The U.S. Supreme Court case Fairbanks Steam Shovel Company v. Wills, Trustee in Bankruptcy of Federal Contracting Company (1915) revolved around a dispute over the payment for steam shovels used in construction work by the bankrupt company, Federal Contracting Co., which was under contract with Panama Railroad Co. The plaintiff, Fairbanks Steam Shovel Co., had leased equipment to the contracting firm and claimed that they were entitled to receive payments from Panama Railroad directly as per an agreement between all parties involved. However, when Federal Contracting went bankrupt before completing its obligations under the contract and paying off its debt to Fairbanks, Wills - as trustee - argued that any remaining funds should go towards settling other debts of the insolvent company first rather than being paid out directly to Fairbanks. The court ruled against this argument stating that since there was a clear understanding among all parties about direct payments from Panama Railroad going towards settlement of dues owed by Federal Contracting to Fairbanks; these funds could not be considered part of general assets available for distribution among various creditors during bankruptcy proceedings.

In the dissenting opinion for Fairbanks Steam Shovel Company v. Wills, Trustee in Bankruptcy of Federal Contracting Company, it was argued that the majority's decision disregarded established principles of equity and bankruptcy law. The dissent took issue with the Court's interpretation of a contract between Fairbanks and Federal Contracting as creating an equitable lien on property owned by Federal Contracting. They contended that this interpretation failed to recognize that such liens are typically only created when there is clear intent to do so or out of necessity to prevent unjust enrichment - neither condition being met in this case. Furthermore, they disagreed with allowing a creditor (Fairbanks) who had not obtained a legal lien prior to bankruptcy proceedings, to now assert an equitable claim over other creditors without providing any additional consideration or security beyond what was originally agreed upon in their contract.