Opinion ID: 542852
Heading Depth: 3
Heading Rank: 1

Heading: Conditional Provisions

Text: 42 The Loan Agreement reads in its pertinent parts: 43 If the Borrower defaults in the payment of any of the described obligations held by the Lender, the Warranter jointly and severally agrees to pay such sums to the Lender, its successors, and assigns on demands, subject to the limitations as to time and amount provided for in this document, except that this obligation shall be enforceable against the Warranter after proceeding against the Borrower and against the security as collateral held by Lender. (emphasis added). 8 44 The district court determined that in light of Codfish's bankruptcy proceeding, in the instant case, it was not possible to proceed against the borrower in the normal course. The court found that, by becoming a party to the bankruptcy proceedings, its only available forum, the FDIC complied with the covenant of proceeding against the warrantor after proceeding against the lender. We agree. 45 Moreover, not only did the FDIC comply with the above covenant or condition but the jointly and severally clause is construed to mean that the guarantees bind the Municipality in solido. See Credito y Ahorro Ponceno v. Beiro, 31 P.R.R. 605 (1923). In the case at bar, the debtor filed for bankruptcy before the suit to enforce the guarantees was filed. As such, the lender or its successor is not required to proceed first against the property of the principal debtor. Instead, the Supreme Court of Puerto Rico has established that the lender may sue the in solido guarantor in an independent enforcement action. Camara Insular v. Anadon, 83 P.R.R. 360, 365 (1961) (A creditor, who has filed a bankruptcy proceedings against the principal debtor is not precluded from filing the action of debt against the in solido codebtor). See also 31 L.P.R.A. Sec. 4892. This is precisely what the FDIC did.