Short answer. After ten years. Where the guaranteed obligation has no fixed maturity, Article 2071 lets the guarantor proceed against the principal debtor after the lapse of ten years — unless the obligation is of a nature that cannot be extinguished except within a longer period. The aim is release or security, not payment.
What the law says
even before having paid, may proceed against the principal debtor
Civil Code, Article 2071 — Guarantor's Action Before Paying. Read the full provision →
What the law says
After the lapse of ten years, when the principal obligation has no fixed period for its maturity, unless it be of such nature that it cannot be extinguished except within a period longer than ten years
Civil Code, Article 2071 — Guarantor's Action Before Paying. Read the full provision →
What the law says
the action of the guarantor is to obtain release from the guaranty, or to demand a security that shall protect him from any proceedings by the creditor and from the danger of insolvency of the debtor
Civil Code, Article 2071 — Guarantor's Action Before Paying. Read the full provision →
A guarantor is not powerless while waiting
A guarantor's exposure does not simply sit dormant until the creditor comes calling. Article 2071 lists seven situations in which the guarantor may take action against the principal debtor even before having paid anything — that is, before the creditor has demanded payment from the guarantor at all. The provision exists because guaranteeing an open-ended obligation can leave a guarantor tied to another person's debt indefinitely, and the law does not force him to wait passively while that liability hangs over him. Where the debt has no fixed maturity date, one of those seven grounds is aimed squarely at your situation.
The ten-year rule for open-ended debts
The relevant ground is the fifth. The guarantor may proceed After the lapse of ten years, when the principal obligation has no fixed period for its maturity, unless it be of such nature that it cannot be extinguished except within a period longer than ten years. So an open-ended guaranteed debt does not bind the guarantor forever. Once ten years have passed, he may act, even though the underlying obligation has no due date and the creditor may not have demanded anything. The ten-year mark is the point at which the law treats the guarantor's indefinite exposure as having gone on long enough to justify intervention.
What proceeding gets you: not payment
It is important to see what this action is for. The article says that in all these cases the action of the guarantor is to obtain release from the guaranty, or to demand a security that shall protect him from any proceedings by the creditor and from the danger of insolvency of the debtor. He is not suing the debtor to make him pay the creditor, and he is not recovering money he has not yet laid out. He is asking to be freed from the guaranty, or to be given security that shields him. The relief is protective — it addresses the guarantor's own precarious position rather than settling the principal debt.
The exception, and what to do
The one qualification is the nature of the obligation. If the guaranteed debt is of a kind that by its nature cannot be extinguished within ten years, the ten-year trigger does not apply, and the guarantor must look to another of the seven grounds instead. So before acting, two things are worth pinning down: that the obligation genuinely has no fixed maturity, and that it is not one that must run longer than ten years. Where both hold and a decade has elapsed, the guarantor's remedy is to go to court seeking release from the guaranty or protective security, not repayment.
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.
- Autocorp Group, et al. vs. Intra Strata Assurance Corp, et al, G.R. No. 166662, June 27, 2008 — read the decision on LawPhil →
- Special Steel Products, Inc. vs. Lutgardo Villareal, et al, G.R. No. 143304, July 8, 2004 — read the decision on LawPhil →
- Rizal Commercial Banking Corporation vs. Teodoro G. Bernardino, G.R. No. 183947, September 21, 2016 — read the decision on LawPhil →