What is the benefit of excussion in Philippine law?

Answer

The benefit of excussion (also called the benefit of exhaustion) is the guarantor's right not to be compelled to pay the creditor until all the property of the debtor has been exhausted and the creditor has resorted to all the legal remedies against the debtor (Civil Code Article 2058). It reflects the subsidiary character of a guaranty.

The benefit does not arise, however, in the situations listed in Article 2059 — among them, where the guarantor has expressly renounced it, where he has bound himself solidarily with the debtor (that is, as a surety), or where the debtor is insolvent. A surety, being solidarily liable, cannot invoke excussion at all.

Sources & further reading

• Civil Code Art. 2058 — benefit of excussion
• Civil Code Art. 2059 — when excussion does not apply
• Full report: guaranty & suretyship

Cases on this topic

• General Indemnity v. Alvarez
• Higgins v. Sellner
• JN Development Corp. v. PhilGuarantee
• Machetti v. Hospicio de San Jose
• Manila Surety & Fidelity Co. v. Batu Construction
• Palmares v. Court of Appeals
• Tañedo v. Allied Banking Corporation
• Valencia v. Leoncio

Related questions

• What is the difference between a guaranty and a suretyship in the Philippines?