In the case of First National Bank of Baltimore v. Staake, 1905, the U.S Supreme Court was tasked with determining whether a bank could be held liable for paying on a check that had been fraudulently altered by an unknown third party. The defendant in this case, Mr. Staake, had written and signed a check for $75 which was later fraudulently raised to $750 by an unidentified individual before being presented at the plaintiff's bank (First National Bank of Baltimore) for payment. Upon discovering the fraudulent alteration after payment had been made, Mr. Staake sued to recover his losses from the bank. The court ruled in favor of Mr.Staake stating that it is incumbent upon banks to ensure they are not facilitating fraudulent transactions and should have detected such obvious alterations before making payments on checks drawn against their customers' accounts. This ruling established precedent regarding liability in cases involving forged or altered checks; placing responsibility onto financial institutions rather than individuals who may fall victim to such schemes.

In the dissenting opinion for the case of First National Bank of Baltimore v. Staake, it was argued that there were significant issues with how the majority interpreted and applied Maryland's law regarding negotiable instruments. The dissent emphasized that under Maryland law, a bank is not liable if it pays on a forged check unless negligence can be proven. In this case, they believed no such negligence had been demonstrated by Staake in his dealings with the bank or its employees. They also disagreed with the majority’s interpretation of "due course" within Maryland's laws governing negotiable instruments - arguing that due course should only apply when an instrument has been obtained fraudulently or unlawfully which wasn't applicable to this situation as per their understanding. Therefore, they concluded that First National Bank should not bear responsibility for paying on what turned out to be a forged check.