Reuben G. Lenske v. Magner Dale Knutsen and Judith Knutsen

This proceeding started out as a suit brought by the United States to foreclose a mortgage held by Farmers’ Home Administration, an agency of the United States. The mortgagor-defendant was appellee Magner Knutsen, and appellant Lenske was joined as one claiming interest in the property. The rights and interests of the United States are not involved here. The dispute before us resulted from a cross-claim filed by Knut-sen against Lenske asserting a right to be adjudicated owner of the property subject to the Government mortgage and charging Lenske with fraud in depriving him of title. In the District Court judgment was rendered in favor of Knutsen. His rights to the property were established and judgment against Lenske for fraud was rendered in the sum of $250 as general and $5,000 as punitive damages. This appeal followed.

' The background of Knutsen’s claim of fraud, briefly, is as follows:

Lenske had been Knutsen’s attorney. Knutsen testified that on Lenske’s advice he had deeded the property to one Hed-don and wife (under the assumption that the grantees were fictitious) in order to prevent his former wife from reaching it to satisfy her claim for an accrued support…