- Statute
- Civil Code
- Article
- Art. 2071
- Topic
- Effects of Guaranty
- Status
- In force
- Book
- BOOK IV Obligations and Contracts
- Title
- TITLE XV GUARANTY
- Chapter
- CHAPTER 2 Effects of Guaranty
- Formerly
- Art. 1834a of the old Civil Code
- Year
- 1949
- Cited by
- Multiple Supreme Court decisions
The provision
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; (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)
Intellegal Wiki · In plain terms
A guarantor may act against the principal debtor even before paying anything, in situations such as being sued for payment, the debtor's insolvency, expiry of an agreed period to be relieved of the guaranty, the debt falling due, ten years passing on an open-ended obligation, fear the debtor will abscond, or imminent insolvency. What the guarantor can seek is release from the guaranty or security protecting against the creditor and the debtor's insolvency.
An editorially maintained plain-language explanation of this provision — not legal advice.
Intellegal Wiki · How the courts apply it
In Manila Surety & Fidelity Co. v. Batu Construction, the Supreme Court held: Reversed the dismissal, holding that Article 2071 of the Civil Code — allowing one sued for payment to demand security or release from the principal debtor — is available to a surety and not just to a guarantor, since a surety assumes greater liability than a guarantor.
One leading Supreme Court case applying this provision.
Cases applying this article
- Special Steel Products v. Lutgardo Villareal
- Autocorp Group v. Intra Strata Assurance Corporation
- General Indemnity v. Alvarez G.R. No. L-9434
- Manila Surety & Fidelity Co. v. Batu Construction G.R. No. L-9353