Professional Documents
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2AA
Credit Transactions
Other causes under Art. 1231.The Article should make express reference to Article
1231 to carry the implication that there are other causes of extinguishing the contract of
deposit.
Art. 2071. The guarantor, even before having paid, may proceed against the
principal debtor:
xxx
(2) In case of insolvency of the principal debtor;
xxx
(7) If the principal debtor is in imminent danger of becoming insolvent.
The 2nd and 7th paragraph must be deleted precisely because a guarantor insures the
solvency of the debtor (Ong vs. PCIB, G.R. No. 160466. January 17, 2005). Hence, he binds
himself to pay if the principal debtor is unable to pay. A guarantor does not contract that the
principal debtor will pay but to ensure that he is able to do so.
The provisions mentioned runs counter to the very purpose of guaranty which is for the
creditor to proceed against the guaranty if the debtor defaults in his obligation. The guarantor
undertakes to answer for the debt of another person in case he is unable to pay.