Kilbride v. Moss

Citations

• 113 Cal. 432
• 45 P. 812
• 1896 Cal. LEXIS 806

Syllabus

<p>Corporations—Purchase op Capital Stock — Verbal Guaranty by Stockholders—Statute oe Frauds—Original Contract.—Where a purchase is made of the capital stock of a corporation, at the request of a large stockholder therein, who, in order to induce the purchase, verbally promised the purchaser to return the money paid by him if the stock should become worthless, such promise is not collateral to any obligation of the corporation to the purchaser, and is not void as being a verbal contract of guaranty, or a verbal agreement to answer for the debt, default, or miscarriage of another, but is an original contract, which need not be in writing, and upon which the stockholder making the promise is liable to the purchaser.</p> <p>Id. — Nature oe Guaranty — Collateral Undertaking — Original Promise.—A contract of guaranty is a collateral undertaking, and cannot exist without the presence of a main or substantive liability to which it is collateral; and, where there is no primary liability of a third person to the promise, which continues after the contract is made, the contract cannot be one of guaranty, but is an original promise, which need not be in writing.</p>