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Civil Resource Manual

78. Conversion Of Property Mortgaged To The Government

Frequently, livestock and chattels subject to a recorded lien of the government are sold by commission merchants or auctioneers and purchased by others. When the government's borrower who owned the livestock or chattels is impecunious, the client agency may ask that suit be brought against the commission merchant, auctioneer, or purchaser to recover the value of the property on the theory of conversion. For the liability of such "converters", see United States v. Sommerville, 324 F.2d 712 (3d Cir. 1963), cert. denied, 376 U.S. 909 (1964); United States v. Matthews, 244 F.2d 626 (9th Cir 1957); United States v. Carson, 372 F.2d 429 (6th Cir. 1967); Cassidy Commission Co. v. United States, 387 F.2d 875 (10th Cir. 1967); United States v. Union Livestock Sales Co., 298 F.2d 755 (4th Cir. 1962); Duvall-Wheeler Livestock Barn v. United States, 415 F.2d 226 (5th Cir. 1969); United States v. Gallatin Livestock Auction, 589 F.2d 353 (8th Cir. 1978). Sommerville, supra; Mathews, supra; Carson, supra; Cassidy, supra; and United States v. Hext, 444 F.2d 804 (5th Cir. 1971), hold that liability for conversion in such circumstances is determinable by federal rather than state law. But see United States v. E.W. Savage & Sons, Inc., 475 F.2d 305 (8th Cir. 1973).

[cited in USAM 4-4.440]