Contract of guaranty does not automatically fall under obligations that redound to benefit of family

Dear PAO,

During our marriage, my husband acted as a guarantor for Dindo’s debt. After the untimely death of my husband last month, the creditor, unable to collect from Dindo, told me that he would file his claim in the settlement of the estate of my husband. According to the creditor, it is presumed that the debt was redounded to the benefit of our family when my husband acted as a guarantor for the debt of Dindo. Is this correct?

Orlanda

Dear Orlanda,

Generally, debts contracted by the husband or wife that are redounded to the benefit of the family may be chargeable to the absolute community or the conjugal partnership. This is in accordance with Article 94 and Article 121 of the Family Code of the Philippines, which provide that the property/conjugal partnership shall be liable for:

“xxx

“(2) All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the community, or by both spouses, or by one spouse with the consent of the other;

“(3) Debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have been benefited; xxx

“(7) Ante-nuptial debts of either spouse insofar as they have redounded to the benefit of the family xxx.”

On the other hand, a contract of guaranty is governed by Article 2047 of the New Civil Code of the Philippines, which provides that:

“Art. 2047. By guaranty a person, called the guarantor, binds himself to the creditor to fulfill the obligation of the principal debtor in case the latter should fail to do so.xxx”

It cannot be construed that the contract of guaranty entered into by your husband automatically redounded to the benefit of your family. This is precisely the judicial pronouncement in the case entitled Philippine National Bank v. Reyes, GR 212483. Oct. 5, 2016, where the Supreme Court, through Associate Justice Marvic M.V. F Leonen, stated:

“(B) On the other hand, if the money or services are given to another person or entity, and the husband acted only as a surety or guarantor, that contract cannot, by itself, alone be categorized as falling within the context of ‘obligations for the benefit of the conjugal partnership.’ The contract of loan or services is clearly for the benefit of the principal debtor and not for the surety or his family. No presumption can be inferred that, when a husband enters into a contract of surety or accommodation agreement, it is ‘for the benefit of the conjugal partnership.’ Proof must be presented to establish benefit redounding to the conjugal partnership

“There are two scenarios considered: one is when the husband, or in this case, the wife, contracts a loan to be used for the family business, and the other is when she acts as a surety or guarantor. If she is a mere surety or guarantor, evidence that the family benefited from the loan needs to be presented before the conjugal partnership can be held liable. On the other hand, if the loan was taken out to be used for the family business, there is no need to prove actual benefit. The law presumes the family benefited from the loan, and the conjugal partnership is held liable.”

Applying the afore-cited decision in your situation, evidence is necessary in order to prove that the contract of guaranty entered by your deceased husband redounded to the benefit of your family before the same can be charged against the absolute community of property or conjugal partnership of gains. The contract of loan is for the benefit of Dindo (debtor) and not for the guarantor/surety (your husband), or his family. Thus, the claim of the creditor that the debt contracted by Dindo benefited your family the moment your deceased husband acted as a guarantor has no legal basis to support the same.

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated on.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected]