RD Instruction 1900-C


PART 1900 - GENERAL

Subpart C - Applicability of Federal Law and Individual Liability


§1900.101  General.

	This Subpart provides Agency policy concerning:

(a)  The liability of the spouse when both parties execute a promissory 
note, assumption agreement, or other evidence of indebtedness.

(b)  The applicability of Federal law rather than State law in the 
conduct of Rural Development and Farm Service Agency, herein referred to 
as the “Agency,” operations.

(c)  The liability of an auctioneer for conversion of personal property 
mortgaged to the Agency.

§1900.102  Applicable law.

	Loans made by the Agency are authorized and executed pursuant to Federal 
programs adopted by Congress to achieve national purposes of the U.S. 
Government.

(a)  Instruments evidencing or securing a loan payable to or held by the 
Agency, such as promissory notes, bonds, guaranty agreements, mortgages, 
deeds of trust, financing statements, security agreements, and other 
evidences of debt or security shall be construed and enforced in 
accordance with applicable Federal law.

(b)  Instruments evidencing a guarantee, conditional commitment to 
guarantee, or a grant, such as contracts of guarantee, grant agreements 
or other evidences of an obligation to guarantee or make a grant, 
executed by the Agency, shall be construed and enforced in accordance 
with applicable Federal law.

(c)  In order to implement and facilitate these Federal loan programs, 
the application of local procedures, especially for recordation and 
notification purposes, may be utilized to the fullest extent feasible 
and practicable.  However, the use of local procedures shall not be 
deemed or construed to be any waiver by the Agency of Federal immunity 
from any local control, penalty, or liability, or to subject the Agency 
to any State required acts or actions subsequent to the delivery by the 
Agency officials of the instrument to the appropriate local or State 
official.


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DISTRIBUTION:  W, S, D, C                              General


(2-21-79)  PN 662


RD Instruction 1900-C
§1900.102 (Con.)


(d)  Any person, corporation, or organization that applies for and 
receives any benefit or assistance from the Agency that offers any 
assurance or security upon which the Agency relies for the granting of 
such benefit or assistance, shall not be entitled to claim or assert any 
local immunity, privilege, or exemption to defeat the obligation such 
party incurred in obtaining or assuring such Federal benefit or 
assistance.

(e)  The liability of an auctioneer for conversion of personal property 
mortgaged to the Agency shall be determined and enforced in accordance 
with the applicable Federal law.  "Auctioneer" for the purposes of this 
Subpart includes a commission merchant, market agency, factor or agent.  
In all cases in which there has been a disposition without authorization 
by the Agency of personal property mortgaged to that agency, any 
auctioneer involved in said disposition shall be liable to the 
Government for conversion--notwithstanding any State statute or 
decisional rule to the contrary.

§1900.103  Separate and individual liability of spouse.

	In all cases in which one party to a marriage joins the other party in 
executing a promissory note, assumption agreement, or other evidence of 
indebtedness for loans made or insured by the United States of America, acting 
through the Agency, one purpose and effect of either party's signature will be 
to engage that party's separate and individual personal liability whether or 
not specifically so stated in the note or other instrument and notwithstanding 
any State statute or decisional rule to the contrary whether based on 
coverture or other grounds and irrespective of whether the loan is for the 
benefit of one party or for the benefit of property held or to be held by both 
parties as tenants in common, joint tenants, an estate by the entirety, 
community property, or otherwise, or is the separate property of either.

§§1900.104 - 1900.150  [Reserved]








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