My friend, Marian, convinced me to sign a document where I will be her guarantor in a contract of loan with a certain lending company. We signed a promissory note where we promised to pay the lending agency the amount that Marian borrowed from them. Last year, the lending agency demanded that I pay them the amount borrowed by Marian but I refused and told them that I am only a guarantor and they should go after Marian first before they can collect from me. To my dismay, the lending company initiated a collection case against me. Please guide me on this matter.
It seems that what you have really agreed upon is a solidary obligation based on the facts stated in your letter. A contract of guaranty is different from a solidary obligation. Under Article 2017 of the New Civil Code of the Philippines, it is stated that:
“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 the person binds himself solidarily with the principal debtor, the provisions of Section 4, Chapter 3, Title 1 of this book shall be observed. In such case the contract is called suretyship.”
Correlative thereto is Article 1207 of the same code that states: “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”.
The wording of the promissory note you and Marian signed expressly stated that both of you promised to pay the lending agency; hence, you are solidarily liable with Marian.
In solidary obligation or pursuant to 1216 of the code, “the creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully paid.” In your case, it is within the discretion of the lending company to collect from you or from Marian the payment of the loan.
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to enlighten you on the matter.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to firstname.lastname@example.org