Chapter 1. Gambling and Future Contracts

§ 87-1-1. Utterly void.

Contracts, judgments, securities, conveyances made, given, granted, or executed, where the whole or any part of the consideration or foundation thereof shall be for money, or any valuable thing won, lost, or bet at any game or games, or on any horse-race, cock-fight, or at any other sport, amusement, or pastime, or on any wager whatever, or for the reimbursing or repaying any money knowingly lent or advanced for the purpose of such gaming or gambling, or to be wagered on any game, play, horse-race, cock-fight, or on any sport, amusement, pastime, or wager, shall be utterly void.

HISTORY: Codes, Hutchinson’s 1848, ch. 64, art. 3 (1); 1857, ch. 45, art. 1; 1871, § 1900; 1880, § 990; 1892, § 2114; 1906, § 2300; Hemingway’s 1917, § 1910; 1930, § 1824; 1942, § 22.

Cross References —

Mississippi Gaming Control Act, see §§75-76-1 et seq.

Inapplicability of this section to Mississippi Gaming Control Act, see §87-1-7.

Clubs, boats, and the like operating gaming devices as nuisances, see §95-3-25.

Criminal gambling and wagers generally, see §§97-33-1 et seq.

Special duty of officers to arrest gamblers, see §99-3-25.

Proof in gambling cases, see §99-17-25.

RESEARCH REFERENCES

ALR.

Action to recover money or property lost and paid through gambling as affected by statute of limitations. 22 A.L.R.2d 1390.

Criminal conspiracies as to gambling. 91 A.L.R.2d 1148.

Construction and application of state or municipal enactments relating to policy or numbers games. 70 A.L.R.3d 897.

Validity, construction, and application of statutes or ordinances involved in prosecutions for transmission of wagers or wagering information related to bookmaking. 53 A.L.R.4th 801.

Private contests and lotteries: entrants’ rights and remedies. 64 A.L.R.4th 1021.

Am. Jur.

17A Am. Jur. 2d, Contracts § 322.

38 Am. Jur. 2d, Gambling §§ 129 et seq., 154 et seq.

7 Am. Jur. Pl & Pr Forms (Rev) Contracts, Forms 8, 9 (answers alleging as defenses that contract is void as against public policy, and for illegality).

CJS.

38 C.J.S., Gaming §§ 3, 4 et seq.

JUDICIAL DECISIONS

1. Construction and application.

2. Check in payment.

3. Advancement of money for gambling business.

4. Judgment on gambling contract.

5. Note or bill of exchange for gambling consideration.

6. Recovery of money paid.

1. Construction and application.

Section87-1-1, which declares “utterly void” all contracts executed and made in connection with illegal gaming activities, does not bar collection of debts arising out of legal gaming activities; thus, §87-1-1 does not apply to bingo, since charitable bingo games were exempted from any and all “illegal” definitions by §97-33-51. Frank v. Dore, 635 So. 2d 1369, 1994 Miss. LEXIS 138 (Miss. 1994).

Agreement that price of cotton actually delivered should be fixed by New York cotton quotations during specified time was not illegal. Burgson & Co. v. Williams, Smithwick & Co., 155 Miss. 351, 121 So. 817, 1929 Miss. LEXIS 257 (Miss. 1929).

The trustee in a deed of trust or assignment may enjoin a levy on the property conveyed to him, on the ground that the note on which the judgment is based was given for a gambling consideration. Smither v. Keys, 30 Miss. 179, 1855 Miss. LEXIS 83 (Miss. 1855).

Where the original contract is illegal, any subsequent contract which carries it into effect is also illegal. Adams v. Rowan, 16 Miss. 624, 1847 Miss. LEXIS 65 (Miss. 1847).

2. Check in payment.

Indorsement and transfer of check in payment of gambling debt is void and ineffective to pass title to any subsequent holder. Skinner Mfg. Co. v. Deposit Guaranty Bank, 160 Miss. 815, 133 So. 660, 1931 Miss. LEXIS 166 (Miss. 1931).

Bank paying check indorsed in payment of gambling debt, resulting in loss to bank when maker stopped payment, held without remedy against maker. Skinner Mfg. Co. v. Deposit Guaranty Bank, 160 Miss. 815, 133 So. 660, 1931 Miss. LEXIS 166 (Miss. 1931).

3. Advancement of money for gambling business.

One who advances money to another to be used in a gambling business, and who is to be repaid only from the proceeds of the business, cannot enforce payment, and a note given after the close of business for money so advanced is without valid consideration. Virden v. Murphey, 78 Miss. 515, 28 So. 851, 1900 Miss. LEXIS 108 (Miss. 1900).

4. Judgment on gambling contract.

A suit on a judgment rendered upon a note given for gambling contract can be defeated by showing the illegality of the original transaction. Campbell v. New Orleans Nat'l Bank, 74 Miss. 526, 21 So. 400, 1896 Miss. LEXIS 177 (Miss. 1896).

A judgment obtained upon a gambling contract is void by statute, and it will make no difference that the note on which the judgment is based passed for value into the hands of an innocent purchaser. Lucas v. Waul, 20 Miss. 157, 1849 Miss. LEXIS 16 (Miss. 1849); Martin v. Terrell, 20 Miss. 571, 1849 Miss. LEXIS 90 (Miss. 1849); Smither v. Keys, 30 Miss. 179, 1855 Miss. LEXIS 83 (Miss. 1855).

5. Note or bill of exchange for gambling consideration.

One who advances money to another to be used in a gambling business, and who is to be repaid only from the proceeds of the business, cannot enforce payment, and a note given after the close of business for money so advanced is without valid consideration. Virden v. Murphey, 78 Miss. 515, 28 So. 851, 1900 Miss. LEXIS 108 (Miss. 1900).

A bill of exchange or promissory note is void where the consideration, in whole or in part, is for money or other valuable thing won at any game or on a horse race, etc. Crawford v. Storms & Brooks, 41 Miss. 540, 1867 Miss. LEXIS 28 (Miss. 1867).

The maker of a note, payable to a named individual or bearer, when sued by another than the party named as payee, may successfully defend by showing that the plaintiff won the note in a bet with the payee. Holman v. Ringo, 36 Miss. 690, 1859 Miss. LEXIS 85 (Miss. 1859).

A note given for a gambling consideration may be declared void either at law or in a court of equity. McAuley's Adm'r v. Mardis, 1 Miss. 307, 1828 Miss. LEXIS 1 (Miss. 1828).

6. Recovery of money paid.

Money paid by mistake is recoverable and it is no defense to a suit therefor that the contract out of which the transaction sprung was an illegal one where resort to the contract is unnecessary to prove the plaintiff’s case. Adler v. C. J. Searles & Co., 86 Miss. 406, 38 So. 209, 1905 Miss. LEXIS 11 (Miss. 1905).

Judgments on any wager whatever are void under this section, and money lost on any wager can be recovered back by the loser. Campbell v. New Orleans Nat'l Bank, 74 Miss. 526, 21 So. 400, 1896 Miss. LEXIS 177 (Miss. 1896).

§ 87-1-3. Transfer of property to secure or pay, inures to wife and children of loser.

Any sale, mortgage, transfer, or conveyance of any estate, real or personal, to any person or to another for his use or benefit, or in any manner to satisfy or secure money or other thing won, or any part thereof, or to secure or satisfy any money or other thing lent or advanced on any consideration, foundation, or purpose mentioned in Section 87-1-1, or any part thereof, shall inure to and vest in the wife and children of said mortgagor, seller, vendor, bargainor, or lessor, the whole estate, title, and interest of such person sold, mortgaged, bargained, transferred, or conveyed, as though such person had died intestate. And the parties to any action founded on any contract or transaction within this chapter, shall be compelled to answer any bill of discovery touching the same.

HISTORY: Codes, Hutchinson’s 1848, ch. 64, art. 3 (2); 1857, ch. 45, art. 2; 1871, § 1901; 1880, § 991; 1892, § 2115; 1906, § 2301; Hemingway’s 1917, § 1911; 1930, § 1825; 1942, § 23.

Cross References —

Mississippi Gaming Control Act, see §§75-76-1 et seq.

Inapplicability of this section to Mississippi Gaming Control Act, see §87-1-7.

JUDICIAL DECISIONS

1. In general.

Where a bank knowingly advanced money for use in dealing in futures at a time when such contracts were unlawful, wife of borrower may have note and mortgage executed by herself and husband on their homestead and her separate property, to secure same, cancelled, whereupon the property would vest in herself and children; in such case it is immaterial that borrower had right to buy cotton futures by mail or wire from brokers in another state. Cohn v. Brinson, 112 Miss. 348, 73 So. 59, 1916 Miss. LEXIS 118 (Miss. 1916).

§ 87-1-5. Loser may sue and recover money or property lost; exceptions.

If any person, by playing at any game whatever, or by betting on the sides or hands of such as do play at any game, or by betting on any horse race or cockfight, or at any other sport or pastime, or by any wager whatever, shall lose any money, property, or other valuable thing, real or personal, and shall pay or deliver the same or any part thereof, the person so losing and paying or delivering the same, or his wife or children, may sue for and recover such money, property, or other valuable thing so lost and paid or delivered, or any part thereof, from the person knowingly receiving the same, with costs. However, this section shall not apply to betting, gaming or wagering:

On a cruise vessel as defined in Section 27-109-1 whenever such vessel is in the waters within the State of Mississippi, which lie adjacent to the State of Mississippi south of the three (3) most southern counties in the State of Mississippi, including the Mississippi Sound, St. Louis Bay, Biloxi Bay and Pascagoula Bay;

In a structure located in whole or in part on shore in any of the three (3) most southern counties in the State of Mississippi in which the registered voters of the county have voted to allow such betting, gaming or wagering on cruise vessels as provided in Section 19-3-79, if:

The structure is owned, leased or controlled by a person possessing a gaming license, as defined in Section 75-76-5, to conduct legal gaming on a cruise vessel under paragraph (a) of this section;

The part of the structure in which licensed gaming activities are conducted is located entirely in an area which is located no more than eight hundred (800) feet from the mean high-water line (as defined in Section 29-15-1) of the waters within the State of Mississippi, which lie adjacent to the State of Mississippi south of the three (3) most southern counties in the State of Mississippi, including the Mississippi Sound, St. Louis Bay, Biloxi Bay and Pascagoula Bay, or, with regard to Harrison County only, no farther north than the southern boundary of the right-of-way for U.S. Highway 90, whichever is greater; and

In the case of a structure that is located in whole or part on shore, the part of the structure in which licensed gaming activities are conducted shall lie adjacent to state waters south of the three (3) most southern counties in the State of Mississippi, including the Mississippi Sound, St. Louis Bay, Biloxi Bay and Pascagoula Bay. When the site upon which the structure is located consists of a parcel of real property, easements and rights-of-way for public streets and highways shall not be construed to interrupt the contiguous nature of the parcel, nor shall the footage contained within the easements and rights-of-way be counted in the calculation of the distances specified in subparagraph (ii).

On a vessel as defined in Section 27-109-1 whenever such vessel is on the Mississippi River or navigable waters within any county bordering on the Mississippi River; or

That is legal under the laws of the State of Mississippi.

HISTORY: Codes, Hutchinson’s 1848, ch. 64, art. 3 (3); 1857, ch. 45, art. 3; 1871, § 1902; 1880, § 992; 1892, § 2116; 1906, § 2302; Hemingway’s 1917, § 1912; 1930, § 1826; 1942, § 24; Laws, 1989, ch. 481, § 1; Laws, 1990, ch. 449, § 3; Laws, 1990, ch. 573, § 7; Laws, 1990 Ex Sess, ch. 45 § 147; Laws, 2005, 5th Ex Sess, ch. 16, § 1, eff from and after passage (approved Oct. 17, 2005.).

Amendment Notes —

The 2005 amendment, 5th Ex Sess, ch. 16, added “including the Mississippi Sound, St. Louis Bay, Biloxi Bay and Pascagoula Bay” to the end of (a); added (b); and redesignated former (b) and (c) as present (c) and (d).

Cross References —

Elected or appointed official not to derive any pecuniary benefit as result of duties under this section, and penalties therefor, see §25-4-119.

Licensing and regulation of cruise vessels, see §27-109-1 et seq.

Mississippi Gaming Control Act, see §§75-76-1 et seq.

Inapplicability of this section to Mississippi Gaming Control Act, see §87-1-7.

Forfeiture of moneys exhibited for purpose of betting, see §97-33-17.

RESEARCH REFERENCES

ALR.

Law of forum against wagering transaction as precluding enforcement of claim based on gambling transaction valid under applicable foreign law. 71 A.L.R.3d 178.

Private contests and lotteries: entrant’s rights and remedies. 64 A.L.R.4th 1021.

Validity, construction, and application of statute or ordinance prohibiting or regulating use of messenger services to place wagers in pari-mutuel pool. 78 A.L.R.4th 483.

Recovery in tort for wrongful interference with chance to win game, sporting event, or contest. 85 A.L.R.4th 1048.

Am. Jur.

38 Am. Jur. 2d, Gambling §§ 154, 159-161.

12 Am. Jur. Pl & Pr Forms (Rev) Gambling, Forms 11-14 (complaint, or declaration to recover gambling losses).

§ 87-1-7. Limitation on application of Sections 87-1-1 through 87-1-5.

Sections 87-1-1, 87-1-3 and 87-1-5 shall not apply to contracts for future delivery which are valid under succeeding sections of this chapter and shall not apply to activity which is lawfully conducted pursuant to the regulatory authority of the Mississippi Gaming Control Act (Section 75-76-1 et seq.)

HISTORY: Codes, Hutchinson’s 1848, ch. 64, art. 3 (3); 1857, ch. 45, art. 3; 1871, § 1902; 1880, § 992; 1892, § 2116; 1906, § 2302; Hemingway’s 1917, § 1912; 1930, § 1826; 1942, § 24; Laws, 1990 Ex Sess, ch. 45, § 84, eff from and after passage (approved June 29, 1990).

§ 87-1-9. Future contracts; definitions.

For the purposes of the following sections of this chapter the term “contract” shall be held to include sales, purchases, agreements of sale, agreements to sell and agreements to purchase, that the word “person” wherever used in the following sections shall be construed to import the plural or singular, as the case demands, and shall include individuals, associations, partnerships and corporations.

HISTORY: Codes, 1930, § 1827; 1942, § 25; Laws, 1928, ch. 304.

§ 87-1-11. Certain exchanges authorized.

There may be organized in any city in the State of Mississippi voluntary associations to be known as cotton exchanges, grain exchanges, boards of trade or similar institutions to receive and post quotations on cotton, grain, stocks, bonds and other commodities for the benefit of its members and other persons engaged in the production of cotton, grain and other commodities. Such associations shall adopt a uniform set of rules and regulations not incompatible with the laws, as are usual for such associations. They shall open their books to the inspection of proper courts and officers of the law when required.

HISTORY: Codes, 1930, § 1834; 1942, § 32; Laws, 1928, ch. 304.

Cross References —

Regulation of transfer of investment securities under the Uniform Commercial Code, see §75-8-101 et seq.

§ 87-1-13. Who may provide market quotations by wire.

Only members of cotton exchanges, grain exchanges, boards of trade or similar institutions organized under the laws of Mississippi or any other state may provide for their use and the use of their clients, private or public wires from cities in Mississippi where such cotton exchanges, grain exchanges, boards of trade or similar institutions are located to other cities without the State of Mississippi where cotton exchanges, grain exchanges, boards of trade or similar institutions are operated, and may receive over such private or public wires and post for their own use and that of their clients and of any person engaged in the production of cotton, grain or other commodities, market quotations and market news, covering cotton, grain, stocks and other commodities, and transmit for execution contracts of sale for future delivery. In all cases it is contemplated that the delivery of the commodity purchased or sold, as the case may be, will be carried out by the principals or their successors or assignees; and that the contract for delivery thereof will be performed or discharged according to the rules of the exchange, board of trade or similar institutions where the contract is executed.

HISTORY: Codes, 1930, § 1835; 1942, § 33; Laws, 1928, ch. 304.

§ 87-1-15. When contracts of sale for future delivery of cotton, grain, stock, or other commodities enforceable.

  1. All contracts of sale for future delivery of cotton, grain, stock, or other commodities (a) made in accordance with the rules of any board of trade, exchange or similar institution where such contracts of sale are executed; and (b) actually executed on the floor of such board of trade, exchange or similar institutions and performed or discharged according to the rules thereof; and (c) when such contracts of sale are made with or through a regular member in good standing of a cotton exchange, grain exchange or similar institution organized under the laws of the State of Mississippi or any other state shall be, and they are hereby declared to be, valid and enforceable in the courts of this state according to their terms.
  2. Notwithstanding the provisions of subsection (1) of this section, contracts of sale for the future delivery of cotton in order to be valid and enforceable must not only conform to the requirements of clauses (a), (b) and (c) of subsection (1) of this section, but must also be made subject to the provisions of the United States Internal Revenue Code of 1954, subchapter D. In the event, however, that this subsection be held inoperative for any reason, then contracts for the future delivery of cotton shall be valid and enforceable if they conform to the requirements of clauses (a), (b) and (c) of subsection (1) of this section.
  3. If contracts of sale for future delivery of cotton, grain, stock, or other commodity shall conform to all of the requirements set forth above in this section, then the same shall be valid and enforceable in all the courts of this state, notwithstanding that at the time of execution of such contracts that either or both of the parties thereto did not contemplate or intend that the same should be consummated by the actual delivery and receipt of the commodity specified. The plain intent of this section, while declaring unlawful all transactions conducted in and through a “bucket shop” as hereinafter defined, is to make lawful and enforceable and to withdraw from the provisions of the gaming and wagering laws, all transactions executed upon and in accordance with the rules of a legitimate cotton, grain, stock or other commodity exchange or board of trade whether the intent of delivery of the actual commodity was present or not and this section shall be liberally construed at all times so as to effectuate this purpose.

HISTORY: Codes, 1930, § 1828; 1942, § 26; Laws, 1928, ch. 304; Laws, 1956, ch. 229.

Cross References —

“Bucket shop” defined, see §87-1-21.

RESEARCH REFERENCES

Am. Jur.

38 Am. Jur. 2d, Gambling §§ 37, 144, 147-153.

JUDICIAL DECISIONS

1. In general.

Forward contract for future delivery of cotton was not void as being a futures contract where there was provision for delivery by the seller of cotton sold. Austin v. Montgomery, 336 So. 2d 745, 1976 Miss. LEXIS 1523 (Miss. 1976).

This section does not make an arbitrary distinction between brokerage houses which have connections with commodity exchanges and those which do not, and consequently does not violate due process. Kohlmeyer & Co. v. Rotwein, 186 So. 2d 768, 1966 Miss. LEXIS 1331 (Miss.), cert. denied, 385 U.S. 971, 87 S. Ct. 508, 17 L. Ed. 2d 435, 1966 U.S. LEXIS 106 (U.S. 1966).

This section does not violate the public policy of Mississippi against gambling. Kohlmeyer & Co. v. Rotwein, 186 So. 2d 768, 1966 Miss. LEXIS 1331 (Miss.), cert. denied, 385 U.S. 971, 87 S. Ct. 508, 17 L. Ed. 2d 435, 1966 U.S. LEXIS 106 (U.S. 1966).

The fact that the State of Mississippi does not have the power to control the rules and regulations adopted by commodity exchanges beyond its borders does not make this section an unconstitutional delegation of legislative power. Kohlmeyer & Co. v. Rotwein, 186 So. 2d 768, 1966 Miss. LEXIS 1331 (Miss.), cert. denied, 385 U.S. 971, 87 S. Ct. 508, 17 L. Ed. 2d 435, 1966 U.S. LEXIS 106 (U.S. 1966).

In brokers’ suit to recover money paid client under mistaken belief that margin of client was greater than needed, evidence as to whether contract between client and broker was gambling contract held for jury, even though contract had appearance of legality, and stated that actual delivery of commodities bought or sold was contemplated. Knox v. Clark, 177 Miss. 195, 171 So. 340, 1936 Miss. LEXIS 278 (Miss. 1936).

Intention of both parties to contract for future delivery that transaction was to be closed by settlement of difference between price when made and price at time of closing may be shown by what parties said and did in respect of contract. Alamaris v. John F. Clark & Co., 166 Miss. 122, 145 So. 893, 1933 Miss. LEXIS 329 (Miss. 1933).

Where there is substantial evidence that will support inference that both parties did not intend actual delivery under contract for future delivery, question is for jury. Alamaris v. John F. Clark & Co., 166 Miss. 122, 145 So. 893, 1933 Miss. LEXIS 329 (Miss. 1933).

Where evidence of seller of corn for future delivery on board of trade tended to show that neither seller nor brokers intended actual delivery but that cash settlement of difference between contract price and market price at time fixed for delivery should be made, direction of verdict for brokers was error. Alamaris v. John F. Clark & Co., 166 Miss. 122, 145 So. 893, 1933 Miss. LEXIS 329 (Miss. 1933).

Notwithstanding statute relating to contracts for future delivery of commodities according to rules of boards of trade or exchanges, formal contract is not conclusive where other evidence discloses that it was used as a means of dealing in futures. Alamaris v. John F. Clark & Co., 166 Miss. 122, 145 So. 893, 1933 Miss. LEXIS 329 (Miss. 1933).

§ 87-1-17. Brokers may recover certain advances.

Any broker, agent or any other person making advances to or for account of any party to any contract falling within and satisfying the provisions of Section 87-1-15 shall be entitled to recover the amount of such advances from the party to, or for account of whom, the advances were made.

HISTORY: Codes, 1930, § 1829; 1942, § 27; Laws, 1928, ch. 304.

§ 87-1-19. When contracts of sale for future delivery of cotton, grain, stocks, or other commodities unenforceable.

Any contract of sale for the future delivery of cotton, grain, stocks, or other commodities, which is to be settled according to or upon the basis of the public market quotations or prices made on any board of trade, exchange or similar institutions, upon which contracts of sale for future delivery are executed and dealt in without any actual bona fide execution and the carrying out or discharge of such contracts upon the floor of such exchange, board of trade or similar institution, in accordance with the rules thereof, shall be null and void and unenforceable in any court of this state, and no action shall lie thereon at the suit of any party thereto.

HISTORY: Codes, 1930, § 1830; 1942, § 28; Laws, 1928, ch. 304.

JUDICIAL DECISIONS

1. In general.

Where the legislature passed a law authorizing brokers to transmit for execution contracts for sale for future delivery, the legislature did not intend to change the law providing that any contract of sale for future delivery of cotton made without any actual bona fide execution in carrying out such contract shall be void and unenforceable. Laird, Bissell & Meeds v. Capps, 224 Miss. 361, 80 So. 2d 49, 1955 Miss. LEXIS 500 (Miss. 1955).

Sales of cotton futures, where there was no contemplation of actual delivery of cotton, were not valid despite the statute which authorized brokers to transmit for execution contracts for sale for future delivery. Laird, Bissell & Meeds v. Capps, 224 Miss. 361, 80 So. 2d 49, 1955 Miss. LEXIS 500 (Miss. 1955).

A hedging contract contemplated by this section is void and can furnish no foundation upon which to predicate a civil claim for damages. Capps v. Postal Telegraph-Cable Co., 197 Miss. 118, 19 So. 2d 491, 1944 Miss. LEXIS 280 (Miss. 1944).

Telegraph company is not liable for failure to send telegram to firm’s officer informing of sale of cotton by firm, delivery to be made at future date, for sole purpose of having officer make hedging contract with firm’s brokers on New York exchange to protect firm against any rise in price that the firm would have to pay for the cotton, since reliance on the holding contract, which is void under the statute, is essential to plaintiffs’ case. Capps v. Postal Telegraph-Cable Co., 197 Miss. 118, 19 So. 2d 491, 1944 Miss. LEXIS 280 (Miss. 1944).

In brokers’ suit to recover money paid client under mistaken belief that margin of client was greater than needed, evidence as to whether contract between client and broker was gambling contract held for jury, even though contract had appearance of legality, and stated that actual delivery of commodities bought or sold was contemplated. Knox v. Clark, 177 Miss. 195, 171 So. 340, 1936 Miss. LEXIS 278 (Miss. 1936).

Notwithstanding statute relating to contracts for future delivery of commodities according to rules of boards of trade or exchanges, formal contract is not conclusive where other evidence discloses that it was used as a means of dealing in futures. Alamaris v. John F. Clark & Co., 166 Miss. 122, 145 So. 893, 1933 Miss. LEXIS 329 (Miss. 1933).

Intention of both parties to contract for future delivery that transaction was to be closed by settlement of difference between price when made and price at time of closing may be shown by what parties said and did in respect of contract. Alamaris v. John F. Clark & Co., 166 Miss. 122, 145 So. 893, 1933 Miss. LEXIS 329 (Miss. 1933).

Where there is substantial evidence that will support inference that both parties did not intend actual delivery under contract for future delivery, question is for jury. Alamaris v. John F. Clark & Co., 166 Miss. 122, 145 So. 893, 1933 Miss. LEXIS 329 (Miss. 1933).

Where evidence of seller of corn for future delivery on board of trade tended to show that neither seller nor brokers intended actual delivery but that cash settlement of difference between contract price and market price at time fixed for delivery should be made, direction of verdict for brokers was error. Alamaris v. John F. Clark & Co., 166 Miss. 122, 145 So. 893, 1933 Miss. LEXIS 329 (Miss. 1933).

§ 87-1-21. “Bucket shop” defined.

A “bucket shop” is hereby defined to be and mean any place of business wherein are made contracts of the sort or character denounced by Section 87-1-19, and the maintenance or operation of a bucket shop at any point in this state is hereby prohibited.

HISTORY: Codes, 1930, § 1831; 1942, § 29; Laws, 1928, ch. 304.

§ 87-1-23. Penalties.

Any person either as agent or principal, who knowingly enters into or assists in making any contracts of sale of the sort or character denounced by Section 87-1-19 for the future delivery of cotton, grain, stocks or other commodities, or who maintains or operates a bucket shop as that term is defined in Section 87-1-21, shall be guilty of a felony, and upon conviction thereof shall be fined in a sum not to exceed One Thousand Dollars ($1,000.00), or be imprisoned in the penitentiary not exceeding two (2) years, and any person who shall be guilty of a second offense under this chapter, in addition to the penalties above described, may upon conviction, be both fined and imprisoned in the discretion of the court, and if a corporation, it shall be liable to forfeiture of all its rights and privileges as such, and the continuance of such establishment after the first conviction shall be deemed a second offense. It shall be the duty of the attorney general to institute proceedings for the forfeiture of the charter of any corporation making itself liable to such forfeiture under the provisions of this chapter.

HISTORY: Codes, 1930, § 1833; 1942, § 31; Laws, 1928, ch. 304.

Cross References —

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any felony violation, see §99-19-73.

§ 87-1-25. Unlawful to rent or lease premises to be used for conducting business prohibited by this chapter.

Any person, whether as agent or owner, who shall rent or lease any office or place of business to any person, association of persons or corporation, to be used in, or for the purpose of negotiating or effectuating the class of contracts prohibited by this chapter, knowing such person, association of persons or corporation to be engaged in such business, shall be guilty of a misdemeanor, and on conviction shall be punished as provided by law.

HISTORY: Codes, Hemingway’s 1917, § 1923; 1930, § 1836; 1942, § 34; Laws, 1908, ch. 118.

Cross References —

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see §99-19-73.

§ 87-1-27. Gambling and future contracts; witnesses denied privilege against self incrimination.

No person shall be excused in any prosecution under Sections 87-1-1 through 87-1-25, concerning gambling and future contracts, from testifying touching anything done by himself or others, contrary to the provisions of said sections; but any discovery made by a witness upon such examination shall not be used against him in any penal or criminal prosecution, and he shall be altogether pardoned of the offense so done or participated in by him.

HISTORY: Codes, Hemingway’s 1917, § 1917; 1930, § 1837; 1942, § 35; Laws, 1908, ch. 118.

Cross References —

Witness in gaming case being required to testify although it may incriminate him, see §99-17-27.

RESEARCH REFERENCES

Lawyers’ Edition.

Adequacy, under Federal Constitution, of immunity granted in lieu of privilege against self-incrimination-Supreme court cases. 32 L. Ed. 2d 869.

§ 87-1-29. Principal entitled to certain written information.

Every person shall furnish upon demand to any principal for whom such person has executed any contract of sale for the future delivery of any cotton, grain, stocks or other commodities a written instrument setting forth the name and location of the exchange, board of trade or similar institution upon which such contract has been executed, the date of execution of the contract and the name and address of the persons with whom such contract was executed and if such person shall refuse or neglect to furnish such statement upon reasonable demand, such refusal or neglect shall be prima facie evidence that such contract was an illegal contract within the provisions of Section 87-1-19, and that the person who executed it was engaged in the maintenance and operation of a “bucket shop” within the provisions of Section 87-1-21.

HISTORY: Codes, 1930, §§ 1830, 1832; 1942, § 30; Laws, 1928, ch. 304.

§ 87-1-31. Prohibition against buying or selling futures.

If any person shall buy or sell commodities of any kind, to be delivered at a future day, without agreeing and intending that the commodities are to be actually delivered in kind, and the price paid, he shall be guilty of a misdemeanor, and, on conviction, shall be punished as prescribed in section 87-1-33.

HISTORY: Codes, 1892, § 1121; 1906, § 1202; Hemingway’s 1917, § 932; 1930, § 959; 1942, § 2189.

Cross References —

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see §99-19-73.

RESEARCH REFERENCES

Am. Jur.

38 Am. Jur. 2d, Gambling §§ 37, 144 et seq., 165, 166.

JUDICIAL DECISIONS

1. In general.

The sale of cotton on call did not constitute gambling in futures, where the cotton thus sold contemplated actual delivery and not a settlement alone on the market quotations, although it would be a gambling transaction if the real intent of the parties was simply to speculate on the rise and fall of prices, and the goods were not to be delivered. Kiersky v. Hyman Mercantile Co., 192 Miss. 195, 4 So. 2d 881, 198 So. 574 (Miss. 1940).

Public policy of state is to condemn “dealing in futures.” Ascher & Baxter v. Edward Moyse & Co., 101 Miss. 36, 57 So. 299, 1911 Miss. LEXIS 96 (Miss. 1910).

Mississippi courts cannot deny to a judgment of a Missouri court, based upon an award in arbitration the full faith and credit secured by U. S. Const. Art. 4 § 1, to the judgments of sister states, simply because the original controversy grew out of a gambling transaction in futures in Mississippi, a misdemeanor under Mississippi law, which further provide that contracts of that character shall not be enforced by any court. Fauntleroy v. Lum, 210 U.S. 230, 28 S. Ct. 641, 52 L. Ed. 1039, 1908 U.S. LEXIS 1506 (U.S. 1908).

The Mississippi courts are not without jurisdiction of causes of action arising out of gambling transactions in futures because of the provision of Miss. Code 1892 § 2117, that contracts of that character “shall not be enforced by any court,” since such statute only lays down a rule of decision. Fauntleroy v. Lum, 210 U.S. 230, 28 S. Ct. 641, 52 L. Ed. 1039, 1908 U.S. LEXIS 1506 (U.S. 1908).

§ 87-1-33. Penalty for dealing in futures.

If any person shall deal in contracts called “futures,” or shall, by himself or his agent, directly or indirectly buy or sell any “future” contract, he shall be guilty of a misdemeanor, and, on conviction, shall be fined not less than Fifty Dollars ($50.00) nor more than Five Hundred Dollars ($500.00), and be imprisoned in the county jail not more than three (3) months.

HISTORY: Codes, 1892, § 1120; 1906, § 1201; Hemingway’s 1917, § 931; 1930, § 958; 1942, § 2188; Laws, 1882, p. 140.

Cross References —

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see §99-19-73.

RESEARCH REFERENCES

Am. Jur.

38 Am. Jur. 2d, Gambling §§ 37, 144 et seq., 165, 166.

JUDICIAL DECISIONS

1. In general.

Note in payment of debt under futures contract cannot be enforced by innocent transferee for value. Gray v. Robinson, 95 Miss. 1, 48 So. 226, 1909 Miss. LEXIS 198 (Miss. 1909).

A note given to a firm of brokers to close a balance advanced by them on behalf of the maker in dealings they had conducted for him in wheat futures on the board of trade of another state is void. Nixon v. Seal, 27 So. 875 (Miss. 1900).

Chapter 3. Power and Letters of Attorney

In General

§ 87-3-1. Letters may be acknowledged and recorded.

All letters of attorney intended to be used in this state may be acknowledged or proved as conveyances of land are required to be, and, when so acknowledged or proved, may be recorded in like manner; and copies thereof, duly certified, shall be admitted in evidence, without accounting for the nonproduction of the original.

HISTORY: Codes, 1857, ch. 37, art. 1; 1871, § 1895; 1880, § 1179; 1892, § 193; 1906, § 199; Hemingway’s 1917, § 2893; 1930, § 2948; 1942, § 244.

Cross References —

Invalidity of power of attorney for confessing judgment, see §11-7-187.

Signing of commercial paper by authorized representative, see §75-3-403.

RESEARCH REFERENCES

ALR.

What constitutes power coupled with interest within rule as to termination of agency. 28 A.L.R.2d 1243.

Am. Jur.

3 Am. Jur. 2d, Agency §§ 8, 21.

1B Am. Jur. Legal Forms 2d, Agency §§ 14:99 et seq. (powers of attorney).

CJS.

2A C.J.S., Agency § 24.

JUDICIAL DECISIONS

1. In general.

Chancery Court has jurisdiction to hear and adjudicate controversy involving validity and effect of power of attorney, which has not been acknowledged and recorded in manner of conveyance of land, with respect to conveyance of real property situated in Republic of Greece where all parties reside in Mississippi and have been effectively subjected to in personam jurisdiction of Chancery Court; court may enter personal judgment, even though controlling substantive law is that of Greece; final adjudication would effectively bind parties in Mississippi and presumably in all other states even though adjudication may not be enforceable in Greece as matter of right and maybe not even as matter of comity. Kountouris v. Varvaris, 476 So. 2d 599, 1985 Miss. LEXIS 2245 (Miss. 1985).

Parties to controversy involving validity and effect of power of attorney which has not been acknowledged and recorded in manner of conveyance of land with respect to conveyance of real property situated in Greece may stipulate to application and enforcement of Mississippi rules of law, rather than otherwise applicable Greek law; if parties do so, trial judge may proceed to adjudge all issues according to Mississippi law and enter final judgment which, subject to appeal, would be enforceable against parties in courts of Mississippi, even though, in Republic of Greece, judgment may not be enforceable. Kountouris v. Varvaris, 476 So. 2d 599, 1985 Miss. LEXIS 2245 (Miss. 1985).

Power of attorney need not be acknowledged or recorded in manner of instrument of conveyance of interest in land in order to authorize attorney in fact to make contracts on behalf of principal and to deal with personal property in Mississippi in which principal holds interest. Kountouris v. Varvaris, 476 So. 2d 599, 1985 Miss. LEXIS 2245 (Miss. 1985).

Before one empowered as attorney in fact may execute and deliver valid instrument of conveyance of interest in land in Mississippi prior in right to interests of (1) subsequent purchasers for value without notice or (2) subsequent judgment lien creditors, written power of attorney must be acknowledged and recorded in conformity with requirements generally applicable to instruments of conveyance of interests in land. Kountouris v. Varvaris, 476 So. 2d 599, 1985 Miss. LEXIS 2245 (Miss. 1985).

Before court may resolve question of whether power of attorney which has not been acknowledged and recorded in manner provided for instruments of conveyance of interests in land is valid and enforceable with respect to real property located in Republic of Greece, Greek law must be consulted to determine whether there is conflict between laws of Mississippi and those of Greece with respect to real property and powers of attorney. Kountouris v. Varvaris, 476 So. 2d 599, 1985 Miss. LEXIS 2245 (Miss. 1985).

§ 87-3-3. Conveyances by attorney in fact.

Conveyances of land, or contracts relating thereto, executed by an attorney in fact for his principal, and duly acknowledged or proved, shall have the same force and effect as if executed and acknowledged by the principal; and where a conveyance by an attorney is in execution of letters of attorney, so acknowledged or proved and recorded, it shall pass the interest of the principal though not formally executed in his name.

HISTORY: Codes, 1857, ch. 37, art. 2; 1871, § 1896; 1880, § 1180; 1892, § 194; 1906, § 200; Hemingway’s 1917, § 2894; 1930, § 2949; 1942, § 245.

Cross References —

Necessity that land conveyances be in writing, see §89-1-3.

RESEARCH REFERENCES

Am. Jur.

1B Am. Jur. Pl & Pr Forms (Rev), Agency, Form 312 (complaint, petition, or declaration-by devisees of principal-for recovery of property fraudulently conveyed by attorney in fact-for damages).

1B Am. Jur. Legal Forms 2d, Agency §§ 14:75 et seq. (powers of attorney).

JUDICIAL DECISIONS

1. In general.

Where a deed was first conveyed to a grandson by the decedent, then conveyed back to the estate, then conveyed to the grandson again by the executrix, acting under a purported power of attorney, and when the executrix sought to set aside the deed after the grandson died, and the property was to go to the grandson’s surviving wife, based on equity, the deed was not void ab initio when signed by the executrix even though letters of attorney were never recorded. Estate of Dykes v. Estate of Williams, 864 So. 2d 926, 2003 Miss. LEXIS 759 (Miss. 2003).

Before court may resolve question of whether power of attorney which has not been acknowledged and recorded in manner provided for instruments of conveyance of interests in land is valid and enforceable with respect to real property located in Republic of Greece, Greek law must be consulted to determine whether there is conflict between laws of Mississippi and those of Greece with respect to real property and powers of attorney. Kountouris v. Varvaris, 476 So. 2d 599, 1985 Miss. LEXIS 2245 (Miss. 1985).

Chancery Court has jurisdiction to hear and adjudicate controversy involving validity and effect of power of attorney, which has not been acknowledged and recorded in manner of conveyance of land, with respect to conveyance of real property situated in Republic of Greece where all parties reside in Mississippi and have been effectively subjected to in personam jurisdiction of Chancery Court; court may enter personal judgment, even though controlling substantive law is that of Greece; final adjudication would effectively bind parties in Mississippi and presumably in all other states even though adjudication may not be enforceable in Greece as matter of right and maybe not even as matter of comity. Kountouris v. Varvaris, 476 So. 2d 599, 1985 Miss. LEXIS 2245 (Miss. 1985).

Parties to controversy involving validity and effect of power of attorney which has not been acknowledged and recorded in manner of conveyance of land with respect to conveyance of real property situated in Greece may stipulate to application and enforcement of Mississippi rules of law, rather than otherwise applicable to Greek law; if parties do so, trial judge may proceed to adjudge all issues according to Mississippi law and enter final judgment which, subject to appeal, would no doubt be enforceable against parties in courts of Mississippi, even though, in Republic of Greece, judgment may not be enforceable. Kountouris v. Varvaris, 476 So. 2d 599, 1985 Miss. LEXIS 2245 (Miss. 1985).

Power of attorney need not be acknowledged or recorded in manner of instrument of conveyance of interest in land in order to authorize attorney in fact to make contracts on behalf of principal and to deal with personal property in Mississippi in which principal holds interest; however, before one empowered as attorney in fact may execute and deliver valid instrument of conveyance of interest in land in Mississippi prior in right to interests of (1) subsequent purchasers for value without notice or (2) subsequent judgment lien creditors, written power of attorney must be acknowledged and recorded in conformity with requirements generally applicable to instruments of conveyance of interests in land. Kountouris v. Varvaris, 476 So. 2d 599, 1985 Miss. LEXIS 2245 (Miss. 1985).

This section has no application to contracts by an attorney in fact for the making of a lease. Hytken v. Bianca, 186 Miss. 323, 186 So. 624, 188 So. 311, 1939 Miss. LEXIS 199 (Miss. 1939).

The attorney in fact of the beneficiary of a deed of trust cannot appoint a substituted trustee where the deed provides for the appointment “by the beneficiary or any holder of the notes secured or their legal representatives.” Allen v. Alliance Trust Co., 84 Miss. 319, 36 So. 285, 1904 Miss. LEXIS 40 (Miss. 1904).

It is always a question of intention whether or not an instrument be an execution of a power. Yates v. Clark, 56 Miss. 212, 1878 Miss. LEXIS 61 (Miss. 1878).

§ 87-3-5. When process may be executed on attorney.

When a person interested in the administration of an estate in any court in this state, shall appoint an attorney in fact, resident in the county where the court is held, to represent him therein, and shall cause the letter of appointment to be filed in the office of the clerk of the court in which the estate is administered, where it shall have the same effect as a demand for notice of an order or filing concerning the decedent’s estate, all process issued from the court touching the estate may be executed on such attorney, and, when so executed, shall have the same force and effect as if executed on the principal in person.

HISTORY: Codes, 1857, ch. 37, art. 4; 1871, § 1898; 1880, § 1181; 1892, § 195; 1906, § 201; Hemingway’s 1917, § 2895; 1930, § 2950; 1942, § 246; Laws, 1994, ch. 336, § 6, eff from and after July 1, 1994.

Editor’s Notes —

Laws of 1994, ch. 336, §§ 9 and 10 provide:

“SECTION 9. This act shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this act among states enacting it.

“SECTION 10. This act may be cited as the “Uniform Durable Power of Attorney Act.”

Laws of 1994, ch. 336, amended this section and Section 87-3-15, added Sections 87-3-101 through 87-3-113, and repealed Section 87-3-13.

§ 87-3-7. Special form not required; gifts given under a power of attorney.

  1. A letter of attorney to transact any business need only express plainly the authority conferred.
  2. If any power of attorney or other writing (a) authorizes an attorney-in-fact or other agent to do, execute or perform any act that the principal might or could do, or (b) evidences the principal’s intent to give the attorney-in-fact or agent full power to handle the principal’s affairs or deal with the principal’s property, the attorney-in-fact or agent shall have the power and authority to make gifts in any amount of any of the principal’s property to any individuals or to any organizations described in Sections 170(c) and 2522(a) of the Internal Revenue Code or corresponding future provisions of federal tax law, or both, in accordance with the principal’s personal history of making or joining in the making of lifetime gifts, including the authority to exercise all rights and powers granted to a fiduciary under the Revised Uniform Fiduciary Access to Digital Assets Act created under Chapter 23, Title 91.
  3. Subsection (2) as set forth above is declaratory of past and present law in the State of Mississippi, and shall be applied to all powers of attorney, whether executed before, on or after March 16, 1999.

HISTORY: Codes, 1880, § 1186; 1892, § 201; 1906, § 207; Hemingway’s 1917, § 2901; 1930, § 2956; 1942, § 252; Laws, 1999, ch. 405, § 1; Laws, 2017, ch. 419, § 19, eff from and after July 1, 2017.

Amendment Notes —

The 1999 amendment added (2) and (3).

The 2017 amendment added “including the authority to exercise…Chapter 23, Title 91” at the end of (2).

Federal Aspects—

Sections 170(c) and 2522(a) of the Internal Revenue Code, see 26 USCS §§ 170(c) and 2522(a), respectively.

JUDICIAL DECISIONS

1. In general.

2. Arbitration agreements.

3. Violation.

1. In general.

When an attorney-in-fact is prohibited from giving himself gifts from the principal’s property, extrinsic evidence of the principal’s intent to allow such gifts is not admissible, and while nothing prohibits a principal from expressly authorizing such gifts in writing, the attorney-in-fact cannot rely on an alleged oral authorization where the power of attorney itself expressly prohibits such gifts; the decedent’s alleged oral statements to her relative could not negate the express terms of her power of attorney that prohibited the relative from recognizing any personal gain, and any such transaction was void ab initio. Swank v. Covington (In re Estate of Hemphill), 186 So.3d 920, 2016 Miss. App. LEXIS 60 (Miss. Ct. App. 2016).

2. Arbitration agreements.

Where a son signed an arbitration agreement on the son’s mother’s behalf when the mother was admitted to a nursing home, the son brought a wrongful death action against defendants, and defendants sought to compel arbitration, the son lacked actual authority to sign the arbitration agreement on the mother’s behalf because no power of attorney was executed, and the Mississippi Supreme Court would regard the informal proof of authority in this case to be clearly insufficient to establish an express agency under Mississippi law. Gross v. GGNSC Southaven, LLC, 83 F. Supp. 3d 691, 2015 U.S. Dist. LEXIS 14071 (N.D. Miss. 2015), vacated, 817 F.3d 169, 2016 U.S. App. LEXIS 4749 (5th Cir. Miss. 2016).

Trial court did not err in failing to enforce an arbitration provision contained within an admission agreement entered into between a nursing home and a resident’s daughter who assertedly operated under a power of attorney because only an unauthenticated copy of the power of attorney appeared in the record. Miss. Care Ctr. of Greenville, LLC v. Hinyub, 975 So. 2d 211, 2008 Miss. LEXIS 16 (Miss. 2008).

The joint owner of three certificates of deposit was entitled to them by right of survivorship where the decedent’s attorney in fact under a power of attorney placed the joint owner’s name on the certificates of deposit, the attorney in fact and the joint owner never shared a confidential relationship while the attorney in fact acted for the decedent, and there was no evidence that the attorney in fact acted in bad faith. In re Dunn v. Reilly, 784 So. 2d 935, 2001 Miss. LEXIS 126 (Miss. 2001).

3. Violation.

Constructive trust was properly imposed on funds a daughter obtained from her deceased father’s accounts as the father’s attorney-in-fact because there was no history of the father making such gifts. Kilpatrick v. Jarvis (in re Estate of Jarvis), — So.3d —, 2017 Miss. App. LEXIS 378 (Miss. Ct. App. June 27, 2017).

Relative violated the power of attorney (POA) by making herself a joint owner of certain funds, and she personally benefitted from another transaction, and thus the estate was entitled to recover these certificate of deposit; however, as to another, the decedent had made the relative an owner of the account, and thus the relative did not personally gain from purchasing the new certificate of deposit and she only merely moved funds, and thus the funds attributable to those certificates of deposit were not tainted by any violation of the POA. Swank v. Covington (In re Estate of Hemphill), 186 So.3d 920, 2016 Miss. App. LEXIS 60 (Miss. Ct. App. 2016).

§ 87-3-9. Form of letter of attorney to convey land.

“Know all, that I, George Poindexter, of county, Mississippi, do hereby appoint Albert Brown, of county, my attorney in fact, with full power to sell and convey in fee simple, with general warranty [or without warranty, as the case may be] of title, that land situated in [describe it]. “Witness my signature, the of , A. D. . “George Poindexter.”

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HISTORY: Codes, 1880, § 1184; 1892, § 199; 1906, § 205; Hemingway’s 1917, § 2899; 1930, § 2954; 1942, § 250.

RESEARCH REFERENCES

Am. Jur.

1B Am. Jur. Legal Forms 2d, Agency § 14:103 (power of attorney to sell, convey, and receive purchase price for realty).

§ 87-3-11. Form to represent party in administration of estate.

“Know all, that I, C. C. Claiborne, of county, Mississippi, do hereby constitute Gerard C. Brandon, of county, in said state, my attorney in fact to represent me in the chancery court of said county of , in all matters pertaining to the administration in said court of the estate of Phoebe Jones, in which I am interested as an heir and distributee; and I consent that all process issued from said court touching said estate may be executed on my said attorney. “Witness my signature, the day of , A.D. . “C. C. Claiborne.”

Click to view

HISTORY: Codes, 1880, § 1185; 1892, § 200; 1906, § 206; Hemingway’s 1917, § 2900; 1930, § 2955; 1942, § 251.

§ 87-3-13. Repealed.

Repealed by Laws, 1994, ch. 336, § 8, eff from and after July 1, 1994.

Codes, 1892, § 198; 1906, § 204; Hemingway’s 1917, § 2898; 1930, § 2953; 1942, § 249; Laws, 1982, ch. 335, §§ 1, 2]

Editor’s Notes —

Former §87-3-13 was entitled: Continuance of power; disability or incompetence of principal.

§ 87-3-15. Death not an absolute revocation.

The death of the principal shall not operate a revocation of an agency created by him, other than by writing, as to one who, without notice of such death, in good faith and under circumstances repelling the imputation to him of fraud or negligence, deals with such agent.

HISTORY: Codes, 1880, § 1183; 1892, § 197; 1906, § 203; Hemingway’s 1917, § 2897; 1930, § 2952; 1942, § 248; Laws, 1994, ch. 336, § 7, eff from and after July 1, 1994.

Editor’s Notes —

Laws of 1994, ch. 336, §§ 9 and 10 provide:

“SECTION 9. This act shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this act among states enacting it.

“SECTION 10. This act may be cited as the “Uniform Durable Power of Attorney Act.”

Laws of 1994, ch. 336, amended this section and Section 87-3-5, added Sections 87-3-101 through 87-3-113, and repealed Section 87-3-13.

§ 87-3-17. Revocation of letters of attorney recordable.

Any writing revoking letters of attorney may, when acknowledged or proved as conveyances of land are required to be acknowledged or proved, be recorded in like manner, and with like effect from the time of being filed for record, in the office in which the letters revoked were recorded.

HISTORY: Codes, 1880, § 1182; 1892, § 196; 1906, § 202; Hemingway’s 1917, § 2896; 1930, § 2951; 1942, § 247.

Uniform Durable Power of Attorney Act

§ 87-3-101. Short title.

Sections 87-3-101 through 87-3-113 may be cited as the “Uniform Durable Power of Attorney Act.”

HISTORY: Laws, 1994, ch. 336, § 10, eff from and after July 1, 1994.

Editor’s Notes —

Laws of 1994, ch. 336, § 10 provides:

“SECTION 10. This act may be cited as the “Uniform Durable Power of Attorney Act.”

Laws of 1994, ch. 336, added Code Sections 87-3-101 through 87-3-113, amended Sections 87-3-5 and 87-3-15, and repealed Section 87-3-13.

Comparable Laws from other States —

California: Cal Prob Code § 4000 et seq.

Colorado: C.R.S. 15-14-701 et seq.

Hawaii: HRS § 551D-1 et seq.

Idaho: Idaho Code §15-12-101 et seq.

North Dakota: N.D. Cent. Code, §§ 30.1-30-01 et seq.

Oklahoma: 58 Okl. St. § 1071 et seq.

Tennessee: Tenn. Code Ann., §§34-6-101 et seq.

Virgin Islands: 15 V.I.C. § 1261 et seq.

West Virginia: W. Va. Code §39-4-1 et seq.

§ 87-3-103. Application and construction of sections 87-3-101 through 87-3-113.

Sections 87-3-101 through 87-3-113 shall be applied and construed to effectuate their general purpose to make uniform the law with respect to the subject of these sections among states enacting the Uniform Durable Power of Attorney Act.

HISTORY: Laws, 1994, ch. 336, § 9, eff from and after July 1, 1994.

RESEARCH REFERENCES

Am. Jur.

3 Am. Jur. 2d, Agency §§ 26, 36, 53, 55.

§ 87-3-105. Definition.

A durable power of attorney is a power of attorney by which a principal designates another his attorney in fact in writing and the writing contains the words “This power of attorney shall not be affected by subsequent disability or incapacity of the principal, or lapse of time,” or “This power of attorney shall become effective upon the disability or incapacity of the principal,” or similar words showing the intent of the principal that the authority conferred shall be exercisable notwithstanding the principal’s subsequent disability or incapacity, and, unless it states a time of termination, notwithstanding the lapse of time since the execution of the instrument.

HISTORY: Laws, 1994, ch. 336, § 1, eff from and after July 1, 1994.

RESEARCH REFERENCES

Am. Jur.

3 Am. Jur. 2d, Agency §§ 26, 36, 53, 55.

§ 87-3-107. Durable power of attorney not affected by lapse of time, disability or incapacity.

All acts done by an attorney in fact pursuant to a durable power of attorney during any period of disability or incapacity of the principal have the same effect and inure to the benefit of and bind the principal and his successors in interest as if the principal were competent and not disabled. Unless the instrument states a time of termination, the power is exercisable notwithstanding the lapse of time since the execution of the instrument.

HISTORY: Laws, 1994, ch. 336, § 2, eff from and after July 1, 1994.

RESEARCH REFERENCES

Am. Jur.

3 Am. Jur. 2d, Agency §§ 26, 36, 53, 55.

JUDICIAL DECISIONS

1. Contingency fee contracts.

Where the attorneys in fact entered into a contract of employment with an attorney to pursue a personal injury claim on the ward’s behalf, and the attorney, primarily out of caution, later submitted a proposed settlement to the chancery court for approval, the chancery court abused its discretion in reducing the lawyer’s fee from a 40 percent contingency fee as provided in the contract to a 33 1/3 percent contingency fee. The contract was not one entered into pursuant to a traditional probate matter and it was not a contract within the parameters of Miss. Unif. Ch. Ct. R. 6.12; the practical effect of the chancellor’s decision, upheld by the court of appeals, was a judicial abrogation of the provisions of the Uniform Durable Power of Attorney Act found in Miss. Code Ann. §§87-3-101 through87-3-113 and it also constituted a failure to uphold Miss. Const. art. 3, § 16 and U.S. Const. Art. I, § 10, cl. 1, which prohibited the impairment of obligations of contracts. In re Savell v. Renfroe, 876 So. 2d 308, 2004 Miss. LEXIS 800 (Miss. 2004).

§ 87-3-109. Relation of attorney in fact to court-appointed fiduciary.

  1. If, following execution of a durable power of attorney, a court of the principal’s domicile appoints a conservator, guardian of the estate, or other fiduciary charged with the management of all of the principal’s property or all of his property except specified exclusions, the attorney in fact is accountable to the fiduciary as well as to the principal. The fiduciary has the same power to revoke or amend the power of attorney that the principal would have had if he were not disabled or incapacitated.
  2. A principal may nominate, by a durable power of attorney, the conservator, guardian of his estate, or guardian of his person for consideration by the court if protective proceedings for the principal’s person or estate are thereafter commenced. The court shall make its appointment in accordance with the principal’s most recent nomination in a durable power of attorney except for good cause or disqualification.
  3. Any person acting in a fiduciary capacity shall exercise all rights and powers granted to a fiduciary under the Revised Uniform Fiduciary Access to Digital Assets Act created under Chapter 23, Title 91.

HISTORY: Laws, 1994, ch. 336, § 3; Laws, 2017, ch. 419, § 22, eff from and after July 1, 2017.

Amendment Notes —

The 2017 amendment added (3).

RESEARCH REFERENCES

Am. Jur.

3 Am. Jur. 2d, Agency §§ 26, 34, 55.

JUDICIAL DECISIONS

1. Construction.

2. Contingency fee contracts.

1. Construction.

Under Miss. Code Ann. §87-3-109(1), the attorney in fact and the fiduciary are clearly set out as two separate entities. Also, the statute states “if” a trial court appoints a conservator, etc., thus clearly revealing that such an appointment is not required. In re Savell v. Renfroe, 876 So. 2d 308, 2004 Miss. LEXIS 800 (Miss. 2004).

2. Contingency fee contracts.

Where the attorneys in fact entered into a contract of employment with an attorney to pursue a personal injury claim on the ward’s behalf, and the attorney, primarily out of caution, later submitted a proposed settlement to the chancery court for approval, the chancery court abused its discretion in reducing the lawyer’s fee from a 40 percent contingency fee as provided in the contract to a 33 1/3 percent contingency fee. The contract was not one entered into pursuant to a traditional probate matter and it was not a contract within the parameters of Miss. Unif. Ch. Ct. R. 6.12; the practical effect of the chancellor’s decision, upheld by the court of appeals, was a judicial abrogation of the provisions of the Uniform Durable Power of Attorney Act found in Miss. Code Ann. §§87-3-101 through87-3-113 and it also constituted a failure to uphold Miss. Const. art. 3, § 16 and U.S. Const. Art. I, § 10, cl. 1, which prohibited the impairment of obligations of contracts. In re Savell v. Renfroe, 876 So. 2d 308, 2004 Miss. LEXIS 800 (Miss. 2004).

§ 87-3-111. Power of attorney not revoked until notice.

  1. The death of a principal who has executed a written power of attorney, durable or otherwise, does not revoke or terminate the agency as to the attorney in fact or other person, who, without actual knowledge of the death of the principal, acts in good faith under the power. Any action so taken, unless otherwise invalid or unenforceable, binds successors in interest of the principal.
  2. The disability or incapacity of a principal who has previously executed a written power of attorney that is not a durable power does not revoke or terminate the agency as to the attorney in fact or other person, who, without actual knowledge of the disability or incapacity of the principal, acts in good faith under the power. Any action so taken, unless otherwise invalid or unenforceable, binds the principal and his successors in interest.

HISTORY: Laws, 1994, ch. 336, § 4, eff from and after July 1, 1994.

RESEARCH REFERENCES

Am. Jur.

3 Am. Jur. 2d, Agency §§ 26, 52, 53.

§ 87-3-113. Proof of continuance of durable and other powers of attorney by affidavit.

As to acts undertaken in good faith reliance thereon, an affidavit executed by the attorney in fact under a power of attorney, durable or otherwise, stating that he did not have at the time of exercise of the power actual knowledge of the termination of the power by revocation or of the principal’s death, disability, or incapacity is conclusive proof of the nonrevocation or nontermination of the power at that time. If the exercise of the power of attorney requires execution and delivery of any instrument that is recordable, the affidavit when authenticated for record is likewise recordable. This section does not affect any provision in a power of attorney for its termination by expiration of time or occurrence of an event other than express revocation or a change in the principal’s capacity.

HISTORY: Laws, 1994, ch. 336, § 5, eff from and after July 1, 1994.

RESEARCH REFERENCES

Am. Jur.

3 Am. Jur. 2d, Agency §§ 26, 36, 53, 55.

CJS.

3 C.J.S., Agency § 512.

Chapter 5. Principal and Surety

§ 87-5-1. Surety discharged if creditor fails to sue the principal debtor when notified.

Any person bound as surety or accommodation indorser for another, may, at any time after the debt has become due or liability been incurred, give notice in writing to the creditor to commence and prosecute legal proceedings against the principal debtor, if living and resident within this state, for the recovery of the debt; and if the creditor fails to commence legal proceedings by the next term of the court in which the same shall be instituted, to be held after the expiration of thirty (30) days from the giving of the notice, and to prosecute the same to effect, the surety who shall have given the notice shall be discharged from liability. It shall not be lawful to plead or to give in evidence under this section a notice not in writing, and any act of the creditor shall not be a waiver of notice in writing as herein required.

HISTORY: Codes, 1857, ch. 46, art. 1; 1871, § 2257; 1880, § 997; 1892, § 3276; 1906, § 3731; Hemingway’s 1917, § 2907; 1930, § 2957; 1942, § 253.

Cross References —

Final judgment upon garnishment against surety or accommodation indorser, see §11-35-55.

Order of liability of indorsers of commercial paper, see §75-3-414.

Suits on indorsed bills and notes, see §75-13-3.

Effect of releasing one or more joint debtors, see §85-5-1.

RESEARCH REFERENCES

ALR.

Liability of surety on infant’s contract or obligation, where contract is disaffirmed by infant. 44 A.L.R.3d 1417.

Creditor’s duty of disclosure to surety or guarantor after inception of suretyship or guaranty. 63 A.L.R.4th 678.

Am. Jur.

74 Am. Jur. 2d, Suretyship §§ 59 et seq.

23 Am. Jur. Pl & Pr Forms (Rev) Suretyship Form 65 (answer alleging as defense of surety failure to proceed against principle).

CJS.

72 C.J.S., Principal and Surety §§ 215, 216 et seq.

JUDICIAL DECISIONS

1. Construction and application.

2. Sufficiency of notice.

3. Waiver of right to discharge from liability.

1. Construction and application.

Where a contract under which a landowner agreed to be obligated to a lender for the debts of his tenant, was one of guaranty rather than suretyship, and further provided that the lender was not bound to exhaust its recourse against the tenant before being entitled to payment from the landowner, the landowner’s demand that the lender proceed against the tenant did not affect its liability for the unpaid loans. Brent v. National Bank of Commerce of Columbus, 258 So. 2d 430, 1972 Miss. LEXIS 1501 (Miss. 1972).

This provision must be strictly construed. Standard Acci. Ins. Co. v. Standard Oil Co., 242 Miss. 11, 133 So. 2d 539, 1961 Miss. LEXIS 523 (Miss. 1961).

This section is not applicable to release a surety on a public construction bond from liability to a subcontractor’s supplier. Standard Acci. Ins. Co. v. Standard Oil Co., 242 Miss. 11, 133 So. 2d 539, 1961 Miss. LEXIS 523 (Miss. 1961).

Where mortgagee looked to others than mortgagors for payment of indebtedness for ten years after conveyance by mortgagors to purchasers who assumed indebtedness, gave no notice to mortgagor of invalid foreclosure proceeding, and allowed principal and interest to remain in default for several years without suit, mortgagor held not discharged as surety for her grantees, because of mortgagee’s want of diligence, especially where mortgagor made no attempt to put creditor in default under statute. North American Life Ins. Co. v. Smith, 178 Miss. 238, 172 So. 135, 1937 Miss. LEXIS 175 (Miss. 1937).

Mere want of diligence, indulgence, delay not amounting to bar of statute of limitations, or passiveness of creditor towards principal debtor, does not discharge surety. North American Life Ins. Co. v. Smith, 178 Miss. 238, 172 So. 135, 1937 Miss. LEXIS 175 (Miss. 1937).

Indulgences granted to maker of note by holder held not to relieve one who signed note as surety and accommodation indorser from liability on note, where indulgences were not for definite time or supported by consideration. Love v. Clark, 171 Miss. 758, 158 So. 484, 1935 Miss. LEXIS 12 (Miss. 1935).

Suit by nonresident in federal court having jurisdiction was sufficient compliance with statute requiring proceedings after notice in writing by surety. Mississippi Valley Trust Co. v. Brewer, 157 Miss. 890, 128 So. 83, 1930 Miss. LEXIS 289 (Miss. 1930).

That suit instituted by creditor after written notice by surety had not progressed to judgment did not establish that it was not prosecuted to effect. Mississippi Valley Trust Co. v. Brewer, 157 Miss. 890, 128 So. 83, 1930 Miss. LEXIS 289 (Miss. 1930).

This section is not repealed by the Negotiable Instruments Act. First Nat'l Bank v. Rau, 146 Miss. 520, 112 So. 688, 1927 Miss. LEXIS 264 (Miss. 1927); North American Life Ins. Co. v. Smith, 178 Miss. 238, 172 So. 135, 1937 Miss. LEXIS 175 (Miss. 1937).

Bank does not owe surety on note duty to apply or credit amount principal may have on deposit at or after maturity of the note to the payment thereof. Moreland v. People's Bank of Waynesboro, 114 Miss. 203, 74 So. 828, 1917 Miss. LEXIS 22 (Miss. 1917).

Where the principal in consideration of a trust deed to secure the indebtedness granted an extension of time for a definite period, the sureties were relieved. Miller v. Lewis, 103 Miss. 598, 60 So. 654, 1912 Miss. LEXIS 204 (Miss. 1913).

A judgment discharging a surety by reason of his release, under this section, if such judgment is not appealed from, will bar a proceeding for contribution by a co-surety held liable in the same judgment, and the discharge of one surety does not discharge his co-sureties. Ruff v. Montgomery, 83 Miss. 185, 36 So. 67, 1903 Miss. LEXIS 31 (Miss. 1904).

A plea setting up a discharge under the statute, which does not show compliance with it, is defective. Keirn v. Andrews, 59 Miss. 39, 1881 Miss. LEXIS 70 (Miss. 1881).

The statute applies to all the modes and instruments by which suretyship may arise, and the surety’s discharge under the statute is as effectual in a court of law as in equity. Smith v. Clopton, 48 Miss. 66, 1873 Miss. LEXIS 36 (Miss. 1873).

2. Sufficiency of notice.

Letter held to be sufficient notice. Bishop v. Currie-McGraw Co., 133 Miss. 517, 97 So. 886, 1923 Miss. LEXIS 164 (Miss. 1923).

Notice such as will discharge a surety must be clear and explicit, and must amount to a demand that the creditor commence and prosecute legal proceedings against the principal debtor. Graham v. Pepple, 132 Miss. 612, 97 So. 180, 1923 Miss. LEXIS 95 (Miss. 1923).

Notice given by one surety in his own behalf will not inure to the benefit of his co-sureties, and failing to sue after such notice will not discharge such co-sureties. Ramey v. Purvis, 38 Miss. 499, 1860 Miss. LEXIS 21 (Miss. 1860).

3. Waiver of right to discharge from liability.

Where a tenant’s past due notes were renewed at the request of the landowner who was obligated under a contract of guaranty for the debts of the tenant, and the contract of guaranty authorized the lender to grant an extension of the tenant’s debts without notice to the landowner, and provided that the discontinuance of the guaranty would not affect the guarantor’s liability on existing debts, the lender’s execution of an FHA nondisturbance agreement not to repossess or in any way disturb the property of the tenant until a specified date, did not discharge the landowner’s liability under the contract of guaranty. Brent v. National Bank of Commerce of Columbus, 258 So. 2d 430, 1972 Miss. LEXIS 1501 (Miss. 1972).

Benefits under statute discharging sureties unless creditor brings suit within specified time after statutory notice held not waived by contract whereby accommodation sureties waived notice of time extension and also waived necessity for creditor first to exhaust remedies against principal. Warren v. W. T. Raleigh Co., 174 Miss. 603, 165 So. 436, 1936 Miss. LEXIS 207 (Miss. 1936).

Stipulation over accommodation indorser’s signature held not waiver of right to discharge from liability on creditor’s failure to commence proceedings after notice. First Nat'l Bank v. Rau, 146 Miss. 520, 112 So. 688, 1927 Miss. LEXIS 264 (Miss. 1927).

§ 87-5-3. Surety paying or tendering the debt.

When any person who is bound as surety or indorser for another on any writing, for the payment of money or other thing, which shall remain unpaid, in whole or in part, by the principal debtor, after the maturity thereof, shall pay or tender to the creditor or holder of such writing the amount due thereon, the creditor or holder shall assign such writing to the surety or indorser paying or tendering the money or other thing due; and such assignee may have an action in his own name against the principal debtor upon the writing, to recover the amount paid in satisfaction of it.

HISTORY: Codes, Hutchinson’s 1848, ch. 39, art. 1 (10); 1857, ch. 46, art. 3; 1871, § 2259; 1880, § 999; 1892, § 3277; 1906, § 3732; Hemingway’s 1917, § 2908; 1930, § 2958; 1942, § 254.

Cross References —

Bonds securing public construction contracts and suits thereon, see §§31-5-51 et seq.

Remedy of party paying execution, see §75-13-9.

RESEARCH REFERENCES

Am. Jur.

74 Am. Jur. 2d, Suretyship §§ 139 et seq.

§ 87-5-5. Surety company may maintain action against defaulting principal.

When any surety or guaranty company has executed any bond or other contract as surety for any person, company or corporation, guaranteeing the performance of any duty or the payment of any money, and such person, company or corporation make default therein and said surety or guaranty company pays the amount for which the party insured or guaranteed is legally liable, the said surety or guaranty company becomes thereby subrogated to all the rights of the party in whose favor the security or guaranty is given, and such company may have and maintain an action against the principal in its own name to recover the amount paid out in satisfaction thereof.

HISTORY: Codes, 1906, § 3733; Hemingway’s 1917, § 2909; 1930, § 2959; 1942, § 255.

Cross References —

Legislature’s power regarding official bonds, see MS Const Art. 4, § 82.

Bonds securing public construction contracts and suits thereon, see §§31-5-51 et seq.

Surety companies generally, see §§83-27-1 et seq.

RESEARCH REFERENCES

Am. Jur.

74 Am. Jur. 2d, Suretyship §§ 139 et seq.

23 Am. Jur. Pl & Pr Forms (Rev) Suretyship Forms 4-10 (complaint, petition, or declaration by surety seeking reimbursement from principal).

JUDICIAL DECISIONS

1. In general.

In addition to paying a premium, the recipient of an indemnity bond must also prove to the surety company that he has adequate assets to permit recovery of some portion of the loss if the bond is ever called upon since a surety may seek reimbursement from the principal after payment on a bond. First Southwest Corp. v. Lampton, 724 So. 2d 988, 1998 Miss. App. LEXIS 1060 (Miss. Ct. App. 1998).

General contractor would be granted relief from stay to assert setoff against prepetition obligations to debtor where general contractor was obliged to pay debtor’s materialmen on project. In re E & D Electric Co., 68 B.R. 3, 1986 Bankr. LEXIS 5907 (Bankr. S.D. Miss. 1986).

A surety’s right of subrogation is unaffected by the filing requirements of the Uniform Commercial Code, since the assignment in a bond application is in aid of an equitable right but does not create that right, and the rights of the surety to subrogation for its losses are founded upon equitable principles independent of any assignment of contract proceeds in the application of the contractor. Travelers Indem. Co. v. Clark, 254 So. 2d 741, 1971 Miss. LEXIS 1270 (Miss. 1971).

A surety’s right to subrogation for amounts paid to materialmen and laborers was not limited to the 10 percent retainage provided for in the construction contract, the contractor’s performance of which was guaranteed by the surety, but instead whatever funds were in the hands of the contractor’s debtors under such contract at the time of the appointment of a receiver for the contractor should be made available to the surety to the extent necessary to indemnify the surety for losses sustained on the construction project involved. Travelers Indem. Co. v. Clark, 254 So. 2d 741, 1971 Miss. LEXIS 1270 (Miss. 1971).

In an action against a municipal policeman and the surety upon his official bond for assault upon the plaintiff by the policeman, the trial court did not err in refusing to instruct that the surety company would not be liable for anything unless the policeman was first liable and, if the surety was required to pay any part of the judgment, then the individual defendant would be obligated to reimburse the surety for that amount. Vanderslice v. Shoemake, 233 Miss. 523, 102 So. 2d 804, 1958 Miss. LEXIS 411 (Miss. 1958).

A surety on a bond, given in pursuance of this statute, is not entitled to claim against the receiver of the insolvent bank the amount which it paid out as interest and attorney’s fees in resisting the state’s claim on the bond for the amount of the deposit. Union Indem. Co. v. Stevens, 57 F.2d 839, 1932 U.S. App. LEXIS 4075 (5th Cir. Miss. 1932).

Evidence tending to negative dishonesty or corrupt motives held erroneously excluded in surety’s action to recover sum paid on indemnity bond. Seelbinder v. American Surety Co., 155 Miss. 21, 119 So. 357, 1928 Miss. LEXIS 391 (Miss. 1928).

§ 87-5-7. Surety or indorser, when sued alone, must notify principal and make defense.

A surety or indorser shall not suffer judgment or a decree to be rendered against him by confession or default, without the consent of the principal debtor. And a surety or indorser who shall be sued alone, shall give notice of the suit to the principal debtor, if resident in this state, and if he have knowledge or information of any defense to the action which the principal debtor has, he shall make such defense; and if a surety or indorser, when sued alone, fail to give such notice to the principal debtor, in case he be a resident of this state, or to make such defense in the action of which he has knowledge or information, he shall be barred of all recovery against the principal debtor in case the principal debtor have at the time a good defense to the action of the creditor.

HISTORY: Codes, 1857, ch. 46, art. 4; 1871, § 2260; 1880, § 1000; 1892, § 3278; 1906, § 3734; Hemingway’s 1917, § 2910; 1930, § 2960; 1942, § 256.

RESEARCH REFERENCES

Am. Jur.

23 Am. Jur. Pl & Pr Forms (Rev) Suretyship Form 1 (notice by surety to principal to defendant action).

JUDICIAL DECISIONS

1. In general.

This section is not applicable to an action by a surety against a sheriff to recover on a written contract executed by the sheriff in connection with, and in consideration of, surety’s execution as surety of defendant’s bond to sheriff. American Surety Co. v. Inmon, 187 F.2d 784, 1951 U.S. App. LEXIS 2312 (5th Cir. Miss. 1951).

Statute relating to liability of surety on sheriff’s bond held not in conflict with statute relating to recovery against sureties generally. State ex rel. Weems v. United States Fidelity & Guaranty Co., 157 Miss. 740, 128 So. 503, 1930 Miss. LEXIS 318 (Miss. 1930).

§ 87-5-9. Surety paying a judgment.

If a judgment or decree be rendered by any court against a principal debtor and his surety, or against his sureties, and one or more of his sureties shall pay and satisfy the judgment or decree, the same shall, by operation of law, be thereby transferred and assigned to the surety or sureties paying and satisfying it, who shall have all the liens and equities of such judgment or decree and of the debt or claim on which the same is founded, which the creditor therein had. The surety, on making affidavit of his suretyship, and of his having paid the judgment or decree, and filing the affidavit and any evidence of such payment that he may hold, with the officer authorized to issue execution on the judgment or decree to whom he may apply for execution, shall be entitled to have execution issued on the judgment or decree, in the name of the plaintiff or complainant against the defendants therein, as if the judgment or decree had not been paid and satisfied. The officer issuing the execution shall indorse thereon that it is issued for the use of the surety who paid the judgment or decree; and the officer serving it shall collect the money, for the use of the surety, from the principal debtor, if he be a party to the judgment or decree and the money can be made out of him; and, if not, he shall collect a ratable proportion of the money from each of the co-sureties.

HISTORY: Codes, Hutchinson’s 1848, ch. 39, art. 2 (160); 1857, ch. 46, art. 2; 1871, § 2258; 1880, § 998; 1892, § 3279; 1906, § 3735; Hemingway’s 1917, § 2911; 1930, § 2961; 1942, § 257.

Cross References —

Enrollment of judgments and satisfaction thereof, see §11-7-189.

Remedy of party paying execution, see §75-13-9.

RESEARCH REFERENCES

Am. Jur.

73 Am. Jur. 2d, Subrogation §§ 53 et seq.

CJS.

83 C.J.S., Subrogation §§ 67 et seq.

JUDICIAL DECISIONS

1. In general.

A surety is entitled to subrogation as against the receiver to the extent of all claims paid by it pursuant to the obligation of its bonds. New Amsterdam Casualty Co. v. Wood, 213 Miss. 499, 57 So. 2d 141, 1952 Miss. LEXIS 390 (Miss. 1952).

Subrogation is allowed surety only in the event that the corporation or its receiver may have resources on hand after the payment of the claims of the defrauded stockholders. New Amsterdam Casualty Co. v. Wood, 213 Miss. 499, 57 So. 2d 141, 1952 Miss. LEXIS 390 (Miss. 1952).

Execution issued in the name of the complainant in the decree held not invalid so as to authorize injunction restraining sale thereunder although the decree had been paid by a surety, and the execution had not been endorsed that it was issued for the use of the surety. Edwards Bros. v. Bilbo, 138 Miss. 484, 103 So. 209, 1925 Miss. LEXIS 38 (Miss. 1925).

Surety paying a judgment has all the liens and equities therein that the judgment creditor had, both against the principal and other persons against whom the judgment was rendered. Quinn v. Alexander, 125 Miss. 690, 88 So. 170, 1921 Miss. LEXIS 147 (Miss. 1921).

Where a bond was conditioned for the principal’s personal superintendence of a building, in an action thereon it was error to exclude evidence of expenditures while the principal was absent. First Baptist Church v. Hendricks, 107 Miss. 267, 65 So. 244, 1914 Miss. LEXIS 77 (Miss. 1914).

Surety on a draft cannot recover of the acceptor more than he was compelled to pay to release himself from a judgment thereon. Wainwright v. Atkins, 104 Miss. 438, 61 So. 454, 1913 Miss. LEXIS 49 (Miss. 1913).

Such surety may recover of the principal debtor the full amount paid in satisfaction of the judgment. Wainwright v. Atkins, 104 Miss. 438, 61 So. 454, 1913 Miss. LEXIS 49 (Miss. 1913).

Sureties on the replevin bond of a claimant of goods under attachment, who are the beneficiaries in a deed of trust made to indemnify them against loss by reason of their suretyship, have no right to enforce the deed of trust until a judgment has been rendered against the claimant and paid by them, and in the absence of such right the attaching creditor cannot be subrogated thereto. Weir-Booger Dry Goods Co. v. Kelly, 80 Miss. 64, 31 So. 808, 1902 Miss. LEXIS 257 (Miss. 1902).

A judgment in replevin against principal and surety on a replevin bond, if rendered after the death of the surety, is absolutely void as to both. Weis v. Aaron, 75 Miss. 138, 21 So. 763, 1897 Miss. LEXIS 98 (Miss. 1897), overruled, Bank of Philadelphia v. Posey, 130 Miss. 530, 92 So. 840, 1922 Miss. LEXIS 176 (Miss. 1922).

Under this statute, a surety is subrogated to the rights of the judgment-creditor and to nothing more; and the judgment or decree will be barred in his hands at the same time it would have been barred in the hands of the judgment-creditor. Partee v. Mathews, 53 Miss. 140, 1876 Miss. LEXIS 48 (Miss. 1876).

§ 87-5-11. Bona fide purchasers and encumbrancers protected.

If such judgment or decree as is referred to in Section 87-5-9 shall appear to be satisfied, either on the judgment-roll, execution docket, or other record, property conveyed or encumbered thereafter by the principal debtor or sureties to any one for a valuable consideration, without notice of the fact that it was paid and satisfied by a surety, shall not be liable to such judgment or decree, unless at the time the property was conveyed or encumbranced, the record which showed the satisfaction of the judgment or decree, shall also show the fact that it was paid and satisfied by a surety, and the name of such surety.

HISTORY: Codes, 1892, § 3280; 1906, § 3736; Hemingway’s 1917, § 2912; 1930, § 2962; 1942, § 258.

Cross References —

Conveyances and mortgages being made void if not lodged for record, see §89-5-3.

JUDICIAL DECISIONS

1. In general.

While under §87-5-9, mere payment of a judgment by a surety does not release the principal or co-sureties, and execution may issue against them, where a surety who pays a judgment procures the plaintiff to indorse upon the record of the judgment a receipt reciting that it is “in full payment of this judgment and the same is fully satisfied, and she is authorized to do therewith as she sees proper,” the judgment cannot afterwards be asserted as against a subsequent bona fide purchaser of lands from the principal debtor. Taylor v. Alliance Trust Co., 71 Miss. 694, 15 So. 121, 1893 Miss. LEXIS 81 (Miss. 1893); Yates v. Mead, 68 Miss. 787, 10 So. 75 (Miss. 1891).

§ 87-5-13. Execution against principal and sureties; how served.

When execution shall issue on any judgment or decree rendered against a principal and surety, and the surety shall make affidavit that he is only surety on the instrument upon which the judgment or decree is founded, and deliver it to the officer serving the execution, the officer shall make the money, or as much thereof as possible, out of the property of the principal debtor, if he have any in the county to which the execution is issued subject to execution; and the officer shall return the affidavit with the execution.

HISTORY: Codes, Hutchinson’s 1848, ch. 39, art. 3 (47); 1857, ch. 46, art. 5; 1871, § 2261; 1880, § 1001; 1892, § 3281; 1906, § 3737; Hemingway’s 1917, § 2913; 1930, § 2963; 1942, § 259.

Cross References —

How executions are issued and returned, see §13-3-113.

JUDICIAL DECISIONS

1. In general.

If the fact of suretyship does not so appear, the affidavit of the surety is necessary. Walker v. Gilbert, 21 Miss. 693, 1850 Miss. LEXIS 87 (Miss. 1850); Work v. Harper, 31 Miss. 107, 1856 Miss. LEXIS 42 (Miss. 1856).

When the fact of suretyship appears on the execution in the hands of the officer, the affidavit of the surety is not necessary. Moss v. Agricultural Bank, 12 Miss. 726, 1841 Miss. LEXIS 69 (Miss. 1841).

Chapter 7. Improvements to Real Property

§ 87-7-1. Repealed.

Repealed by Laws, 1985, ch. 505, § 16, effective from and after January 1, 1986.

[En, Laws, 1985, ch. 335]

Editor’s Notes —

Former Section 87-7-1 provided for payments to subcontractors and suppliers.

§ 87-7-3. Payment of contractors; penalty for late payment.

All sums due contractors under all construction contracts, except public construction contracts, shall be paid as follows:

Partial, progress or interim payments: all partial, progress or interim payments or monies owed contractors shall be paid when due and payable under the terms of the contract. If they are not paid within thirty (30) calendar days from the day they were due and payable, then they shall bear interest from the due date at the rate of one percent (1%) per month until fully paid.

Final payments: The final payment of all monies owed contractors shall be due and payable:

At the completion of the project or after the work has been substantially completed in accordance with the terms and provisions of the contract;

When the owner beneficially uses or occupies the project except in the case where the project involves renovation or alteration to an existing facility in which the owner maintains beneficial use or occupancy during the course of the project; or

When the project is certified as having been completed by the architect or engineer authorized to make such certification, whichever event shall first occur.

If the contractor is not paid in full within thirty (30) calendar days from the first occurrence of one (1) of the above-mentioned events, then the final payment shall bear interest from the date of such first occurrence at the rate of one percent (1%) per month until fully paid.

In no event shall the final payment due the contractor be made until the consent of the contractor’s surety has been obtained in writing and delivered to the proper contracting authority.

HISTORY: Laws, 1985, ch. 505, § 3; Laws, 2006, ch. 330, § 1, eff from and after July 1, 2006.

Amendment Notes —

The 2006 amendment deleted “prime” preceding “contractors” in the introductory paragraph; and substituted “thirty (30) calendar days” for “sixty (60) calendar days” in the last sentence of (a) and in the next-to-last paragraph of (b).

JUDICIAL DECISIONS

2. Prejudgment interest not available.

3. Requirement of a contract with party to be charged.

4. Liquidated damages requirement.

2. Prejudgment interest not available.

Award of prejudgment interest under Miss. Code Ann. §75-17-1 in a contractor’s claim was error because the principal amount was not fixed before judgment and was unliquidated; the amount of claim was clearly in dispute, there was no finding that the owners disputed the amount owed in bad faith, and the trial court resorted to quantum meruit to fix the exact amount of damages. The same considerations which precluded a recovery of prejudgment interest for unliquidated amounts owed under §75-17-1 applied to Miss. Code Ann. §87-7-3. Falkner v. Stubbs, 2013 Miss. LEXIS 65 (Miss. Mar. 7, 2013), op. withdrawn, 2013 Miss. LEXIS 431 (Miss. Aug. 22, 2013).

3. Requirement of a contract with party to be charged.

While plaintiff contractor was entitled to certain legal fees and amounts due under a settlement agreement with defendants, a lessor and lessee of renovated property, its construction contact was only with the lessee and thus, no statutory penalties were available against the lessor under Miss. Code Ann. §87-7-3. The Stellar Group v. Pilgrim's Pride Corp., 2007 U.S. Dist. LEXIS 85242 (S.D. Miss. Nov. 13, 2007).

4. Liquidated damages requirement.

Where appellee’s recovery was based on an oral contract, he was not entitled to prejudgment interest because there was a bona fide dispute as to the amount of damages, and prejudgment interest was unavailable under Miss. Code Ann. §§75-17-1 or87-7-3 where the damages were unliquidated. Falkner v. Stubbs, 121 So.3d 899, 2013 Miss. LEXIS 428 (Miss. 2013).

§ 87-7-5. Proportional payment of subcontractors; penalty for late payment.

When a contractor receives any payment from the owner under a construction contract, other than a public construction contract, the contractor shall, upon receipt of that payment, pay each subcontractor and material supplier in proportion to the percentage of work completed by each such subcontractor and material supplier. If for any reason the contractor receives less than the full payment due from the owner, the contractor shall be obligated to disburse on a pro rata basis those funds received, with the contractor, subcontractors and material suppliers each receiving a prorated portion based on the amount due on the payment. If the contractor without reasonable cause fails to make any payment to his subcontractors and material suppliers within fifteen (15) days after the receipt of payment from the owner under the construction contract, the contractor shall pay to his subcontractors and material suppliers, in addition to the payment due them, a penalty in the amount of one-half of one percent (1/2 of 1%) per day of the delinquency, calculated from the expiration of the fifteen-day period until fully paid. The total penalty shall not exceed fifteen percent (15%) of the outstanding balance due. The provisions of this section shall not be applicable to contracts for the construction of single-family dwellings.

HISTORY: Laws, 1985, ch. 505, § 4; Laws, 2006, ch. 330, § 2, eff from and after July 1, 2006.

Amendment Notes —

The 2006 amendment deleted “prime” preceding “contractor” throughout the section.

§ 87-7-7. Contractor negotiation of draft payable to contractor and other parties; written signed authorization of co-payees required; penalties.

  1. A contractor who undertakes to negotiate a draft made payable to the contractor and any other party must first obtain an endorsement or other written signed authorization of every co-payee on the draft if the draft is tendered in payment for materials or equipment furnished or labor performed by the owner, laborer, supplier or equipment dealer.
  2. A contractor who negotiates a draft without first obtaining an endorsement or other written signed authorization required under this section is guilty of a misdemeanor and shall be subject to a fine not to exceed Five Hundred Dollars ($500.00) per violation, and shall also be ordered by the court to make full restitution to the owner, laborer, supplier or equipment dealer who is entitled to payment from the proceeds of the draft, as well as reasonable attorney’s fees incurred by any party to whom restitution is ordered.

HISTORY: Laws, 2012, ch. 506, § 1, eff from and after July 1, 2012.

Cross References —

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see §99-19-73.

§ 87-7-9. Contracts, subcontracts or purchase orders with provisions relating to real property improvement that make the contract subject to laws of another state or restrict forum for litigation, arbitration or dispute resolution to another state are void; applicability.

  1. A provision in any contract, subcontract, or purchase order for the improvement of real property in this state, or to provide materials therefor, is void and against public policy if it makes the contract, subcontract, or purchase order subject to the laws of another state, or provides that the exclusive forum for any litigation, arbitration, or other dispute resolution process be located in another state.
  2. The provisions of this section apply only to contracts, agreements and purchase orders:
    1. Entered into on or after July 1, 2018;
    2. Only if at least one (1) of the parties is a Mississippi resident; and
    3. Only if entered into between any two (2) or more of the following persons and no others: the owner of the real property improved or to be improved, a contractor, subcontractor, materialman or design professional. As used in this section, “contractor”, “subcontractor”, “materialman” and “design professional” shall have the meanings ascribed in Section 85-7-401.
  3. For purposes of this section, “Mississippi resident” means any natural person domiciled in Mississippi or any business entity having a principal place of business in Mississippi.

HISTORY: Laws, 2018, ch. 455, § 1, eff from and after July 1, 2018.

Chapter 9. General Provisions

§ 87-9-1. Manufacturer’s taxes required to be paid under contract; alteration of timing; security.

  1. When a contract calls for one (1) party to reimburse the other party for the federal manufacturer’s excise tax levied by 26 USCA4081 through 26 USCA4083, whether as a separate item or as part of the price, the party required to make the reimbursement may tender payment for the taxes one (1) business day before the time that the other party is required to remit the taxes to the United States Internal Revenue Service.
  2. If a party elects to make payment as provided in subsection (1) of this section, the other party may demand security for the payment of the taxes in proportion to the amount the taxes represent compared to the security demanded on the contract as a whole. The other party may not change the other payment terms of the contract without a valid business reason other than the exercise of the option as provided in subsection (1) of this section, except to require the payment of the taxes under the option to be made by electronic transfer of funds.
  3. The party exercising the option set out in subsection (1) of this section shall notify the other party in writing of the intent to exercise the payment option and the effective date of the exercise which shall not be earlier than thirty (30) days after the notice of intent is received or the beginning of the next federal tax quarter, whichever is later.
  4. This section shall apply to all contracts now in effect which have no expiration date and are continuing contracts and to all other contracts entered into or renewed from and after July 1, 1994. Specifically, this section shall apply to contracts arising from daily wholesale price offers which are accepted or rejected by the acceptance or rejection of products at the stated prices. Each daily price offering shall be construed to be a new offer and each purchase of product at a given price offer to create a new contract to which this section shall apply. Any contract in force and effect on July 1, 1994, which, by its own terms, will terminate on a subsequent date, shall be governed by the law as it existed before July 1, 1994.
  5. The option provided for in subsection (1) of this section shall not be construed to impair the obligations arising under any contract executed before July 1, 1994. The exercise of an option as set out in subsection (1) of this section shall not relieve the party of the obligation to make the reimbursement as provided for in the contract but shall affect only the timing of when that reimbursement shall be tendered.

HISTORY: Laws, 1994, ch. 395, § 1, eff from and after July 1, 1994.