Opinion ID: 1830545
Heading Depth: 2
Heading Rank: 5

Heading: whether cleveland has a right of set off against sixteenth section rents collected by cleveland for the benefit of mound bayou.

Text: ¶ 19. The chancellor held that Cleveland did not have a right of set off against the rents and ordered Cleveland to release the sixteenth section rents collected by Cleveland for the benefit of Mound Bayou. Cleveland cross-appeals on this issue. ¶ 20. Cleveland argues that, because the common law principle of set off is alive and well in Mississippi, the burden should be on Mound Bayou to demonstrate why it should not apply here, and that governmental entities should be able to use set off against other governmental entities in the way that common law allows private individuals to do so. Cleveland further argues that the use of set off is even more applicable in this situation, where Cleveland has a valid judgment against Mound Bayou. It also points to the difficulty of collecting judgments against governmental entities because art. 6, § 172A of the Mississippi Constitution prohibits courts from ordering a governmental entity to raise taxes to pay off a valid judgment. Set off, then would be the only efficient, inexpensive way for one governmental entity to recover valid debts from another. ¶ 21. Mound Bayou responds that sixteenth section lands and proceeds therefrom are public property to be held in trust for the benefit of a school district's educable children. Miss.Code Ann. § 29-3-1 (2000). Mound Bayou argues that one who holds school lands as a trustee is precluded from giving away, appropriating to his own use, or otherwise disposing of the corpus of a trust in derogation of the rights of the beneficiaries. Hill v. Thompson, 564 So.2d 1, 6 (Miss.1989); Tally v. Bd. of Supervisors, 323 So.2d 547, 550 (Miss.1975); Holmes v. Jones, 318 So.2d 865, 868-69 (Miss.1975). Finally, Miss. Code Ann. § 25-1-71 (1999) provides as follows: All money deposited in a bank or with any depository by or for a tax collector or other officer having the custody of public funds, state, county, municipal, levee board, road districts, drainage districts, or school districts, whether the same be deposited in the name of the officer as an individual or as an officer or in the name of any other person, is prima facie public money and a trust fund, and is not liable to be taken by the general creditors of the officer or by the creditors of the depository. ... (emphasis added). ¶ 22. There is no way for Cleveland to sidestep §§ 25-1-71 & 29-3-1. The statutes' meaning is clear: sixteenth section rents collected for the benefit of the Mound Bayou School District can only be used for the benefit of the Mound Bayou School District's educable children and cannot be used to satisfy a judgment, whether the judgment be held by a governmental entity such as the Cleveland School District, or a private individual or business.