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LAW OF OBLIGATIONS
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fulfilled or if subsequently one of the co-sureties is released from his
liability by the creditor, or if his undertaking is declared invalid.
Where several persons have independently agreed to stand surety for
the same principal obligation, each of them is liable for the whole amount
of the obligation. However, unless otherwise agreed, a surety who pays
the whole amount of the obligation has a right of recourse against the
others for their respective shares.
Collateral Surety and Counter-Surety
According to Article 588 TCO, a collateral surety who stands to the
creditor for performance of the obligation assumed by the primary surety
is liable together with the latter in the same way as a simple surety is
liable with the principal debtor.
A counter surety acts as guarantor for the right of recourse of the
surety against the debtor.
Conclusion
The types of Contract of Suretyship are named in the TCO as i)
simple surety ii) joint and several surety iii) co-surety and iv) collateral
surety and counter-surety.
Pursuant to Article 585 TCO, the creditor cannot enforce a suretyship
agreement before suing the principal debtor.
Article 586 TCO stipulates that in a situation of joint and several
surety, if the surety stands as guarantor for an obligation by appending the
words “joint and several” in the contract, then the creditor may resort to
the guarantor before suing the principal debtor.
Pursuant to Article 587, in a co-surety, where two or more persons
serve as guarantors for the same obligation, each of them is liable as
surety for their share and as collateral surety for the shares of the others.
According to Article 588 TCO, a collateral surety who guarantees
the performance of the obligation assumed by the primary surety is liable
together with latter in the same way that a simple surety is liable for the
principal debtor.