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Ian Alfredo Magno

FINANCIAL constraints and hard-pressed times push most employees to often seek recourse through obtaining gargantuan loans.  And it is a common scenario in the workplace where an employee applying for a loan seeks his/her officemate to sign as a co-maker. “Gamay ra bitaw ni, ayaw kabalaka…” At times jokingly, “OK ra lagi, dili lagi ta ma-priso ani…” Very reassuring words, then one signs as such co-maker–which is expressly categorized in the contract as solidarily liable as a matter of practice nowadays.

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While local slang informally refers to such person as a “guarantor,” technically, he is legally recognized as a surety.

Article 2047 of the Civil Code of the Philippines provides, thus:

“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  a  person  binds  himself  solidarily  with  the  principal debtor, the provisions of Section 4, Chapter 3, Title I of this Book shall be observed.  In such case, the contract is called a suretyship.”

The big divide between a guarantor and surety is that the latter is bound solidarily; while the former is bound jointly only.  The surety is liable for the entire debt.  On the other hand, the guarantor may be held liable only for a certain portion of the principal debtor’s obligation.

Back to the co-maker/officemate scenario:  More often than not, spouses of said co-maker employees are not apprised about such matters and, therefore, have no knowledge that their better-halves had just bound themselves to pay an obligation, from which their household did not benefit a single grain at all – until one day a demand letter from the creditor is mailed to their doorstep.

In some very, very, very unfortunate instances, the conjugal property of the surety would be attached by virtue of a writ of attachment from the court, to be later sold at an auction; for its proceeds to be applied thereafter to satisfy the obligation of the principal debtor with his creditor.  And the surety’s spouse?  In utter shock!

What could the spouse of the surety do, to save their conjugal property from being auctioned?

He/she may file a third-party claim in the case which implicated their conjugal property, and plead to annul the levy on their conjugal property.  As a remedy, a third-party claim is available only to a third-party who is a stranger to the case.  While the spouse is intimately related to the surety – and, therefore, technically not a stranger – however, insofar as the legal suit vis-a-vis the principal debt is involved, the surety’s spouse is a stranger.  To qualify as such “stranger”, such spouse must emphasize and should clearly point out that the debt in contention did not redound to the direct benefit of their conjugal partnership/household.

Corollarily, in the case of Ching vs. Court of Appeals G.R. No. 124642 dated 23 February 2004, the Honorable Supreme Court pronounced that:

“No presumption can be inferred from the fact that when the petitioner-husband entered into an accommodation agreement or a contract of surety, the conjugal partnership would thereby be benefited. The private respondent (creditor) was burdened to establish that such benefit redounded to the conjugal partnership.”

Ultimately, in the case of Borlongan vs. Banco de Oro G.R. No. 218540 dated 5 April 2017, the Honorable Supreme Court reiterated, viz:

“To reiterate, conjugal property cannot be held liable for the personal obligation contracted by one spouse, unless some advantage or benefit is shown to have accrued to the conjugal partnership.”

(Lawyer Ian Alfredo T. Magno is based in Cagayan de Oro. E-mail: ianalfredom@gmail.com)

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