In the case of Eau Claire National Bank v. Jackman (1906), the U.S. Supreme Court ruled in favor of Eau Claire National Bank, overturning a decision by the Wisconsin Supreme Court. The dispute centered around whether or not a bank could be held liable for damages when it refused to honor checks presented by an individual who had sufficient funds in his account but was mentally incapacitated at the time he wrote them. The court determined that since there were no legal restrictions on Mr.Jackman's ability to manage his own finances and because he had ample funds available, it was improper for the bank to refuse payment based solely on its belief about his mental state. Therefore, they concluded that Eau Claire National Bank should have honored Mr.Jackman’s checks and their refusal constituted a breach of contract with him as their depositor.

In the dissenting opinion for EAU CLAIRE NATIONAL BANK v. JACKMAN, it was argued that the majority's decision to allow a bank to recover money paid under mistake of fact contradicted established legal principles. The dissent emphasized that when a party makes an error in judgment or fails to exercise due diligence, they should bear the consequences of their actions rather than being able to shift responsibility onto others who acted in good faith. It was also pointed out that allowing recovery could lead to unjust enrichment and would undermine confidence in commercial transactions if parties could not rely on payments received as final and irrevocable. Furthermore, it was contended that there were no compelling reasons presented by the plaintiff for deviating from these well-established rules.