Short answer. Usually yes. A co-maker who signed solidarily loses the benefit of excussion under Article 2059, so the lender may collect the whole balance from him without first exhausting the borrower's property. What the form calls you matters far less than the solidarity clause you signed under.
What the law says
The excussion shall not take place: (1) If the guarantor has expressly renounced it; (2) If he has bound himself solidarily with the debtor
Civil Code, Article 2059 — When Excussion Does Not Apply. Read the full provision →
The protection exists, and then is taken away
Article 2058 gives a guarantor a real defence: he cannot be compelled to pay until the creditor has exhausted all the property of the debtor and resorted to all the legal remedies against him. Article 2059 then lists the five situations in which that protection simply does not arise — If the guarantor has expressly renounced it, if he bound himself solidarily with the debtor, if the debtor is insolvent, if the debtor has absconded or cannot be sued here, and where an execution against the debtor's property can be presumed to be futile. The first two are the ones printed into loan forms.
Solidary means the lender chooses
Article 2047 draws the line. A guarantor binds himself to answer if the debtor fails; but a person who binds himself solidarily with the principal debtor is a surety, and the rules on solidary obligations govern instead. The creditor may then sue whichever of them looks most collectible, for the whole amount, on the day after default. That the borrower still owns a car, a lot or a business is legally beside the point. This is why the honest answer to most co-makers is unwelcome: the bank does not have to try him first.
Read the clause, not the label
Nothing turns on whether the document says co-maker, co-borrower, surety or guarantor. What decides it is the sentence in which you undertook the obligation — whether it makes you jointly and severally, or solidarily, liable, and whether it contains an express waiver of excussion and of notice. Those lines are usually a few words long and buried in a paragraph of undertakings. If you are being asked to sign one now, that is the sentence to read; if you have already signed, obtaining a complete copy is the first useful step.
Paying is not the end of it
Being made to pay another person's debt does not mean absorbing it. Article 2066 entitles the guarantor who pays to be indemnified by the debtor for the total amount of the debt, legal interest from the time the payment was made known to him, expenses and damages where due. Article 2067 goes further and subrogates the payer to all the rights the creditor had against the debtor, which can include the securities held for the loan. So a co-maker's real exposure is the risk that the borrower cannot pay him back either.
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.
- Trade and Invesment Development Corporation of the Philippines also known as Philippine Export-Import Credit, G.R. No. 233850, July 1, 2019 — read the decision on LawPhil →
Related provisions
- Civil Code, Article 2059 — When Excussion Does Not Apply
- Civil Code, Article 2058 — Benefit of Excussion
- Civil Code, Article 2047 — Guaranty and Suretyship
- Civil Code, Article 2066 — Guarantor's Right to Indemnity
- Civil Code, Article 2067 — Guarantor's Subrogation