In the 1939 case Deitrick, Receiver v. Greaney, the United States Supreme Court ruled on a matter involving bankruptcy and tax law. The respondent, Greaney, had been declared bankrupt and his assets were being managed by a receiver (Deitrick). Among these assets was an income tax refund from the federal government for overpaid taxes in previous years. The issue at hand was whether this refund should be considered part of the bankruptcy estate to pay off creditors or if it belonged solely to Greaney as he claimed under Massachusetts state law which exempted such refunds from creditor claims in bankruptcy proceedings. In its decision, the Supreme Court sided with Deitrick stating that federal law preempted state laws when it came to matters of taxation and thus held precedence over Massachusetts' exemption statute. Therefore, they concluded that any income tax refunds due to a bankrupt individual are indeed part of their estate available for distribution among creditors.

In the dissenting opinion for Deitrick v. Greaney, Justice Black argued that the majority's decision was inconsistent with previous rulings and violated principles of equity. He contended that allowing a receiver to recover payments made by an insolvent debtor prior to bankruptcy proceedings would unfairly penalize creditors who had no knowledge of the debtor's insolvency. Furthermore, he suggested that such a ruling could discourage future lending as it introduces uncertainty into business transactions. Justice Black also criticized the majority for failing to provide clear guidelines on how courts should determine whether a payment constitutes an unlawful preference under bankruptcy law, leading to potential inconsistencies in application.