United States Court of Appeals
                                                                            Fifth Circuit
                                                                          F I L E D
                 IN THE UNITED STATES COURT OF APPEALS
                                                                           April 13, 2005
                            FOR THE FIFTH CIRCUIT                     Charles R. Fulbruge III
                                                                              Clerk


                                   No. 04-10878



      INTERNATIONAL TRANSACTIONS LIMITED,
      A Cayman Islands Corporation,

                                                   Plaintiff-Appellant,

                                      versus

      EMBOTELLADORA AGRAL REGIOMONTANA,
      SA de CV; EMBOTELLADORA AGRAL DE LA
      LAGUNA, SA de CV; AGRAL ARRENDADORA,
      SA de CV; AGRAL COMISIONISTA Y
      DISTRIBUIDORA, SA de CV; AGRAL
      INMOBILIARIA, SA de CV; GRUPO
      EMBOTELLADOR NORESTE, SA de CV;
      PEPSI-GEMEX, SA de CV,

                                                   Defendants-Appellees.


                   Appeal from the United States District Court for
                            the Northern District of Texas
                                (USDC No. 04-10878)
          _________________________________________________________


Before REAVLEY, JOLLY and PRADO, Circuit Judges.

REAVLEY, Circuit Judge:*


      *
       Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion
should not be published and is not precedent except under the limited circumstances
      The judgment of the district court, dismissing on the ground that ITL lacked

standing, is vacated for the following reasons:

      1. Article III standing requires: (1) an injury in fact suffered by the plaintiff;

(2) causally related to the defendant’s conduct; and (3) substantially likely to be

redressed by a judgment in the plaintiff’s favor. Lujan v. Defenders of Wildlife, 

, 560-61 (1992). The district court found the second and third elements of

Article III standing lacking after it concluded that Sharp had validly assigned the

Award and Note to Cañamar in August 1998, leaving nothing for the Special Master

to assign to ITL in 1999 and nothing for ITL to enforce against the Agral defendants

in this suit. In reaching that conclusion, the district court determined that Sharp was

the sole owner of the Award and had full power to assign it. ITL contests the

findings that Sharp was the sole owner of the Award and that the assignment of the

Award to Cañamar was valid.

      2. The parties dispute whether the law of Mexico or Texas applies to this

case. ITL urges Texas law, while defendants contend that Mexican law applies.

The district court did not address the choice of law issue, but instead applied Texas

law “to give ITL the benefit of the doubt.” For the reasons stated below, we

conclude that Texas law does not support the district court’s reasoning and vacate


set forth in 5TH CIR. R. 47.5.4.
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and remand for that reason. Because the choice of law issue is complex and the

parties have inadequately addressed the issue before this court, we leave it to the

district court to determine the correct choice of law, if necessary.

      3. Whether ITL has standing depends on whether it currently owns the

Award as a result of the assignment from the Special Master or whether GEN

currently owns it as a result from the earlier assignments from Sharp to Cañamar

and then from Cañamar to GEN. Ownership of the Award, in turn, depends on

whether Sharp owned all interest in the Award or whether ITL had beneficial

ownership. If ITL had beneficial ownership, current ownership depends on whether

Cañamar and GEN were bona fide purchasers and thus have an ownership interest

in the Award superior to ITL’s equitable interest, or whether ITL gave Sharp

authority to assign the Award. If Sharp owned all interest in the Award or

otherwise had authority to assign it, current ownership depends on whether its

assignment to Cañamar failed for lack of consideration or because Sharp’s

president, Gutierrez, did not have authority from Sharp to make the assigment.

      In the first step of this analysis, the district court found that Sharp was the

sole owner of the Award, because the arbitrator issued the Award in only Sharp’s

name. Solely on this basis, the district court reasoned that the arbitrator conferred

no interest to ITL and that Sharp was the Award’s principal owner as to third parties

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and could freely assign it. ITL argues that the undisputed evidence in the district

court established that Sharp was merely the Note’s holder, not its owner, and that it

prosecuted the arbitration as the Note’s holder. Consequently, ITL argues, it

received the Award only as holder of ITL’s beneficial interest.

      We agree with ITL that, under Texas law, it had a beneficial interest in the

Award. In Texas, “[a] resulting trust is implied in law when someone other than the

person in whose name title is taken pays the purchase price,” Nolana Dev. Ass’n v.

Corsi, 

, 250 (Tex. 1984), or when “property was purchased by one

occupying a representative or fiduciary capacity, so that the purchase necessarily

inured to the benefit of his principal,” Elbert v. Waples-Platter Co., 

, 150 (Tex. Ct. App. 1941). Courts employ the doctrine to prevent unjust

enrichment. 

. Any type of property, including a

promissory note, may be subject to a resulting trust. Crume v. Smith, 

, 215 (Tex. Ct. App. 1981). The party who furnished the purchase price is

deemed the equitable owner of the property. Cohrs v. Scott, 

, 130

(Tex. 1960).

      The parties do not dispute that Sharp acted as ITL’s agent in purchasing the

Note and did so with ITL’s funds. Thus, according to the above principles, ITL

became the equitable owner of the Note. To sustain the district court’s finding that

                                          4
Sharp became sole owner of the Award, we would have to hold that, because Sharp

maintained the arbitration and received the Award in its own name, ITL’s beneficial

ownership was extinguished. We are aware of no authority supporting such a

holding. Texas law allows the holder of a negotiable instrument to seek

enforcement of the instrument even though she is not the beneficial owner. TEX.

BUS. & COMM. CODE ANN. § 3.301 (Vernon 2002); Carter v. DeJarnatt, 

, 90-91 (Tex. Ct. App. 1975). Where the holder of a promissory note

avails herself of that rule, she does not thereby divest the beneficial owner of his

interest. See 

(directing that judgment in an action to enforce a promissory

note be entered in favor of the note’s holder as trustee where the holder had pleaded

that she was not the note’s beneficial owner). Here, the Note, in which ITL had

beneficial ownership, required enforcement through arbitration. Sharp clearly

maintained the arbitration as holder of the Note for the benefit of the “unknown

investor” (ITL), relying on Business and Commercial Code § 3.301. Thus, the

Award in Sharp’s favor also inured to ITL’s benefit.1

       4. Because Sharp possessed only legal title to the Award under Texas law,


       1
         The arbitrator’s failure to note Sharp’s representative capacity in the Award itself
did not extinguish ITL’s beneficial interest. The arbitrator merely enforced the Note and
made no determination regarding the rights of the beneficial owner in the Award. The
Award was entered in favor of Sharp because Sharp had maintained the arbitration, not
because the arbitrator had concluded that Sharp was the Award’s sole owner.

                                             5
the assignment from Sharp to Cañamar did not pass ITL’s equitable interest unless

Sharp possessed actual or apparent authority from ITL to assign the Award. Kirby

Forest Indus., Inc. v. Dobbs, 

, 354 (Tex. Ct. App. 1987) (“An

assignee takes only such title to the thing assigned as existed in the assignor at the

time of assignment.”). Contrary to defendants’ assertions in their briefs and at oral

argument, the district court did not determine that Sharp possessed apparent

authority to assign the Award on behalf of ITL.2 Instead, the court concluded that

Sharp could assign based on its erroneous determination that Sharp was the

Award’s sole owner.

      5. In sum, we decide this appeal under Texas law. However, on remand we

ultimately leave it to the district court to determine whether Texas law or Mexican

law is to be applied in this case. Under Texas law, we only decide that ITL retained

a beneficial interest in the Award at the time it was issued; all other issues arising

from facts or alleged facts occurring after that point in time, including whether Sharp

had actual or apparent authority to assign the Award to Cañamar, whether Gutierrez

has authority from Sharp to make the assignment to Cañamar, and whether Cañamar

and GEN were bona fide purchasers for value without notice we leave to the district


      2
        The district court discussed apparent authority only in determining that
Gutierrez, Sharp’s president, had authority to assign the Award on behalf of Sharp.

                                            6
court to decide on remand, if necessary. If the district court determines that

Mexican law is applicable, we can offer no guidance, since the district court has not

yet considered the case in this light. Consequently, we vacate the order of dismissal

and remand to the district court for disposition consistent with this opinion.

VACATED and REMANDED.




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