First Dakota National Bank v. Maxon

KONENKAMP, Justice.

First Dakota National Bank appeals the circuit court’s judgment discharging persons on a promissory note. We reverse.

FACTS

William Maxon owned the Skyline Motel and Chateau Lounge located in Yankton, South Dakota. He sold it in September 1987 on a contract for deed to J & J Hotels, Inc. (J & J), a corporation formed by Jack Schae-fer and John Parker. Under the terms of the sale contract, J & J assumed Maxon’s remaining unpaid obligation on his contract for deed on the property and agreed to pay Maxon a down payment of $100,000. J & J borrowed $50,000 from First Dakota…