In Gilinsky v. Klionsky, 140 Misc. 724, 251 N.Y.S. 570 (Sup. Ct. Broome Co. 1931) court held that defendant's oral promise that if plaintiffs guaranteed the notes of his brother ("Israel"), defendant would then indemnify the plaintiffs against loss was not within the Statute of Frauds.
In Gilinsky, the plaintiffs became guarantors on Israel's notes and when Israel defaulted they were required to pay Israel's creditors.
In holding that defendant's promise was not within the Statute of Frauds, the Gilinsky Court held as follows:
The defendant's promise was not to pay the indebtedness of his brother Israel to the banks; his promise was to pay an indebtedness not in existence, but which would come into existence if and when these plaintiffs as guarantors of the banks indebtedness were required to pay and did pay that indebtedness. (Gilinsky, 140 Misc. at 725-726, cited in Barclays, 517 F. Supp. at 414.)