Short answer. In a true guaranty, yes. Article 2058 says the guarantor cannot be compelled to pay unless the creditor has exhausted all the property of the debtor and resorted to all the legal remedies against him. But the guarantor has to claim that benefit, and it is easily lost.

What the law says

The guarantor cannot be compelled to pay the creditor unless the latter has exhausted all the property of the debtor, and has resorted to all the legal remedies against the debtor.

Civil Code, Article 2058 — Benefit of Excussion. Read the full provision →

Guaranty is a second line, not a joint one

The benefit of excussion is what makes a guaranty subsidiary. Under Article 2047 a guarantor binds himself to fulfil the obligation only in case the latter should fail to do so, and Article 2058 turns that into a defence: no compulsion to pay until the creditor has exhausted the debtor's property and used the remedies available against him. So a lender who writes to the guarantor on the first missed payment, having done nothing about the borrower, is asking rather than demanding. The order of pursuit is part of the bargain, not a courtesy.

You must raise it, and point somewhere

The benefit is not applied for you. Article 2060 requires the guarantor to set it up against the creditor upon the latter's demand for payment, and to point out available property of the debtor within Philippine territory sufficient to cover the amount of the debt. Both halves matter: raise it late and it is gone, raise it without identifying assets and it does nothing. Article 2061 supplies the reward for doing it properly — a creditor who is negligent in exhausting the property pointed out bears the loss to the extent of that property if the debtor later becomes insolvent.

Who gets sued

Article 2062 provides that the creditor's action must be against the principal debtor alone, save in the cases mentioned in Article 2059, and that the creditor shall ask the court to notify the guarantor of the action. The guarantor may then appear and set up the defences the law gives him, and the article is explicit that his benefit of excussion remains unimpaired even if judgment is rendered against both. Appearing to defend the case does not by itself convert a subsidiary liability into an immediate one.

Why most people find they have no benefit at all

Article 2059 removes excussion in five situations: express renunciation, binding oneself solidarily with the debtor, insolvency of the debtor, his absconding or being beyond suit here without a representative, and where execution against his property may be presumed futile. The first two are printed as standard clauses in bank and financing documents, which is why a person who signed as co-maker gets a different answer from a person who signed a plain guaranty. The clause that waives excussion and solidarity is the one to look for in your copy.

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.

Related provisions

Note. Statute text quoted on this page is reproduced from the official enactment and is linked to the full provision. The explanation around it is general legal information from Vivas & Nobles Law Office, not legal advice. Whether it applies to your situation depends on facts only a lawyer reviewing them can assess.