In the 1921 case Curtis, Receiver of Atlantic National Bank of Providence, R. I. v. Connly et al., the United States Supreme Court dealt with a dispute over whether certain checks were properly payable by a bank that had gone into receivership before they could be cashed. The defendants in this case argued that as holders in due course of these checks, they should have been paid out from the assets of the failed bank ahead of other creditors because their claims arose from transactions completed before it went into receivership. However, Justice McReynolds delivered an opinion for a unanimous court rejecting this argument and holding that under federal banking law at the time, such claimants did not enjoy priority status over general creditors when banks fail and go into receivership.

In the dissenting opinion for Curtis, Receiver of Atlantic National Bank of Providence, R. I. v. Connly et al., Justice Holmes argued that the majority's decision was inconsistent with previous rulings and failed to consider important factors in this case. He disagreed with their interpretation of Rhode Island law regarding bank receiverships and believed they had wrongly applied it to a national banking association like Atlantic National Bank. Furthermore, he contended that the court should have considered whether or not there were sufficient assets left after paying off depositors before deciding on claims from other creditors such as bondholders or stockholders which is what happened here when Mr.Connly sued for his bonds payment after being denied by Mr.Curtis who was appointed receiver due to insolvency issues at ANB.