In the case of Bardes v. Hawarden First National Bank in 1899, the U.S Supreme Court ruled on a dispute involving a bank and its customer over an unpaid loan. The plaintiff, Bardes, had borrowed money from Hawarden First National Bank but failed to repay it as agreed upon. As collateral for the loan, he had given securities which were then sold by the bank when he defaulted on his payments. However, Bardes claimed that these securities were worth more than what was owed to the bank and thus sued for recovery of surplus proceeds from their sale. The court held that under federal banking laws at that time (National Banking Act), national banks could sell pledged collateral if borrowers default without having to go through foreclosure proceedings or other legal processes first. Furthermore, they did not have any obligation to return excess proceeds from such sales back to borrowers unless there was an explicit agreement stating otherwise. Therefore, since no such agreement existed between Bardes and Hawarden First National Bank regarding surplus funds' return after selling off his pledged securities due to payment defaulting; henceforth ruling favored towards defendant - i.e., Hawarden First National Bank.

In the dissenting opinion for Bardes v. Hawarden First National Bank, it was argued that the majority's decision failed to properly consider and apply relevant legal principles. The dissenting justices believed that the bank should not be held liable for accepting a deposit from an insolvent debtor without knowledge of his insolvency or intent to defraud creditors. They contended that there was no evidence showing any fraudulent intention on part of either party involved in this transaction nor did they act with gross negligence which could make them accountable under law. Furthermore, they disagreed with the majority's interpretation of "preference" as used in bankruptcy laws, arguing instead that preference implies a deliberate action taken by debtor favoring one creditor over others rather than an incidental benefit resulting from normal business transactions like deposits made in good faith. Therefore, according to their viewpoint, since neither fraud nor preference were proven against Hawarden First National Bank; its liability towards other creditors of Bardes shouldn't have been established.