In the case of Dowling v. Exchange Bank of Boston in 1891, the U.S Supreme Court ruled on a dispute involving bankruptcy and property rights. The plaintiff, Dowling, had previously transferred his property to his wife before declaring bankruptcy. The defendant bank argued that this transfer was fraudulent as it was done with an intent to defraud creditors and should be voided under Massachusetts law which states that any conveyance made with intent to hinder or delay creditors is considered fraudulent. The court held that while state laws could determine what constituted fraud for purposes of their own legislation, they did not have jurisdiction over federal bankruptcy proceedings. Therefore, even if the transfer were deemed fraudulent under Massachusetts law, it would still stand in a federal context unless proven otherwise by federal standards. This decision underscored the supremacy of federal law over state laws when dealing with matters within its purview such as bankruptcies; reinforcing principles set out by earlier cases like McCulloch v Maryland (1819) where Chief Justice John Marshall famously declared "the power to tax involves the power to destroy" thereby limiting states' ability interfere with operations of Federal institutions.

In the dissenting opinion for Dowling v. Exchange Bank of Boston, Justice Lamar disagreed with the majority's interpretation of "fraudulent intent" in bankruptcy law. He argued that a debtor who transfers property to another person without receiving adequate consideration in return is presumed to have acted with fraudulent intent, regardless of his actual state of mind at the time. This presumption should apply even if the debtor was insolvent and unable to pay his debts when he made the transfer. According to Justice Lamar, this interpretation would better serve public policy by discouraging debtors from making preferential transfers that could undermine their creditors' interests.