Bronx Brass Foundry, Inc. v. Irving Trust Co., 297 U.S. 230 (1935)

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Docket Number: 232

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U.S. Supreme Court BRONX BRASS FOUNDRY v. IRVING TRUST CO., 297 U.S. 230 (1936)

[Page 297 U.S. 230, 232]

peals, which held that the creditor had received a preference although the proof did not show that at the times of the payments the assets of the debtor were insufficient to pay proportional amounts to all the other creditors, In re J. R. Palmenberg Sons, 76 F.(2d) 935. We granted certiorari, 296 U.S. 565, 56 S.Ct. 117, because the ruling on the right of the creditor to withdraw its claim appeared to conflict with Scholl Mfg. Co. v. Rodgers, 51 F.(2d) 971, decided by the Circuit Court of Appeals for the Eighth Circuit; and because the ruling on the question of preference conflicted with W. S. Peck & Co. v. Whitmer, 231 F. 893, also decided by that court.

First. The referee was justified in refusing to permit the creditor to withdraw its claim. The Circuit Court of Appeals recognized that ordinarily a plaintiff in equity has, as stated in Ex parte Skinner & Eddy Corporation, 265 U.S. 86, 93, 44 S.Ct. 446, the absolute right to dismiss his bill. Its approval of the referee's refusal to permit the creditor to withdraw rested on the ground that the District Court had adopted a rule which authorized the court to refuse, after issue joined, 'to permit the plaintiff to discontinue even though the defendant cannot have affirmative relief under the pleadings and though his only prejudice be the vexation and expense of a possible second suit upon the same cause of action'; that this modification of the right of voluntary discontinuance was within the judicial power, since it dealt with procedure; that the rule had been approved by the Circuit Court of Appeals; that it was applicable also to bankruptcy proceedings; and that it had been properly applied below. We agree with the reasoning and the conclusion reached.

Second. The ruling of the referee on the question of preference was correct for the reasons stated in Palmer Clay Products Co. v. Brown, , 56 S.Ct. 450, decided this day.

Affirmed.