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Commercial Law Keyed to Whaley
Philko Aviation, Inc. v. Shacket
Citation:
462 U.S. 406 (1983)Facts
In April 1978, the Shackets purchased a new airplane from Roger Smith Aircraft Sales, Inc. They paid the full purchase price and took possession of the aircraft, but Smith retained the title documents, promising to handle the paperwork including FAA registration. Smith never forwarded the documents to the FAA. Instead, Smith used these documents to fraudulently sell the same aircraft to Philko Aviation. Philko’s president, McArdle, conducted a title search that revealed no prior recorded interests and promptly recorded Philko’s interest with the FAA. When the fraud was discovered, both the Shackets and Philko claimed ownership of the aircraft, leading to this litigation over who had superior title.
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