Document: 462 U.S. 406 103 S.Ct. 2476 76 L.Ed.2d 678 PHILKO AVIATION, INC., Petitionerv.Maurice SHACKET et ux. No. 82-342. Argued April 20, 1983. Decided June 15, Syllabus A corporation in Illinois, operated by Roger Smith, sold a new airplane to respondents, who paid the sale price full and took possession of plane. however, did not give respondents original bills reflecting plane's chain title, but gave them only photocopies an assurance that he would "take care paperwork." Subsequently, Smith purported sell plane petitioner, giving it title documents, which petitioner's financing bank later recorded with Federal Aviation Administration (FAA). Respondents filed action District Court determine Petitioner argued had because never their interest FAA, relying on § 503(c) Act 1958, provides "no conveyance or instrument" affecting civil aircraft shall be valid against third parties having actual notice sale, until such instrument is FAA. But awarded summary judgment respondents' favor, Appeals affirmed, holding pre-empt Illinois state law under no documentation for transfer required oral once buyer takes aircraft. Held: State laws, as law, allowing undocumented unrecorded transfers interests affect innocent are pre-empted federal Act. Although if were interpreted literally accordance Act's definition "conveyance"—"a bill contract conditional mortgage, assignment other to, in, property"—it invalidate instruments transfers, thus enabling claimant establish party without instrument, apparent Congress intend this manner. Rather, means every must evidenced before rights can affected. Because these requirements, laws permitting pre-empted, there direct conflict between laws. These conclusions dictated legislative history. Any construction defeat Congress' purpose enacting creating "central clearing house" recordatio so person could have "ready access" information about aircraft's title. Pp. 409-414. 681 F.2d 506 (7th Cir.1982), reversed remanded. Leslie R. Bishop, Ann Arbor, Mich., petitioner. James C. Murray, Jr., Chicago, Ill., respondents. Justice WHITE delivered opinion Court. 1 This case presents question whether 1958 (Act), 49 U.S.C. §§ 1301 seq., prohibits all from validity unless has been written We conclude does effect. 2 On 19, 1978, at airport Respondents, Shackets, aircraft, they ever since. He instead his paperwork," Shackets understood include recordation Insofar present record reveals, attempted 3 Unfortunately all, keep word commenced fraudulent scheme. Shortly after same Philko Aviation. According Philko, said was Michigan electronic equipment installed. Nevertheless, its satisfied order, examined checked FAA records.1 At closing, but, course, given Philko's subsequently documents 4 After fraud became apparent, declaratory relied Act, 1403(c), any However, favor 497 F.Supp. 1262 (N.D.Ill.1980), reasoning preempt substantive regarding that, Uniform Commercial Code, Ill.Rev.Stat., ch. 26, 1-101 not. (CA7 1982). granted certiorari, --- ----, 487, 74 630 (1982), we now reverse remand further proceedings. 5 Section 503(a)(1) 1403(a)(1), directs Secretary Transportation maintain system recording "conveyance affects United States." 503(c), states: 6 "No provided [§ ] respect . than whom made given, heir devisee, hereof, office Transportation." 7 The statutory "conveyance" defines term "a property." 1301(20) (Supp. V, 1981). If definition, section require documented recorded; instruments, rather transfers. Under interpretation, might able prevail establishing instrument. In case, example, prove basis writing purporting evidence them, even still prevail, since "with goods payment accepted received accepted." 2-201(3)(c). 8 convinced, recorded, Furthermore, preempted, prevail.2 9 Senate, House, Conference committee reports, section-by-section analysis one bill's drafters, expressly declare statute "requires" "every aircraft."3 Senate report explains: "This requires Authority effective date section, States. evidencing each index established Authority."4 Thus, intended recordable transferees lienholders recorded. 10 primary congressional enactment create central house titles person, wherever may be, will know where find ready access claims against, liens, legal aircraft." Hearings House Comm. Interstate Foreign Commerce, 75 Cong., 3d Sess., p. 407 (April 1, 1938) (testimony F. Fagg, Director Air Dept. Commerce). Here, whatsoever effected. An fully result preempted then absolutely need incentive refuse do impunity, thereby prevent providing claim. what intended.5 11 absence conveyance, our reading far most natural one, first defined dictionary "the conveying," i.e., act property transferred." Webster's Third New International Dictionary 499 (P. Gove ed. 1976). Had plainly transfer. failure adopt dispositive, applicable context otherwise requires." 1301. Even caveat, read mechanically into render ineffective legislation. should applied Lawson v. Suwannee S.S. Co., 336 198, 201, 69 503, 504, 93 L.Ed. 611 (1949). Accordingly, hold 12 support below, rely Matter Gary Aircraft Corp., 365 (CA5 1982), rejected contention 503 dealing priority held assured priority, determined reference law.6 inclined agree rationale, help Shackets. determines priorities, federally obtain whatever entitled law. As commentator explained, "The situation appears operation [federal] security holder failed interest. Such invali ates persons. itself merely validates; grant priority." Scott, Liens Aircraft: Priorities, 25 J. L. & Commerce 193, 203 (1958). Accord, Sigman, Wild Blue Yonder: Interests Our System, 46 So.Cal.L.Rev. 316, 324-325 (1973) (although "failure serves subordinate"); Note, 26 Wash. Lee L.Rev. 205, 212-213 (1979).7 13 view foregoing, courts below erred granting parties. Of undisputed binding Hence, hilko if, acquire perfect purports assert reasons wholly unrelated Shackets,8 enforceable interest, retain think imposes standard impossible comply. There situations transferee used reasonable diligence file cannot faulted crucial record.9 manner disposed judgment, matters considered, issues remain open remand. reversed, remanded proceedings consistent opinion. 14 So ordered. 15 O'CONNOR, concurring part judgment. 16 I join except extent suggest Court's endorsement makes reasonably diligent effort protections ordinarily reserved interests. express question, us addressed brief argument or, indeed, statute. It perhaps noteworthy, search reveal seller, Smith's corporation, owned subject airplane. Const., art. VI, cl. 2; Pacific Gas Electric Co. Energy Resources Conservation Development Commn., 1713, 1722, 752 (1983); Fidelity Savings Loan Assn. de la Cuesta, 456 102 3014, 3022, 73 664 (1982); Jones Rath Packing 430 519, 525-526, 97 1305, 1309-1310, 51 604 (1977). S.Rep. 1661, 75th 1938); H.R.Rep. 2635, (June 7, 2254, 28, S. 3760, 5, (section-by-section C.M. Hester, Assistant General Counsel, Treasury Dept.). derived 503(b) Civil Aeronautics 1938, 52 Stat. 973. pertinent history found relating passage 1938 provision. S.Rep., supra, n. 3, (emphasis added). "Authority" mentioned quotation Authority, predecessor ideally allow records certain knowledge transferor's clear, recognize certainty, substantial lag time mailed actually owner grants lien Doe day attempts Roe following day, erroneously assume, based records, vendor clear plane, promptly recordation. involved contest two airplanes subsequent purchaser. planes prior purchaser so, purchaser, Texas governed priorities and, ordinary course business free 503(d) 1403(d), states "valid" recordation, court "validity" mean "priority." Instead, meant dealt effect 503(d), unlike concerns nonrecording 503(c). decision, Appeals, F.2d, 510, cited Haynes Credit 582 869 (CA4 1978); Sanders M.D. Sales, Inc., 575 1086 (CA3 Securities Enterprises, 355 225 (CA10 1968); Northern Corp. Bishop Distributing 284 121 (W.D.Mich.1968); Bitzer-Croft Motors, Inc. Pioneer Bank Trust 82 Ill.App.3d 37 Ill.Dec. 247, 401 N.E.2d 1340 (1980). All cases facts similar those distinguishable basis. Nothing 1406, different conclusion. provision 503] State, Columbia, territory States delivered, irrespective location place delivery instrument." passed 1964 rectify "chaotic exist[ing] industry conflicting rules choice governing tangible personal 1033, 88th 1st (Dec. 12, 1963). uniform choice-of-law rule determining State's govern repeal 503(c)'s requirement obtains pursuant 506. 506, observed regime, "to encumbrances [an] necessary consult file," disapproval regime expressed. 1060, 2d 1964) U.S.Code Cong. Admin.News 1964, pp. 2319, 2320. For comply formal requisites possession. mean, deemed ground due Philko. See, e.g., 228 (buyer refused it). indication prompt attempt record.

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