such nature that it cannot be extinguished except
within a period longer than ten years;
(6) If there are reasonable grounds to fear that the
principal debtor intends to abscond;
(7) If the principal debtor is in imminent danger of
becoming insolvent.
In all these cases, the action of the guarantor is to obtain
release from the guaranty, or to demand a security that
shall protect him from any proceedings by the creditor
and from the danger of insolvency of the debtor. (1834a)
Art. 2072. If one, at the request of another, becomes a
guarantor for the debt of a third person who is not
present, the guarantor who satisfies the debt may sue
either the person so requesting or the debtor for
reimbursement. (n)
EFFECTS OF GUARANTY BETWEEN THE DEBTOR AND THE
GUARANTOR
1. The guarantor has the right to be subrogated to
the rights of the creditor
A guarantor who pays the debt is entitled to every remedy
which the creditor has against the principal debtor, to
enforce every security and all means of payments; to
stand in the place of the creditor not only through the
medium of the contract, but even by means of the
securities entered into w/out the knowledge of the surety;
having the right to have those securities transferred to
him though there was no stipulation for it, and to avail
himself of all securities against the debtor
The need to enforce the provisions on indemnity in Article
2066 forms the basis for the subrogation clause of Article
2067. The assumption, however, is that the guarantor
who is subrogated to the rights of the creditor, has the
right to be reimbursed for his answering for the obligation
of the debtor. Absent this right of reimbursement,
subrogation will not be proper.
2. The guarantor has the duty to notify the debtor
before paying the creditor.
Should payment be made without notifying the debtor,
and supposing the debtor has already made a prior
payment, the debtor would be justified in putting up the
defense that the obligation has already been extinguished
by the time the guarantor made the payment. In this
case, the guarantor will lose the right of reimbursement
and consequently the right of subrogation as well.
3. The guarantor cannot make payment before the
obligation has become due.
General rule:
Since a contract of guaranty is only subsidiary, the
guarantor cannot be liable for the obligation before the
period on which the debtor’s liability will accrue. Any
payment made by the guarantor before the obligation is
due cannot be indemnified by the debtor.
Exception:
Prior consent or subsequent ratification by the debtor
4. The guarantor may proceed against the debtor
even before payment has been made
General rule:
Guarantor has no cause of action against the debtor until
after the former has paid the obligation.
Exceptions:
1. When he is sued for the payment;
2. In case of insolvency of the principal debtor;
3. When the debtor has bound himself to relieve him
from the guaranty within a specified period, and
this period has expired;
4. When the debt has become demandable, by
reason of the expiration of the period for
payment;
5. After the lapse of 10 years, when the principal
obligation has no fixed period for its maturity,
unless it be of such nature that it cannot be
extinguished except within a period longer than
10 years;
6. If there are reasonable grounds to fear that the
principal debtor intends to abscond;
7. If the principal debtor is in imminent danger of
becoming insolvent.
Rationale
To enable the guarantor to take measures for the
protection of his interest in view of the probability that he
would be called upon to pay the debt. As such, he may, in
the alternative, obtain release from the guaranty; or
demand security that shall protect him from any
proceedings by the creditor; and against the insolvency of
the debtor.
SECTION 3. - Effects of Guaranty as Between Co-
Guarantors
Art. 2073. When there are two or more guarantors of the
same debtor and for the same debt, the one among them
who has paid may demand of each of the others the share
which is proportionally owing from him.
If any of the guarantors should be insolvent, his share
shall be borne by the others, including the payer, in the
same proportion.
The provisions of this article shall not be applicable,
unless the payment has been made by virtue of a judicial
demand or unless the principal debtor is insolvent.
(1844a)
Art. 2074. In the case of the preceding article, the co-
guarantors may set up against the one who paid, the
same defenses which would have pertained to the
principal debtor against the creditor, and which are not
purely personal to the debtor. (1845)
Art. 2075. A sub-guarantor, in case of the insolvency of
the guarantor for whom he bound himself, is responsible
to the co-guarantors in the same terms as the guarantor.
(1846)
EEFECTS OF GUARANTY AS BETWEEN CO-GUARANTORS
Requisites for the applicability of Art. 2073:
1. Payment has already been made by one
guarantor;
2. The payment was made because
a. Of the insolvency of the debtor, or
b. By judicial demand
3. The paying guarantor seeks to be indemnified
only to the extent of his proportionate share in
the total obligation. For purposes of proportionate
reimbursement, the other guarantors may
interpose such defenses against the paying
guarantor as are available to the debtor against
the creditor, except those that are personal to the
debtor.
CHAPTER 3
EXTINGUISHMENT OF GUARANTY
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 A sub-surety in the same case, cannot demand the
Art. 2076. The obligation of the guarantor is extinguished exhaustion of the property of the debtor of the surety.
at the same time as that of the debtor, and for the same
causes as all other obligations. (1847)

Art. 2077. If the creditor voluntarily accepts immovable

or other property in payment of the debt, even if he
should afterwards lose the same through eviction, the
guarantor is released. (1849)

Art. 2078. A release made by the creditor in favor of one

of the guarantors, without the consent of the others,
benefits all to the extent of the share of the guarantor to
whom it has been granted. (1850)

Art. 2079. An extension granted to the debtor by the

creditor without the consent of the guarantor extinguishes
the guaranty. The mere failure on the part of the creditor
to demand payment after the debt has become due does
not of itself constitute any extention of time referred to
herein. (1851a)

Art. 2080. The guarantors, even though they be solidary,

are released from their obligation whenever by some act
of the creditor they cannot be subrogated to the rights,
mortgages, and preference of the latter. (1852)

Art. 2081. The guarantor may set up against the creditor

all the defenses which pertain to the principal debtor and
are inherent in the debt; but not those that are personal
to the debtor. (1853)

EXTINGUISHMENT OF GUARANTY

1. Once the obligation of the debtor is extinguished in any

manner provided in the Civil Code, the obligation of the
guarantor is also extinguished. However, there may be
instances when, after the extinguishment of the
guarantor’s obligation (as in the case of a release from
the guaranty), the obligation of the debtor still subsists.

2. Although the guarantor generally has to make payment

in money, any other thing of value, if accepted by the
creditor, is valid payment and therefore releases the
guarantor.

3. If one guarantor is released, the release would benefit

the co-guarantors to the extent of the proportionate share
of the guarantor released.

4. A guarantor is also released if the creditor, without the

guarantor’s consent, extends the time within which the
debtor may perform his obligation. This is to protect the
interest of the guarantor should the debtor be insolvent
during the period of extension and deprive the guarantor
of his right to reimbursement.

5. If through the fault of the creditor the guarantors are

precluded from being subrogated to the former’s rights,
the latter are released from the obligation.

CHAPTER 4
LEGAL AND JUDICIAL BONDS

Art. 2082. The bondsman who is to be offered in virtue of

a provision of law or of a judicial order shall have the
qualifications prescribed in Article 2056 and in special
laws. (1854a)

Art. 2083. If the person bound to give a bond in the

cases of the preceding article, should not be able to do so,
a pledge or mortgage considered sufficient to cover his
obligation shall be admitted in lieu thereof. (1855)

Art. 2084. A judicial bondsman cannot demand the

exhaustion of the property of the principal debtor.

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