England

This is an action to recover an alleged preferential payment of $3,175, pursuant to Section 60, sub. a, and 60, sub. b, of the Bankruptcy Act, 11 U.S.C.A. § 96 , subs, a, b.

The facts as stipulated to by the parties are as follows:

Defendant loaned the Madsen Engineering Company, Inc., (herein referred to as Madsen) the sum of $3,500 on May 20, 1953. One day later, on May 21, 1953, Madsen issued a promissory note evidencing the indebtedness and secured by a chattel mortgage of the same date wherein Madsen mortgaged to the defendant as security six motor vehicles which were the property of Mad-sen.

Subsequent to the execution of the note and mortgage, Madsen delivered to defendant the certificates of ownership of said motor vehicles which showed that Madsen was the owner of all of the said vehicles and that they were free and clear of all claimed liens and encumbrances. Madsen endorsed the certificates of ownership so that the name of the defendant could be inserted therein by the Department of Motor Vehicles of the State of California as the legal owner thereof. Subsequent to May 21, 1953, between the dates of July 17, 1953 and July 28, 1953, defendant deposited with the…