In the 1899 case of Daggs v. Phoenix National Bank, the U.S Supreme Court was tasked with determining whether a bank could be held liable for damages after refusing to honor checks due to insufficient funds in an account. The plaintiff, Daggs, had written several checks on his account at Phoenix National Bank which were subsequently dishonored by the bank because there were not enough funds in his account to cover them. As a result of this action by the bank, Daggs suffered damage to his credit and reputation and sought compensation from the bank for these damages. However, upon review of Arizona law (where both parties resided), it was determined that banks are under no obligation or duty towards third parties who might suffer as a result of their refusal to pay out on checks drawn against insufficient funds. Therefore, since there was no legal basis for holding Phoenix National Bank responsible for any harm caused by its actions according to state law at that time; thus ruling favored Phoenix National Bank.

In the dissenting opinion for DAGGS v. PHOENIX NATIONAL BANK, it was argued that the majority's decision failed to properly interpret and apply Arizona law regarding property rights in a marriage. The dissent contended that under Arizona law, both spouses have an equal interest in community property acquired during their marriage. Therefore, when Mr. Daggs used community funds to purchase mining shares without his wife's consent or knowledge, he violated her rights to this shared property. Furthermore, they disagreed with the majority’s view on fraudulent conveyance laws; arguing instead that Mrs.Daggs should be considered a creditor of her husband because she had a claim against him for half of their community assets at all times during their marriage - even before any legal separation proceedings began or judgments were rendered against him by other creditors.