In the 1920 case of El Banco Popular de Economias y Prestamos de San Juan, P. R., v. Wilcox, the United States Supreme Court ruled in favor of El Banco Popular. The dispute arose when Mr. Wilcox defaulted on a loan from the bank and his property was seized as collateral by Puerto Rican authorities under local insolvency laws. However, since these proceedings were initiated after U.S bankruptcy law had been extended to Puerto Rico but before it had taken effect there, Mr. Wilcox argued that they should have been halted until federal bankruptcy procedures could be applied instead. The court disagreed with this argument and held that because Congress did not explicitly provide for such an interim period in its legislation extending U.S bankruptcy law to Puerto Rico, local insolvency proceedings could continue uninterrupted during this time frame. Therefore, the seizure of Mr.Wilcox's property was deemed lawful and he remained liable for his debt to El Banco Popular despite his claims about procedural irregularities due to changes in applicable bankruptcy laws.

In the dissenting opinion for El Banco Popular de Economias y Prestamos de San Juan, P. R., v. Wilcox, it was argued that the Supreme Court should not have jurisdiction over this case as it involves a dispute between private parties and does not concern federal law or constitutional issues. The dissenting justices believed that the majority's decision to hear this case represented an unnecessary expansion of federal judicial power into areas traditionally reserved for state courts. They also disagreed with the majority's interpretation of Puerto Rican law, arguing that local laws should be interpreted by local courts unless there is a clear violation of U.S constitution or federal laws.