Philko Aviation, Inc. v. Shacket

The Shackets (plaintiffs) bought a plane from Roger Smith, paid in full, and received bills of sale, but never recorded the transaction with the FAA; Smith fraudulently sold the same plane again to Philko Aviation (defendant), which closed the deal without knowing about the Shackets' purchase and had its bank record the transfer. When the fraud came to light, the Shackets sued for a declaration that they held title, and Philko argued its recorded interest had priority over the Shackets' unrecorded one under the Federal Aviation Act; the district court and appellate court sided with the Shackets, relying on Illinois's UCC rule that payment and delivery alone can validate a sale, and Philko sought Supreme Court review.