to believe the debtor to be insolvent and then when the creditor learns of the insolvency of his debtor and threatened bankruptcy proceedings he could issue execution and collect his claim without fear of an action to recover the amount of the preference so obtained. It is not possible to believe that this result was intended by the Bankruptcy Act. Galbraith v. Whitaker, 119 Minn. 447, 138 N.W. 772, 43 L.R.A. (N.S.) 427."
In the instant case, instead of a judgment, a bill of sale was given more than four months prior to the seizure. A pledge of a chattel without transfer of possession is void as to bona fide purchasers, pledgees and execution creditors acquiring rights in the chattels without notice of the pledge. Taplinger v. Northwestern Bank, 3 Cir., 101 F.2d 274, 39 Am.B.R., N.S., 127.
Title to the machinery and equipment in the instant matter did not vest in the Frankford Trust Company until July 15, 1938, the date it acquired possession. During the interval between the date of the bill of sale and the seizure of the machinery the bill of sale was a fraud on the rights of other creditors who dealt with the alleged bankrupt, and the long interval in no way minimized, if it did not aggravate, the danger to their rights.
When the Frankford Trust Company seized all the assets of the debtor to be applied in reduction of the debtor's past due indebtedness, it left nothing for other creditors. Prior to the seizure the debtor was in possession of its assets, and its nonaction in permitting one creditor to seize all its assets indicated as complete an assent to the sale and as full an intent to prefer this one creditor as if the bill of sale had been signed the same day the creditor took possession of the machinery.
The alleged bankrupt was not under any legal disability when it permitted this one creditor to take possession of its assets, to be applied to the reduction of its past indebtedness to this creditor, in preference to other creditors.
Intent may be proved by presumption of law or by acts or statements of the parties involved. Intent is a mental attitude made known by acts. It is synonymous with aim or purpose and is disclosed to the world by the over act of the person possessing the intent. One is presumed to intend the natural and probable consequences of his acts. In re Weisberger, D.C., 41 F.2d 275; Johnson v. Wald, 5 Cir., 93 F. 640. The intent to prefer may be inferred from the fact that a preference was the natural result of what was done. In re Yarns Corporation, D.C., 57 F.2d 309.
This Court, In re Weintraub, D.C., 30 F.2d 548, 550, in an opinion by Judge Kirkpatrick, said: "The intent to prefer, which is the object of this inquiry, is a statutory or presumed intent, and it can be found, though the actual intent may be otherwise." The opinion, 30 F.2d at page 549, quoting Collier on Bankruptcy, said: "'if a debtor, while insolvent, transfers all or nearly all his property to some of his creditors, leaving others unprovided for, the intent to prefer will be presumed.'" This case was affirmed by the Circuit Court of Appeals, 3 Cir., 30 F.2d 550.
The Referee, in the instant case, said in his report: "There is sufficient relevant evidence in this record to warrant a finding that the transfer was made with an intent to prefer the Frankford Trust Company over the other creditors of the alleged bankrupt company." Nothing has been presented that should cause me to alter this view. I think it may be inferred fairly that the alleged bankrupt transferred its assets with the intent to prefer one creditor over its other creditors. Any other inference would do violence to justice and reason.
The Referee the following conclusions of law: "1. That the Richenell Fabric Mfg. Co. Inc. did commit an act of bankruptcy coming within the provision of Sec. 3, sub. a(2) of the Bankruptcy Act by voluntarily transferring while insolvent and within four months of the time the petition in bankruptcy was filed, substantially all of its assets to the Frankford Trust Company, a creditor with intent to prefer said creditor over its other creditors. 2. That an adjudication should be decreed." I adopt these conclusions of law as the decision of this Court.
The petitioning creditors are entitled to an adjudication. The order of the Referee ordering that an adjudication in bankruptcy be decreed is hereby confirmed.