Holcomb Dunbar - North Mississippi Attorneys

New “Unathorized Signature” opinion from Mississippi Court of Appeals


When dealing with unauthorized signatures it is important to immediately notify bank of potential improper checks.

The Mississippi Court of Appeals ruled on an issue of first impression in Mississippi on a case out of Lafayette County earlier this summer with respect to the ability to limit the statute of repose by agreement. The Court of Appeals held that the one-year statute of repose found in section 75-4-406(f) “may be varied” by the deposit agreement between Century and BancorpSouth, and thus, Century had 60 days from September 2005 to report the specific unauthorized signatures. Century failed to report the specific items until 11 months later as was therefore barred from recovering the misappropriated funds from BancorpSouth.

Accordingly, when a client is faced with potentially forged or unauthorized checks being drawn on its account, one must not rely on the statutory limitations period, but instead, notify the bank immediately of the potentially misappropriated funds.

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The opinion from the Mississippi Court of Appeals may be found here.