Quimbee logo
DMCA.com Protection Status
From our private database of 18,800+ case briefs...

In re Howell Enterprises, Inc.

United States Court of Appeals for the Eighth Circuit
934 F.2d 969 (1991)


Howell Enterprises, Inc. (Howell) (plaintiff), a rice mill, took out a loan from the First National Bank of Stuttgart, Arkansas (the Bank) and gave the Bank a security interest in its accounts receivable. Bar Schwartz Limited (Bar Schwartz) wanted to buy rice from Howell using a commercial letter of credit, which Howell refused to accept. Bar Schwartz would not buy from Tradax America, Inc. (Tradax), so Howell and Tradax agreed that Tradax would use Howell’s name to sell the rice. In its books, Howell included the contract with Bar Schwartz in its accounts receivable. Bar Schwartz gave Howell the letter of credit, which was to be paid to Tradax on maturity. Before then, Howell entered Chapter 11 bankruptcy. The Bank asserted its perfected security interest in Howell’s accounts receivable. Tradax sued, arguing that the Bar Schwartz transaction was not an account receivable or that the letter was held in constructive trust. The bankruptcy court concluded that Tradax had an equitable interest and that the letter of credit was held in constructive trust for its benefit, but that the Bank had a perfected security interest in the letter and was a bona fide purchase for value. Thus, the court awarded the letter to the Bank, and Tradax appealed to the United States Court of Appeals for the Eighth Circuit.

Rule of Law


Holding and Reasoning (Rosenbaum, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 498,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.

Here's why 498,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 18,800 briefs, keyed to 985 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Questions & Answers

Have a question about this case?

Sign up for a free 7-day trial and ask it

Sign up for a FREE 7-day trial