Question: Definition of a Security. The W. J. Howey Co. owned large tracts of citrus acreage in Lake County, Florida. For several years, it planted about five hundred acres annually, keeping half of the groves itself and offering the other half to the public to help finance additional development. Howey-inthe-Hills Service, Inc., was a service company engaged in cultivating and developing these groves, including harvesting and marketing the crops. Each prospective customer was offered both a land sales contract and a service contract, after being told that it was not feasible to invest in a grove unless service arrangements were made. Of the acreage sold by Howey, 85 percent was sold with a service contract with Howey-in-the-Hills Service. Howey did not register with the Securities and Exchange Commission (SEC) or meet the other administrative requirements that issuers of securities must fulfill. The SEC sued to enjoin Howey from continuing to offer the land sales and service contracts. Howey responded that no SEC violation existed because no securities had been issued. Evaluate the definition of a security given in this chapter, and then determine whether Howey or the SEC should prevail in court.