Opinion ID: 1702165
Heading Depth: 1
Heading Rank: 3

Heading: Whether Merchants' Security Interest is Covered by the UCC

Text: ¶ 11. Mississippi's version of the UCC applies to security interests by contract including ... assignment. Miss.Code Ann. § 75-9-102(2) (1972). [1] Furthermore, in Mississippi Bank v. Nickles & Wells Construction Co., 421 So.2d 1056, 1060 (Miss.1982), we held that Mississippi's version of UCC Article 9 applies to assignments of construction contracts. [2] ¶ 12. Under the comment to the UCC, the test for when a transaction is covered by Article 9 is whether the transaction intended to have effect as security. Miss.Code Ann. § 75-9-102 cmt.1 (1972). Furthermore, [v]irtually any right to property or services is subject to creating a security interest to induce an extension of credit. Nickles, 421 So.2d at 1060. ¶ 13. Merchants contractually took a security interest by way of assignment in Schwegman Constructors' right to payment for construction work. This transaction is covered by the UCC, and Merchants' argument to the contrary has no merit.