In the case of California Bank v. Kennedy in 1896, the U.S Supreme Court ruled on a dispute involving a loan agreement between John S. Rains and California Bank. The bank had lent money to Rains, who secured the loan with property that he did not fully own at that time but acquired later through inheritance from his wife's estate. When Rains failed to repay his debt, the bank sought to take possession of this property as repayment for their loan. The court held that under common law principles, an individual cannot pledge something they do not yet possess or have rights over (nemo dat quod non habet). Therefore, since Mr.Rains did not legally own all of the pledged property when he entered into contract with California Bank initially; it was deemed invalid by default. However, due to specific circumstances surrounding this case - including Mr.Rain’s subsequent acquisition of full ownership rights over said properties and failure to inform or renegotiate terms with California Bank - it was decided in favor of plaintiff i.e.,California Bank allowing them rightful claim over disputed assets as per original agreement.

The dissenting opinion in the case of California Bank v. Kennedy argued that the majority's decision to uphold a tax imposed by California on money held outside of the state was unconstitutional. The dissent contended that such a tax violated both due process and interstate commerce clauses, as it essentially taxed property not within its jurisdiction and interfered with commercial transactions between states. They believed this ruling set a dangerous precedent for states to impose taxes on assets or business activities occurring entirely beyond their borders, which could lead to double taxation and hinder economic activity across state lines. Furthermore, they emphasized that while states have broad powers to levy taxes for public purposes, these powers are not unlimited and must respect constitutional boundaries protecting individual rights against arbitrary government action.