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Philko Aviation, Inc. v. Shacket

United States Supreme Court
462 U.S. 406 (1983)


Facts

Roger Smith sold an airplane to the Shackets (plaintiffs). The Shackets paid for the plane, and Smith gave them photocopies of the bills of sale and promised to “take care of the paperwork.” The transaction was not recorded with the Federal Aviation Administration (FAA). Instead, Smith fraudulently resold the same plane to Philko Aviation, Inc. (Philko) (defendant). Smith told Philko that the plane was in Michigan, and because the original bills of sale were in order and no FAA recording had been made, Philko and its bank closed the deal without delivery. Philko’s bank then recorded the transaction. When the Shackets discovered Smith’s fraud, they sued in federal court, seeking a declaratory judgment that title to the plane belonged to them. Philko claimed that it had priority of title due to the Shackets’ failure to file with the FAA, as required by § 503(c) of the Federal Aviation Act of 1958. 49 U.S.C. §§ 1301 et. seq. The district court found in favor of the Shackets. The appellate court affirmed on the ground that the Shackets had good title under Illinois’ Uniform Commercial Code (UCC), which was not preempted by § 503(c). Philko petitioned the United States Supreme Court for certiorari, which was granted.

Rule of Law

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Issue

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Holding and Reasoning (White, J.)

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Concurrence (O’Connor, J.)

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