My mother signed as a co-maker in a loan. Can she be immediately made to pay by the creditor in case the debtor should fail to pay?
The extent of the liability of your mother shall depend on the terms of the contract that she signed when she agreed to secure the debt or obligation of another by being a co-maker. She could be a guarantor if she only binds herself to the creditor to fulfill the obligation of the principal debtor in case the latter should fail to do so. On the other hand, if she binds herself solidarily with the principal debtor, her liability will be that of a surety (Article 2047, Civil Code of the Philippines).
If your mother signed as a guarantor, she is only considered the insurer of the solvency of the debtor. Simply stated, she guarantees to the creditor that she will pay the obligation in case the principal debtor should fail to do so. Being a guarantor, your mother, as a rule, cannot be compelled to pay to the creditor unless the latter exhausted first all the properties of the debtor and has resorted to all the legal remedies against the debtor. This rule, however, shall not apply to the following instances: 1) if the guarantor has expressly renounced it; 2) if he has bound himself solidarily with the debtor; 3) in case of solvency 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. (Article 2059, Ibid.)
On the other hand, if your mother signed as a surety, she is regarded as an insurer of the debt and as such, she undertakes that the debt shall be paid. Being a surety, she may be compelled by the creditor to pay the debt without regard to the financial capability of the principal debtor. Since a surety is equally and solidarily bound with the principal debtor, the creditor is also not required to resort and exhaust all his remedies first against the principal debtor before proceeding against the surety (Palmares vs. Court of Appeals, GR No. 126490, March 31, 1998).
We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts that 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 firstname.lastname@example.org