In the case of Brown and Schermerhorn, Trustee under Will of Cunningham v. Fletcher, Trustee of Braker (1914), the U.S Supreme Court dealt with a dispute over property rights. The appellants claimed that they had acquired title to certain lands in California through inheritance from their ancestor who died intestate in 1851. However, these claims were challenged by the appellee on grounds that there was no valid conveyance or transfer of title as required by law at that time for Mexican land grants in California. The court ruled against the appellants stating that since they failed to comply with legal requirements necessary for obtaining a perfect title during their ancestor's lifetime - such as presenting claim before Board of Land Commissioners and securing confirmation from United States courts - they could not have inherited any right or interest in said lands upon his death.

In the dissenting opinion for Brown and Schermerhorn, Trustee under Will of Cunningham v. Fletcher, Trustee of Braker (1914), it was argued that the majority's decision failed to properly consider the nature and purpose of trusts in relation to bankruptcy law. The dissenting justices believed that a trust should not be treated as an asset in bankruptcy proceedings unless there is clear evidence that it was created with fraudulent intent or used to hide assets from creditors. They contended that treating all trusts as potential assets would undermine their legitimate use as estate planning tools and could discourage people from creating them out of fear they might later be seized in bankruptcy. Furthermore, they disagreed with the majority's interpretation of "transfer" within Section 60a(1) Bankruptcy Act arguing this does not include transfers made into a trust where no fraud exists.