The Dakin v. Bayly case in 1933 revolved around the liquidation of an insolvent American branch of a British insurance company, and whether or not the assets should be distributed to creditors in America first before being sent overseas. The Supreme Court ruled that under U.S law, local creditors have priority over foreign ones when it comes to distributing assets from an insolvent domestic branch of a foreign corporation. This decision was based on principles of equity and comity among nations, which dictate that while respecting international obligations, courts must also protect domestic interests. Therefore, after paying off debts owed by the American branch to its American creditors (including policyholders), any remaining funds could then be transferred back to Britain for distribution among other claimants.

In the dissenting opinion for Dakin, Receiver, v. Bayly, Liquidator (1933), Justice Stone argued that the majority had misinterpreted both New York law and federal bankruptcy law in its decision to allow a receiver of an insolvent national bank to recover funds transferred by the bank before it was declared insolvent. He contended that under New York law, such transfers were voidable only if they were made with intent to defraud creditors or if they rendered the bank insolvent - neither of which conditions he believed had been met in this case. Furthermore, he asserted that federal bankruptcy laws did not apply because national banks are exempt from them. Therefore, according to Justice Stone's interpretation of these laws and their applicability in this case, there should have been no legal basis for allowing recovery of these funds.