In the case of Brown v. Felsen, the U.S. Supreme Court ruled that a bankruptcy court's discharge of debt does not prevent a creditor from proving in subsequent litigation that the same debt was obtained by fraud. The debtor, Brown, had previously sued his business partner Felsen for mismanagement and won; however, he later declared bankruptcy and listed his judgment against Felsen as an asset but did not list it as potentially fraudulent. After being discharged from bankruptcy, Brown sought to collect on this judgment only for Felsen to claim it was procured through fraud. The Supreme Court held that res judicata (a matter already judged) did not apply because issues related to fraud were never actually litigated in the initial lawsuit or during the bankruptcy proceedings - thus they could be raised in subsequent litigation without violating principles of finality or fairness.

In the case of Brown v. Felsen, there was no dissenting opinion recorded. The unanimous decision by the Supreme Court held that a bankruptcy court's determination of dischargeability does not preclude a creditor from asserting in subsequent litigation his claim was nondischargeable due to fraud under Bankruptcy Act § 17a (2). This ruling reversed and remanded an earlier judgment from the Eighth Circuit Court of Appeals.