Nature Of The Benefit Of Excussion

The benefit of excussion is a right granted to the guarantor and, therefore, only he may invoke it at his discretion.

The benefit of excussion, as well as the requirement of consent to extensions of payment, is a protective device pertaining to and conferred on the guarantor. These may be invoked by the guarantor against the creditor as defenses to bar the unwarranted enforcement of the guarantee. However, Philguarantee did not avail of these defenses when it paid its obligation according to the tenor of the guarantee once demand was made on it.

When to invoke benefit of excussion.

The benefit of excussion may only be invoked after legal remedies against the principal debtor have been expanded. Thus, it was held that the creditor must be first obtain a judgment against the principal debtor before assuming to run after the alleged guarantor, “for obviously the ‘exhaustion of the principal’s property’ cannot even begin to take place before judgment has been obtained”. The law imposes conditions precedent for the invocation of the defense. Thus, in order that the guarantor may make use of the benefit of excussion, he must set it up against the creditor upon the latter’s demand for payment and point out to the creditor available property of the debtor within the Philippines sufficient to cover the amount of the debt. (Article 2060, NCC; JN Dev. Corp. vs. Phil. Export & Foreign Guarantee Corp., G.R. No. 151060, August 31, 2005).