Prevention of Frauds

Miss. Code Ann. tit. 15, ch. 3
in effect

Miss. Code Ann. § 15-3-1 Certain contracts to be in writing.

An action shall not be brought whereby to charge a defendant or other party: upon any special promise to answer for the debt or default or miscarriage of another person; upon any agreement made upon consideration of marriage, mutual promises to marry excepted; upon any contract for the sale of lands, tenements, or hereditaments, or the making of any lease thereof for a longer term than one year; upon any agreement which is not to be performed within the space of fifteen months from the making thereof; or upon any special promise by an executor or administrator to answer any debt or damage out of his own estate; unless, in each of said cases, the promise or agreement upon which such action may be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith or signed by some person by him or her thereunto lawfully authorized in writing.

Miss. Code Ann. § 15-3-3 Repealed.

Repealed by Laws of 2006, ch. 371, § 13, effective from and after July 1, 2006. [Codes, Hutchinson’s 1848, ch. 47, art. 1 (2); 1857, ch. 44, art. 2; 1871, § 2893; 1880, § 1293; 1892, §§ 4226, 4227; 1906, §§ 4776, 4777; Hemingway’s 1917, §§ 3120, 3121; 1930, §§ 3344, 3345; 1942, §§ 265, 266.]

Miss. Code Ann. § 15-3-5 Fraudulent conveyances, judgments, loans and the like; exceptions.

Section 15-3-3 shall not extend to any estate or interest in any lands, goods or chattels, or any rents, common, or profit out of the same, which shall be upon good consideration and bona fide lawfully conveyed or assured to any person or persons, bodies-politic or corporate, nor shall it in any case extend to creditors whose debts were contracted after such fraudulent act, unless made with intent to defraud them, and though a conveyance or contract be decreed void as to prior creditors, it shall not, on that account, be void as to subsequent creditors or purchasers.

Miss. Code Ann. § 15-3-7 Property of improperly disclosed principal or partner to be treated as property of one ostensibly transacting business.

If a person shall transact business as a trader or otherwise, with the addition of the words “agent,” “factor,” “and company,” or “& Co.,” or like words, and fail to disclose the name of his principal or partner by a sign in letters easy to be read, placed conspicuously at the house where such business is transacted, or if a person shall transact business in his own name without any such addition, all the property, stock, money and choses in action used or acquired in such business shall, as to the creditors of such person, be liable for his debts, and be in all respects treated in favor of his creditors as his property. However, the provisions of this section shall not apply to a refrigerated box, vending machine or other container when placed by a person, firm, or corporation in a store, mercantile establishment, or other place of business to be used therein, where said refrigerated box, vending machine, or other container is plainly marked with a sign, painted on or attached to and prominently displayed on such property, showing said property to be the property of the person, firm, or corporation, placing the same therein.

Miss. Code Ann. § 15-3-9 Creditors to be notified of destruction of insured stock of merchandise by fire.

In case of the destruction of a stock of merchandise by fire upon which there is insurance against such loss, the holder of such insurance policies shall within five days after such loss notify his creditors to whom he is indebted for merchandise, of his loss and the amount of insurance carried, and no such policy or policies of insurance shall be transferred or assigned for ten days after such notice, and no such insurance shall be paid for fifteen days next after the occurrence of any such fire.

Miss. Code Ann. § 15-3-11 Actions on contracts made during infancy.

An action shall not be maintained whereby to charge any person upon any promise made after full age to pay any debt contracted during infancy, or upon any ratification after full age of any promise or contract made during infancy, unless such promise or ratification shall be made by some writing, signed by the person to be charged therewith.

Miss. Code Ann. § 15-3-13 Chapter is not applicable to official sales.

Nothing in this article shall apply to official sales by sheriffs, constables, executors, administrators, guardians, receivers, commissioners, trustees in bankruptcy, or any public officer.

Miss. Code Ann. § 15-3-15 Effect of chapter on rules of evidence or presumptions of law.

Except as especially provided, nothing contained in this article, nor any act thereunder, shall change or affect the present rules of evidence or the present presumptions of law.

Miss. Code Ann. § 15-3-101 Definitions.

The following words and phrases shall have the meanings ascribed herein, unless the context clearly indicates otherwise: “Affiliate” means: A person who directly or indirectly owns, controls or holds with power to vote, twenty percent (20%) or more of the outstanding voting securities of the debtor, other than a person who holds the securities, 1. As a fiduciary or agent without sole discretionary power to vote the securities; or 2. Solely to secure a debt, if the person has not exercised the power to vote; A corporation twenty percent (20%) or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by the debtor or a person who directly or indirectly owns, controls or holds with power to vote, twenty percent (20%) or more of the outstanding voting securities of the debtor, other than a person who holds the securities, 1. As a fiduciary or agent without sole power to vote the securities; or 2. Solely to secure a debt, if the person has not in fact exercised the power to vote; A person whose business is operated by the debtor under a lease or other agreement, or a person substantially all of whose assets are controlled by the debtor; or A person who operates the debtor’s business under a lease or other agreement or controls substantially all of the debtor’s assets. “Asset” means property of a debtor, but the term does not include: Property to the extent it is encumbered by a valid lien; Property to the extent it is generally exempt under nonbankruptcy law; or An interest in property held in tenancy by the entireties to the extent it is not subject to process by a creditor holding a claim against only one tenant. “Claim” means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured. “Creditor” means a person who has a claim. “Debt” means liability on a claim. “Debtor” means a person who is liable on a claim. “Insider” includes: If the debtor is an individual, 1. A relative of the debtor or of a general partner of the debtor; 2. A partnership in which the debtor is a general partner; 3. A general partner in a partnership described in clause 2; or 4. A corporation of which the debtor is a director, officer or person in control; If the debtor is a corporation, 1. A director of the debtor; 2. An officer of the debtor; 3. A person in control of the debtor; 4. A partnership in which the debtor is a general partner; 5. A general partner in a partnership described in clause 4; or 6. A relative of a general partner, director, officer or person in control of the debtor; If the debtor is a partnership, 1. A general partner in the debtor; 2. A relative of a general partner in, or a general partner of, or a person in control of the debtor; 3. Another partnership in which the debtor is a general partner; 4. A general partner in a partnership described in clause 3; or 5. A person in control of the debtor; An affiliate, or an insider of an affiliate as if the affiliate were the debtor; and A managing agent of the debtor. “Lien” means a charge against or an interest in property to secure payment of a debt or performance of an obligation, and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common-law lien, or a statutory lien. “Person” means an individual, partnership, corporation, association, organization, government or governmental subdivision or agency, business trust, estate, trust or any other legal or commercial entity. “Property” means anything that may be the subject of ownership. “Relative” means an individual related by consanguinity within the third degree as determined by the common law, a spouse, or an individual related to a spouse within the third degree as so determined, and includes an individual in an adoptive relationship within the third degree. “Transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease and creation of a lien or other encumbrance. “Valid lien” means a lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.

Miss. Code Ann. § 15-3-103 Debtor insolvency; partnership insolvency; excluded assets; excluded debts.

A debtor is insolvent if the sum of the debtor’s debts is greater than all of the debtor’s assets, at a fair valuation. A debtor who generally is not paying his or her debts as they become due is presumed to be insolvent. A partnership is insolvent under subsection (1) if the sum of the partnership’s debts is greater than the aggregate, at a fair valuation, of all of the partnership’s assets, and the sum of the excess of the value of each general partner’s nonpartnership assets over the partner’s nonpartnership debts. Assets under this section do not include property that has been transferred, concealed or removed with intent to hinder, delay or defraud creditors or that has been transferred in a manner making the transfer voidable under this article. Debts under this section do not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset.

Miss. Code Ann. § 15-3-105 Value specified.

Value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied, but value does not include an unperformed promise made otherwise than in the ordinary course of the promisor’s business to furnish support to the debtor or another person. For the purposes of Section 15-3-107(2)(l), (m) and (n), a person gives a reasonably equivalent value if the person acquires an interest of the debtor in an asset pursuant to a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor upon default under a mortgage, deed of trust or security agreement. A transfer is made for present value if the exchange between the debtor and the transferee is intended by them to be contemporaneous and is in fact substantially contemporaneous.

Miss. Code Ann. § 15-3-107 Fraudulent transfers as to present and future creditors; determination of actual intent; rebuttable presumption of fraud.

A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation with actual intent to hinder, delay or defraud any creditor of the debtor. In determining actual intent under subsection (1), consideration may be given, among other factors, to whether: The transfer or obligation was to an insider; The debtor retained possession or control of the property transferred after the transfer; The transfer or obligation was disclosed or concealed; Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit; The transfer was of substantially all the debtor’s assets; The debtor absconded; The debtor removed or concealed assets; The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred; The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred; The transfer occurred shortly before or shortly after a substantial debt was incurred; The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor; The debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor: Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or Intended to incur, or believed or reasonably should have believed that he would incur, debts beyond his ability to pay as they became due; A transfer made or obligation incurred by a debtor may be fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation; and A transfer made by a debtor may be fraudulent as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt, the debtor was insolvent at that time, and the insider had reasonable cause to believe that the debtor was insolvent. If there exists a combination of facts such as described in subsection (2)(l), (m) or (n) only, then there will be a strong presumption of fraud which can be rebutted only by clear and convincing evidence.

Miss. Code Ann. § 15-3-109 Determination of when a transfer is made or obligation incurred.

For the purposes of this article: A transfer is made: With respect to an asset that is real property other than a fixture, but including the interest of a seller or purchaser under a contract for the sale of the asset, when the transfer is so far perfected that a good-faith purchaser of the asset from the debtor against whom applicable law permits the transfer to be perfected cannot acquire an interest in the asset that is superior to the interest of the transferee; and With respect to an asset that is not real property or that is a fixture, when the transfer is so far perfected that a creditor on a simple contract cannot acquire a judicial lien otherwise than under this article that is superior to the interest of the transferee; If applicable law permits the transfer to be perfected as provided in paragraph (a) and the transfer is not so perfected before the commencement of an action for relief under this article, the transfer is deemed made immediately before the commencement of the action; If applicable law does not permit the transfer to be perfected as provided in paragraph (a), the transfer is made when it becomes effective between the debtor and the transferee; A transfer is not made until the debtor has acquired rights in the asset transferred; An obligation is incurred: If oral, when it becomes effective between the parties; or If evidenced by a writing, when the writing executed by the obligor is delivered to or for the benefit of the obligee.

Miss. Code Ann. § 15-3-111 Creditor remedies.

In an action for relief against a transfer or obligation under this article, a creditor, subject to the limitations in Section 15-3-113, may obtain: Avoidance of the transfer or obligation to the extent necessary to satisfy the creditor’s claim; An attachment or other provisional remedy against the asset transferred or other property of the transferee; Subject to applicable principles of equity and in accordance with applicable rules of civil procedure, An injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property; Appointment of a receiver to take charge of the asset transferred or of other property of the transferee; or Any other relief the circumstances may require. If a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds.

Miss. Code Ann. § 15-3-113 Transferee defenses, liability and protection.

A transfer or obligation is not voidable under Section 15-3-107(1) against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee. Except as otherwise provided in this section, to the extent a transfer is voidable in an action by a creditor under Section 15-3-111(1)(a), the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (3), or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment may be entered against: The first transferee of the asset or the person for whose benefit the transfer was made; or Any subsequent transferee other than a good-faith transferee or obligee who took for value or from any subsequent transferee or obligee. If the judgment under subsection (2) is based upon the value of the asset transferred, the judgment must be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require. Notwithstanding voidability of a transfer or an obligation under this article, a good-faith transferee or obligee is entitled, to the extent of the value given the debtor for the transfer or obligation, to: A lien on or a right to retain any interest in the asset transferred; Enforcement of any obligation incurred; or A reduction in the amount of the liability on the judgment. A transfer is not voidable under Section 15-3-107(2)(l), (m) or (n) if the transfer results from: Termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law; or Enforcement of a security interest in compliance with Article 9 of the Uniform Commercial Code. A transfer is not voidable under Section 15-3-107(2)(n): To the extent the insider gave new value to or for the benefit of the debtor after the transfer was made unless the new value was secured by a valid lien; If made in the ordinary course of business or financial affairs of the debtor and the insider; or If made pursuant to a good-faith effort to rehabilitate the debtor and the transfer secured present value given for that purpose as well as an antecedent debt of the debtor.

Miss. Code Ann. § 15-3-115 Extinguishment of cause of action.

A cause of action with respect to a fraudulent transfer or obligation under this article is extinguished unless action is brought: Under Section 15-3-107(1), within three (3) years after the transfer was made or the obligation was incurred or, if later, within one (1) year after the transfer or obligation was or could reasonably have been discovered by the claimant; Under Section 15-3-107(2)(l) or (m), within three (3) years after the transfer was made or the obligation was incurred; or Under Section 15-3-107(2)(n), within one (1) year after the transfer was made or the obligation was incurred.

Miss. Code Ann. § 15-3-117 Supplementary general principles of law applicable.

Unless displaced by the provisions of this article, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency or other validating or invalidating cause, supplement its provisions.

Miss. Code Ann. § 15-3-119 Rules of construction.

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

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