Short answer. Yes. The law expressly allows a conditional obligation to be secured by a guaranty, the same way a guaranty may cover a future debt whose exact amount is not yet known. The guarantor simply cannot be pursued until the condition happens and the debt actually becomes due and liquidated.
What the law says
A conditional obligation may also be secured.
Civil Code, Article 2053 — Guaranty of Future Debts. Read the full provision →
Conditional obligations can be guaranteed
The Civil Code states plainly that a conditional obligation may also be secured by a guaranty. This means a guarantor can bind themselves in advance to answer for a debt that does not yet exist as a firm obligation because it depends on some future, uncertain event — for example, an obligation that only arises if a shipment fails to arrive, if a bidder wins a contract, or if some other condition set out in the underlying agreement comes to pass. The guarantor's commitment attaches to the obligation as a whole, condition and all, from the moment the guaranty is given.
Guaranteeing future and unliquidated debts
This same article also allows a guaranty to secure future debts, the amount of which is not yet known, which works alongside the rule on conditional obligations: in both situations, the guarantor commits to a debt before its final shape is settled. What the law does not allow is for the creditor to go after the guarantor while the debt remains unliquidated — there can be no claim against the guarantor until the debt is liquidated, meaning its existence and exact amount have been determined. A conditional debt works the same way in substance: the guaranty exists from signing, but the guarantor's actual exposure only crystallizes once the condition occurs and the amount owed is fixed.
What this means for someone asked to guarantee a conditional debt
Agreeing to guarantee a conditional obligation means accepting an open-ended commitment whose real weight will not be known until the triggering event happens, and possibly not for some time afterward. Because the guaranty attaches at signing, a guarantor cannot later argue the guaranty is void simply because the underlying debt was conditional or its amount unknown at the time. Anyone asked to stand as guarantor for this kind of obligation should understand exactly what condition triggers the debt and, where possible, what range the resulting liability could fall into, since the law does not require the amount to be fixed before the guaranty becomes binding — only before the creditor can actually collect.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Mario C. Tan and Erlinda S. Tan vs. United Coconut Planters Bank, G.R. No. 213156, July 29, 2019 — read the decision on LawPhil →
- Mariano Lim vs Security Bank Corporation, G.R. No. 188539, March 12, 2014 — read the decision on LawPhil →
- Philippine Charity Sweepstakes Office (PCSO) vs. New Dagupan Metro Gas Corporation, et al, G.R. No. 173171, July 11, 2012 — read the decision on LawPhil →
- Bank of Commerce and Stephen Z. Taala vs. Spouses Andres and Eliza Flores, G.R. No. 174006, December 8, 2010 — read the decision on LawPhil →