Short answer. Co-guarantors lose the right to have the debt divided among them in the same situations that would deprive a guarantor of the benefit of excussion — for instance, when they waived it, when they are insolvent, or when they cannot be sued in the Philippines.
What the law says
The benefit of division against the co-guarantors ceases in the same cases and for the same reasons as the benefit of excussion against the principal debtor.
Civil Code, Article 2065 — Benefit of Division. Read the full provision →
What the benefit of division means
When several guarantors jointly secure the same debt of one debtor, the law treats their liability as divided. Article 2065 states that the creditor cannot claim from the guarantors except the shares which they are respectively bound to pay, unless they agreed to be solidarily liable. In plain terms, each co-guarantor is responsible only for his proportionate share — the creditor cannot chase any single guarantor for the whole amount simply because the others are harder to find.
When solidarity changes everything
The benefit of division is a default rule, not an absolute one. It disappears if the guarantors expressly stipulated solidarity among themselves. In practice, many surety agreements and bank guarantee forms include a solidary clause. If you signed such a clause, the creditor may demand full payment from any one of you and you cannot insist that it first collect proportionate shares from the others.
The mirrored rule: when the benefit is lost
Article 2065 ties the fate of the benefit of division directly to the benefit of excussion — the right to demand that the creditor first go after the principal debtor's property. The division right ceases in the same cases and for the same reasons as excussion ceases. Those reasons include: the co-guarantor renounced the benefit in advance; the co-guarantor is insolvent; the co-guarantor cannot be sued in the Philippines; or it may be presumed that execution on the principal debtor's property will not satisfy the debt. When any of these conditions applies to a particular co-guarantor, that person cannot invoke division.
Practical meaning for you
If a co-guarantor has fled the country, become bankrupt, or waived the benefit in the contract, the creditor may collect that person's share from the remaining guarantors. The remaining co-guarantors are not left without recourse — they may seek reimbursement from the defaulting co-guarantor and, ultimately, from the principal debtor. But in the immediate confrontation with the creditor, they cannot use the absent co-guarantor's insolvency as a shield to reduce what the creditor demands from them.
What to review in your contract
Check your guaranty agreement for two clauses: one that says 'solidarily' or 'jointly and severally,' and another that waives the benefits of excussion and division. Both are common in commercial lending. If either is present, the proportionate-share protection is gone. If neither appears, you retain the benefit of division — but only as to co-guarantors who are solvent, reachable in the Philippines, and who did not personally waive it. A lawyer can review the specific wording and advise on your exposure.
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.
- Orix Metro Leasing and Finance Corporation vs. Cardline, Inc., Mary C. Calubad, Sony N. Calubad, and the Heirs of Ng Beng Sheng, Puring C. Ng, et al, G.R. No. 201417, January 13, 2016 — read the decision on LawPhil →