Severino v.

Severino, 56 Phil 187 (1931)

Facts:
Fabiola Severino and her husband Ricardo Vergara filed a lawsuit in Iloilo to recover P20,000
from Guillermo Severino, with Enrique Echaus acting as the guarantor. The trial court ruled in favor of
the plaintiffs, ordering the recovery of the P20,000 from Guillermo Severino's property, and if
insufficient, from Echaus as the guarantor. Echaus appealed the judgment, while Guillermo Severino did
not.

Fabiola Severino is the recognized natural daughter of Melecio Severino, who left significant
property upon his death. To settle the ensuing litigation over the estate, Guillermo Severino agreed to
pay P100,000 to Felicitas Villanueva and Fabiola Severino in installments, with Echaus as the guarantor.
Only P40,000 was paid initially in 1924, and Fabiola Severino is entitled to the remaining P20,000.

Although Fabiola's status as Melecio's natural daughter was not initially recognized, a judicial
decree confirming this was issued in 1925, rendering a stipulation regarding a deposit irrelevant. The
main defense presented by Echaus was that he received no consideration for his guarantor role and the
contract lacked consideration for him.

Issue:
Whether or not a consideration necessary to be a party in a guaranty?

Ruling:
No, a consideration is not necessary.

A guarantor or surety is bound by the same consideration that makes the contract effective between
the principal parties thereto. (Pyle vs. Johnson, 9 Phil., 249.) The compromise and dismissal of a lawsuit is
recognized in law as a valuable consideration; and the dismissal of the action which Felicitas Villanueva and
Fabiola Severino had instituted against Guillermo Severino was an adequate consideration to support the
promise on the part of Guillermo Severino to pay the sum of money stipulated in the contract which is the
subject of this action. The promise of the appellant Echaus as guarantor therefore binding. It is never
necessary that the guarantor or surety should receive any part of the benefit, if such there be, accruing to his
principal. But the true consideration of this contract was the detriment suffered by the plaintiffs in the former
action in dismissing that proceeding, and it is immaterial that no benefit may have accrued either to the
principal or his guarantor.