Concepcion is a self made millionaire who made her fortune producing and exporting foodstuffs to Filipino stores in Canada. Due to her present status as a wealthy exporter of goods, she found herself being accepted and invited in the party scenes of Metro Manila’s new rich.   
 
In one of the occasions she attended, Concepcion was introduced to Bert, who according to her friends made his pile of money as the newest financial and real estate wizard of the decade.  Intrigued by his status and charm, she accepted his invitation to have dinner. 
 
Actually more interested in learning how to acquire more wealth than having a fling, Concepcion accepted Bert’s invitation to dinner the following evening.  While sipping wine in one of Manila’s five star resto, she learned that Bert, through his banking connections was able to acquire foreclosed real properties and resell or “flip” them in a few months for more than double the price.  Cruising with him in his Mercedes Benz, Bert showed Concepcion his newly acquired properties which according to him were undergoing minor “cosmetic” renovations. Bert even stopped and went down on one of the jobsites and talked briefly to one of the workers.  “I bought this one for just over a million and I already have a buyer for three million after a spending less than a hundred thousand on repairs” Bert said as he alighted from his car.
 
Seeing the opportunity to make more money, Concepcion did not lose time to ask Bert for a piece of the action.  Bert merely smiled and told her he will see if he could “accommodate” her request.  After almost a week of waiting for a call on her cell phone, Concepcion finally received a call from Bert who told her of a “prospect” where both of them can potentially make at least one million pesos each on a three million peso investment. The scheme was simple; Bert will acting from “tip” from his banking connections, will the buy the property from the owner before it is foreclosed by the bank. 
 
Bert admitted to Concepcion that he already has 5 prospective buyers for this property but  since he has several ongoing projects he already” maxxed” out his credit and needs “ a guarantor” for the loan he needs for this property. Bert even said that the owner might even agree to give a 10 percent bonus upfront which he plans to share with her once the loan is released.  With a ready profit on hand and the prospect of a hefty profit, Concepcion was more than willing to sign the “dotted line”as a guarantor.  This transaction was repeated several times in a span of less than a month and Concepcion found herself being a guarantor to Bert’s loans in the total amount of over twenty million big ones.  Being with Bert almost on a daily basis either in his mansion in Valle Verde, Pasig City or in the lobby of a 5 star hotel in Makati, Concepcion had no reason to suspect anything, She was always with him when Bert visits the jobsites and talks briefly with a worker. Not wanting to ruin her expensive Pradas, she never went out of the car to the muddy construction sites to see or hear what was going on. Often, she overhears Bert receiving calls in his blackberry from prospective buyers for their “real properties”.   
 
Everything seems to be going smoothly until Bert told her that he will be leaving for abroad for a few days to check on his overseas investments. Bert did not come back as promised and the weeks that followed were a nightmare.  Letters started pouring in from banks demanding payment for the overdue loans she guaranteed.  Apparently Bert did not pay the amortizations for the loan she guaranteed.  Apparently, he was able to acquire the properties with very minimal downpayments on account of Concepcion’s impeccable credit standing and assets. To compound her problems, Concepcion was not on any of the titles of the properties and that the purchase price of the properties were overvalued to almost double their market price. She almost fainted when she later learned that his mansion in Valle Verde and the luxury cars were all merely leased and owned by another individual.   In short, Bert, pulled  a fast one on Concepcion and his other victims.
 
Concepcion wrote back to the banks stating that she should not be held liable for the loans as she merely accommodated Bert in his loan applications.  To make a long story short, the banks brought Concepcion to court.
 
AS A GUARANTOR, CONCEPCION MAY BE MADE LIABLE
TO PAY THE LOANS SHE GUARANTEED FOR BERT THE SWINDLER
 
Whether it be for a small loan, a mortgage or just to help a friend get a credit card application approved, signing your name as guarantor can make you liable to pay a part or even the entire debt.
 
Philippine laws on Guaranty are simple and needs no further interpretation. Article 2047 of the New Civil Code of the Philippines 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
 
By signing as guarantor, Concepcion bound herself to pay the loans of Bert in case he fails to pay. This situation may also happen even outside the Philippines as laws concerning Guaranty are usually universal in nature.  Hence  a contract of Guaranty for any loan or undertaking entered in Canada may also have the same effects as that provided above. 
 
So before signing your name as guarantor in behalf of a casual acquaintance….… THINK TWICE.

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(Legal Disclaimer: This article is designed for general information only. The information presented at this site should not be construed to be neither formal legal advice nor the formation of a lawyer/client relationship.)
 
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Atty Ferdie Aguirre may be reached at
(403) 6131168 /403 4747168
or at pilipinolegalservices@yahoo.ca

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