In the case of Arnold, Doing Business As R. H. Arnold Company, et al. v United States for the Use of W.B Guimarin & Company (1923), a dispute arose over payment for construction work done on a post office building in South Carolina by subcontractor W.B Guimarin & Co., under contract with general contractor R.H Arnold Co.. The issue was whether or not the government could be held liable to pay Guimarin directly when Arnold failed to do so despite having been paid by the government already. The Supreme Court ruled that under federal law at that time, specifically Section 270 of Judicial Code which requires contractors working on public buildings to provide bonds guaranteeing payment for labor and materials used, it is possible for unpaid suppliers or workers to sue both contractor and surety company involved in such projects if they are not paid as agreed upon in their contracts.

In the dissenting opinion of Arnold v. United States for the Use of W.B. Guimarin & Company, Justice McReynolds disagreed with the majority's interpretation of a federal statute regarding surety bonds on public works contracts. He argued that this law was intended to protect laborers and material suppliers from non-payment by contractors, not to provide an additional avenue for general creditors to collect debts unrelated to specific projects. The justice believed that allowing such claims would dilute protections for those directly involved in public works projects and potentially discourage participation in these important endeavors due to increased financial risk. Furthermore, he contended that it was inappropriate for courts to expand statutory provisions beyond their clear intent as expressed by Congress.