Leonard Van Domelen and Amy Van Domelen v. Westinghouse Electric Corporation, a Corporation

Leonard and Amy Van Domelen appeal from a judgment of the District Court entered upon a jury verdict finding them liable upon their joint written guaranty in favor of appellee.

The guaranty in question, dated January 7, 1964, was executed in Oregon in favor of the appellee, Westinghouse Electric Corporation, and by its terms guarantees payment of the account of Sharon Manufacturing Company with Westinghouse. Federal jurisdiction is grounded upon diversity of citizenship, so the substantive law of Oregon governs. [Erie R. Co. v. Tompkins, 304 U.S. 64 , 58 S.Ct. 817 , 82 L.Ed. 1188 (1938).]

Appellants’ first contention is that this guaranty failed to satisfy the expression-of-consideration requirement of the Oregon Statute of Frauds, which provides in part that:

Although the challenged instrument recites that it was executed “In consideration of your [Westinghouse] extending credit to Sharon Furniture Manufacturing Co., Inc. * * * and for value received”, appellants argue that this is an insufficient expression of the consideration for the guaranty here, since the consideration claimed by Westinghouse to have been given was not extension of credit, but a forbearance of suit…