In the 1915 case of Frank Crocker, Trustee in Bankruptcy of Postal Service and Lock Company v. United States, the U.S Supreme Court dealt with a dispute over a contract between the bankrupt company and the government. The Postal Service and Lock Company had entered into an agreement to provide mailboxes for rural delivery but failed to fulfill its obligations due to bankruptcy. The trustee sought to recover payments made under this contract arguing that it was void because it violated federal law which prohibited any officer or employee of any executive department from making contracts unless authorized by Congress. However, the court ruled against him stating that while such laws are designed to protect public funds from misappropriation by unauthorized officials, they do not necessarily render all contracts made in violation thereof absolutely void so as not be enforceable at all events by one who has fully performed his part thereunder.

In the dissenting opinion for Frank Crocker, Trustee in Bankruptcy of Postal Service and Lock Company v. United States (1915), it was argued that the government should not be allowed to claim priority over other creditors in bankruptcy proceedings. The dissenting justices believed that this interpretation contradicted both common law principles and legislative intent behind bankruptcy laws. They pointed out that allowing such a privilege would undermine the equitable distribution principle inherent in bankruptcy proceedings, which aims to treat all unsecured creditors equally by distributing assets proportionally according to their claims' size. Furthermore, they contended that if Congress intended for the government's debts to receive preferential treatment during bankruptcies, explicit language stating so would have been included within legislation.