Philko Aviation, Inc. v. Shacket

PETITIONER: Philko Aviation, Inc.

DOCKET NO.: 82-342
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 462 US 406 (1983)
ARGUED: Apr 20, 1983
DECIDED: Jun 15, 1983

James C. Murray, Jr. - on behalf of the Respondents
Leslie R. Bishop - on behalf of the Petitioner

Facts of the case


Media for Philko Aviation, Inc. v. Shacket

Audio Transcription for Oral Argument - April 20, 1983 in Philko Aviation, Inc. v. Shacket

Warren E. Burger:

We will hear arguments first this morning in Philko Aviation, Incorporated, against Shacket.

Mr. Bishop, you may proceed whenever you're ready.

Leslie R. Bishop:

Mr. Chief Justice and may it please the Court:

This appeal involves a suit to determine the ownership of a 1978 new Piper Navajo airplane sold to both parties in the suit by a fraudulent dealer.

Plaintiff Shacket brought suit in the U.S. district court for a declaratory judgment seeking a determination of the ownership of the Piper Navajo airplane in him.

The Defendant Philko Aviation counterclaimed against Shacket.

As to the ownership of the aircraft, the district court awarded ownership to the Plaintiff Shacket.

There were other counts of fraud, conspiracy, wrongful conversion, and requests for damages, and all of those counts were held by the lower court against the party making the claim.

The Defendant Smith and Smith Aircraft Sales, Inc., the dealer involved in this dispute, did not answer or plead and judgment, default judgment, was taken against that Defendant, together with $29,000 attorney's fees in favor of Plaintiff Shacket.

Philko appealed to the Seventh Circuit Court of Appeals and the Seventh Circuit Court of Appeals affirmed the judgment of the U.S. district court.

Philko subsequently petitioned to this honorable Court by writ of certiorari and that certiorari was granted, but limited to the first issue presented by the Petitioner Philko as to the question presented: Does state law permit a conveyance of title to aircraft by transfer of possession alone, without the necessity of FAA recording.

Both the Plaintiff Shacket and Philko through Mr. Edward J. McArdle, its president, had had prior dealings, not directly related to this lawsuit, with Roger Smith or Smith Aviation, Inc., the dealer involved.

Mr. Shacket's first contact with Smith was in 1972, wherein he traded one aircraft for another, and that was in Smith's context as a dealer of used aircraft.

Mr. McArdle or Philko or corporations related to McArdle Limited, which was Mr. McArdle's holding company for several business corporations engaged in the leisure time business, became acquainted on a chance meeting with Roger Smith at DuPage County Airport, became apprised of the availability for purchase of a fixed base operation at Aurora Municipal Airport in Aurora, Illinois, and subsequently formed a new Delaware corporation called Philko to buy the assets of Philko Aviation in Aurora.

He then leased that facility to Roger Smith Aircraft Sales, Inc., and Roger Smith Aircraft Sales, Inc., sold fuel, oil and service under the trade name Philko, whereas he maintained his sale of used aircraft under the name Roger Smith Aircraft Sales, Inc.--

Sometime on or about November of '77 Roger Smith persuaded or sold a new 1978 Piper Navajo airplane to Shacket by means of a purchase order.

The plane had not at that time been manufactured.

The purchase order was signed and $20,000 was deposited by Shacket at that time.

The delivery was to be in early 1978.

In April 19th of 1978, Shacket, after being advised the plane was then ready for delivery, appeared at Aurora Airport from his home in Detroit preparatory to closing and taking possession of the aircraft.

At that time Mr. Shacket paid an additional $106,000 in cash and he had at a prior time given up possession to a 1972 Piper Navajo airplane which was to be used as the trade-in.

So that the total consideration paid by Shacket was the $20,000 at the time of execution of the agreement, $106,000 at the time he took possession and the delivery into Roger Smith Aircraft, Inc. 's hands of a '72 Piper Navajo some time in March of '78.

Mr. Shacket took possession of the aircraft--

William H. Rehnquist:

Mr. Bishop.

Leslie R. Bishop:


William H. Rehnquist:

Do you think all of these facts are really essential to resolve the legal issue presented in the petition for certiorari?

Leslie R. Bishop:

Yes, sir.

Mr. Shacket took possession of the airplane after being shown copies of the title documents conveying title from Piper in a complete chain up to and including Smith Aviation, Inc. Smith Aviation, Inc., through Roger Smith, provided him with a buyer's copy of the bill of sale conveying from Smith Aviation to Maurice Shacket.

Maurice Shacket had asked for the original documents.

He was told that they weren't ready.