Vaughn

This action is upon a guaranty executed by defendant in favor of plaintiff. Judgment was given in favor of defendant, from which plaintiff appeals. The case was tried upon an agreed statement of facts and a bill of exceptions.

In 1928 one J. R. Vaughn, a cousin of respondent, established in Berkeley a retail clothing business conducted under the name of “Vaughn-at-Sather Gate”. It was agreed between him and appellant that appellant would provide him with the greater part of the merchandise needed in his business. The said merchandise was to be sold him on credit, and to induce appellant to extend such credit respondent executed a guaranty on November 16, 1928, guaranteeing, up to the sum of $6,000, payment to appellant of all indebtedness which J. R. Vaughn should incur for merchandise purchased from appellant. Early in 1930 the indebtedness of J. R. Vaughn for merchandise purchased from appellant amounted to some $19,000. About that time appellant and J. R. Vaughn concluded to form a corporation to conduct said business. A corporation was thereupon formed, known as “Vaughn-at-Sather Gate Ltd.”, all of its stock being issued to J. R. Vaughn, who placed it as a pledge with…