* Local Rule 47.5 provides: "The publication of opinions

that have no precedential value and merely decide particular

cases on the basis of well-settled principles of law imposes

needless expense on the public and burdens on the legal

profession." Pursuant to that Rule, the court has determined

that this opinion should not be published.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

 No. 95-30534

_____________________

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

GEORGE EAMES AND PATSY SMOTHERS EAMES,

Defendants-Appellants.

_________________________________________________________________

Appeal from the United States District Court

for the Western District of Louisiana

(CA-93-916-A)

_________________________________________________________________

November 28, 1995

Before KING, SMITH, and BENAVIDES, Circuit Judges.

PER CURIAM:*

The district court entered a judgment that George Eames and

Patsy Smothers Eames were personally liable to the United States

on the portion of their indebtedness to the Small Business

Administration that had not prescribed. Additionally, the

judgment awarded the Government an in rem judgment for the full

unpaid balance of their indebtedness, since the debt was secured

by a mortgage on property owned by the Eameses. The Government
2

used the proceeds of a foreclosure sale of the property to

satisfy the in rem judgment. The Eameses filed a "Motion to Show

Cause Why Judgment Should Not Be Cancelled," arguing that the

sale proceeds, which totalled more than the personal judgment

against them, should have been credited first against their

personal liability. The district court denied their motion and

the Eameses appeal. We affirm the ruling of the district court. 

I. BACKGROUND

A. Facts

In 1979, George and Patsy Smothers Eames (the "Eameses"),

husband and wife, borrowed $190,400 from the Small Business

Administration (the "SBA"). To evidence the indebtedness, they

executed and delivered to the SBA a promissory note (the "Note")

bearing interest at the rate of three percent (3%) per annum. 

The Note provided, inter alia, that on non-payment of the loan

the SBA could sell the Eameses' collateral and apply the proceeds

to the payment of the Eameses' debt as the SBA saw fit. In 1982,

to secure the indebtedness evidenced by the Note, the Eameses

executed a mortgage on a 225-acre parcel of real estate in

Concordia Parish, Louisiana (the "Collateral"). 

The Eameses paid the SBA a total of $111,605 in five

payments of $22,321 each between February 4, 1980, and February

2, 1984. Then they stopped making payments. The SBA did not

demand payment on the entire balance due until April 1991, at
 

2 The federal statute of limitations governing enforcement

of the Note is set forth in 28 U.S.C. § 2415(a), which provides

in relevant part:

[E]very action for money damages brought by the United

States or an officer or agency thereof which is founded upon

any contract express or implied in law or fact, shall be barred 

unless the complaint is filed within six years after the

cause of action accrues . . . .

28 U.S.C. § 2415(a).

The district court found that the operative date for

purposes of computing the prescriptive period was the date that

the SBA filed its complaint, May 26, 1993.

3

which time it sought $98,244.25 principal and $21,244.98

interest. In February 1993, the SBA again demanded payment, this

time in the amount of $124,098.65.

B. Procedural History

Seeking payment of the indebtedness secured by the Note, the

SBA filed a complaint against the Eameses on May 26, 1993. The

Government sought to reduce the full amount of its claim to a

personal judgment against the Eameses. The Eameses denied any

liability on the Government's claim on the ground that the

statute of limitations had run--in other words, the debt had

prescribed.2 In its First Amended Complaint, the Government

conceded that a portion of its claim had prescribed and it sought

to limit the personal judgment against the Eameses to that

portion of the debt that was not barred by prescription. In

addition, the Government sought to pursue an in rem action

against the Collateral to satisfy its claim for the full amount

due on the Note. 
 

3 The Federal Rules of Civil Procedure provide that a party

may move for relief from a final judgment if "the judgment has

been satisfied, released, or discharged, or a prior judgment upon

which it is based has been reversed or otherwise vacated, or it

is no longer equitable that the judgment should have prospective

application." FED. R. CIV. P. 60(b)(5).

4

 On April 15, 1994, the district court granted summary

judgment for the Government. The district court also ruled that

the Government's claims for payments originally due before 1988

were barred by the statute of limitations. On April 29, the

district court entered a final judgment (the "Judgment") (which

is not a model of clarity) holding that the Eameses were liable

in personam for $42,709.96 principal, plus interest. The

Judgment also held that the Eameses were responsible in rem for

the full amount of the Government's claim, $95,271.25 principal,

plus interest. Finally, the Judgment directed that the real

estate be sold and the proceeds paid to the Government to satisfy

the Eameses' debts. The Government sold the real estate for

$63,000 in December 1994, applying this amount to the in rem

claim. Thereafter, the Government continued to seek payment of

the in personam portion of the Judgment. In February 1995, in

accordance with FED. R. CIV. P. 60(b)(5),3 the Eameses filed a

pleading styled "Motion to Show Cause Why Judgment Should Not Be

Cancelled." Effectively ignoring the in rem portion of the

Judgment, the Eameses contended that the seizure and sale of the

Collateral had satisfied in full the amount of their personal

liability. Following a hearing, and after finding that it was

within the Government's discretion to choose how to apply the
5

proceeds of the foreclosure sale, the district court denied the

Eameses' motion. Proceeding pro se, the Eameses now appeal.

II. ANALYSIS The merits of the

Judgment which precipitated the Eameses' request for relief are

not before us in this case. We have pointed out that, where no

appeal has been taken from the underlying judgment, "it goes

without saying that a Rule 60 motion is not a substitute for an

appeal." Travelers Ins. Co. v. Liljeberg Enters., Inc., 38 F.3d

1404, 1408 (5th Cir. 1994). Moreover, "in the absence of an

abuse of discretion, [we] will not review the district court's

determination" because motions for relief from a final judgment

are within the sound discretion of the district court. United

States v. Nolder, 749 F.2d 1128, 1129 (5th Cir. 1984) (internal

quotations and ellipses omitted). 

As an initial matter, we note that the expiration of the

statute of limitations on an action for money damages does not

affect the in rem rights or remedies of the Government. Federal

law does define the limitation period for a suit brought by the

Government for in personam money damages founded on a contract. 

28 U.S.C. § 2415. This statute, however, "by its own unambiguous

terms, does not apply to mortgage foreclosures." United States

v. Ward, 985 F.2d 500, 503 (10th Cir. 1993). Actions brought by

the Government "to establish the title to, or right of possession

of, real or personal property" are exempt from the limitations

period. 28 U.S.C. § 2415(c). 
6

Moreover, as a government agency, the SBA is not bound by a

state statute of limitations governing actions on mortgages. 

Magnolia Fed. Bank for Sav. v. United States, 42 F.3d 968, 970

(5th Cir. 1995). Under Louisiana law, a creditor is unable to

recover in rem if its in personam claim against the debtor is

barred by the statute of limitations. LA. CIV. CODE ANN. art. 3282

(West 1994). We have noted, however, that "every federal

appellate court that has addressed whether there is a time bar on

federal agencies' pursuit of real property foreclosure actions .

. . has concluded that no such bar exists." Farmers Home Admin.

v. Muirhead, 42 F.3d 964 (5th Cir.) (holding that Mississippi

statute of limitations for collecting on underlying notes did not

bar Farmers Home Administration from foreclosing mortgage that

secured notes), cert. denied, 116 S. Ct. 50 (1995). Therefore,

as distinct from the Government's right to in personam contract

damages, the power of sale in rem contained in a mortgage

survives regardless of whether the underlying obligation is

barred by prescription. United States v. Dos Cabezas Corp., 995

F.2d 1486, 1489-90 (9th Cir. 1993). 

Application of the proceeds from the sale of the Collateral

was within the sole discretion of the Government. According to

the scenario advanced by the Eameses, the Judgment stipulated

that any funds raised from the sale of the Collateral must be

used to satisfy first the Government's personal claim against
 

4 The Judgment is comprised of two major sections--a section

dealing with the in personam claim and a section dealing with the

in rem claim. The Judgment reads in pertinent part:

IT IS ORDERED, ADJUDGED, AND DECREED that there be 

judgment in favor of Plaintiff, the United States of

America, and against the defendants, GEORGE EAMES AND PATSY

SMOTHERS EAMES, jointly, severally, and in solido, for the

principal sum of $42,709.96 and interest . . . ;

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the 

said hereinabove described property be seized and sold . . .

and the amount realized from said sale be credited "pro 

tanto" upon the amount of the judgment herein . . . .

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that there

be judgment in favor of Plaintiff . . . against the

defendants . . . in rem for the full amount of the claim of

the United States of America for the principal sum of

$95,271.25, plus accrued interest . . . ; provided, however,

any sum recovered from Defendants personally shall be applied

as a credit in reduction of this in rem judgment first

against accrued interest and then principal.

7

them.4 We find, on the contrary, that the SBA was authorized to

apply the proceeds as it saw fit, to either the in rem claim or

the in personam claim. SBA regulations provide that property

pledged as collateral "may be sold in accordance with the

provisions of the related security instrument." 13 CFR §

120.204-2(c). The regulations, however, do not indicate how the

agency must apply the proceeds resulting from a foreclosure and

sale. Absent federal law to the contrary, federal courts

generally apply state law to the commercial lending activities of

government agencies. United States v. Irby, 618 F.2d 352, 355

(5th Cir. 1980). In Louisiana, "generally, a debtor has the

right to declare which of several debts his payment is to

liquidate. . . . When a debtor fails to impute payment to a

particular debt, the creditor may exercise the right." Delta

Bank & Trust Co. v. Chisholm, 601 So.2d 345, 348 (La. Ct. App.
8

1992); see LA. CIV. CODE ANN. art. 1864 (West 1987). In the

instant case, the language of the Note is clear. The Eameses

authorized the SBA to sell the Collateral and "[a]fter deducting

all expenses incidental to or arising from such sale or sales,

the [SBA could] apply the residue of the proceeds thereof to the

payment of the [Note], as it shall deem proper." (emphasis

added). 

Therefore, we conclude that the district court did not abuse

its discretion in denying the Eameses' Rule 60(b) motion. 

Although the statute of limitations barred the SBA from

prevailing against the Eameses personally on the prescribed

portion of the underlying debt, it did not bar an in rem action

against the Collateral for the full amount of the outstanding

indebtedness. The Judgment made clear that it operated both in

rem, for the full amount of the Government's claim, and in

personam, for the portion of the claim that had not prescribed.

Louisiana law provides that a debtor has the right to specify

which of several debts his payment is to liquidate. In the Note,

the Eameses expressly ceded this right to the SBA. Consequently,

the Government could apply the proceeds to the in rem claim and,

if necessary, continue to seek payment of the in personam portion

of the judgment.

III. CONCLUSION

For the reasons stated above, we AFFIRM the district court's

denial of the motion for relief from judgment. 
9