American Savings Bank v. Waschkat

CARTER, Justice.

The plaintiff, American Savings Bank (the bank), appeals from an order of the district court which reduced the amount of a judgment it recovered against appellee, Janice Waschkat, as co-obligor on a promissory note. This action by the court was premised on receipt by the bank of the proceeds of collateral securing the note in controversy. The collateral was owned by Janice’s co-obligor, Lavem Waschkat, was sold by him, and the proceeds were applied by the bank on other obligations owed to it by Lavem individually.

The primary issue which the appeal presents is whether a…