A co-maker not liable for entire loan

Persida Acosta

Persida Acosta

Dear PAO,
My mother-in-law died five years ago leaving an unpaid loan balance with a local bank regarding a small lot near her house. My sister-in-law found the document with my mother-in-law as principal borrower and my sister-in-law as co-maker. The bank sued my sister-in-law for non-payment of the loan. She cannot pay the loan, as she is only a clerk in a small town. The lot in question is near our ancestral house. She told the bank to just foreclose the lot, but when it does, it will destroy part of our ancestral house for a right of way. I have neither seen nor read those documents regarding the unpaid balance, but I was told it has reached hundreds of thousands because of interests, penalties, etc. What should we do? Thank you.


Dear GM,
You and your sister-in-law must first look at the loan documents and review the terms of the loan. A co-maker while essentially liable for the loan is not necessarily liable for the entire loan. Article 1207 of the Civil Code states that, “The concurrence of two or more creditors or two or more debtors in one and the same obligation does not imply that each one of the former has a right to demand, or that each one of the latter is bound to render, entire compliance with the prestations.

There is a solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity.” If it is explicitly stated in the loan document that she is jointly and solidarily liable with the principal for the amount of the debt, then she becomes responsible for the entire debt. However, when there is nothing stated in the said document, then she can only be sued for half of the loan amount.

In addition, if your mother-in-law has also left an estate or properties left upon her death, the bank may also sue her estate to collect the debt.

As for your ancestral house, the bank cannot destroy it without asking for your permission or seeking our courts for a right of way. Article 619 of the Civil Code states that easements are either established by law or by will of the owners. Article 649 of the said law, also states that easements of right of way may be demanded after payment of the proper indemnity. If the easement established should be a permanent passage, indemnity shall consist of the value of the land occupied and the amount of damage caused to the servient estate. The bank must also establish that the easement which shall traverse your ancestral home is the point least prejudicial and is at the shortest distance to a public highway. If the easement that will affect your ancestral home is the point least prejudicial and the shortest to a public highway, then you must be compensated for the value of the property and for the damage to be caused to your home. Otherwise, you can refuse and oppose the establishment of the right of way.

We hope that we were able to enlighten you on the matter. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net


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