In the case of First National Bank of Chicago v. Chicago Title & Trust Company, 1904, the U.S Supreme Court was tasked with determining whether a bank could be held liable for not honoring checks due to insufficient funds in an account. The dispute arose when the First National Bank refused to honor several checks presented by the Chicago Title & Trust Company on behalf of its client who had insufficient funds in their account at that time. The court ruled in favor of First National Bank stating that it was under no obligation to pay any check unless there were sufficient funds or credit within its possession belonging to the customer upon whom such check is drawn. Therefore, if a bank pays out more than what's available from a customer's balance and suffers loss as a result, it cannot recover this amount from anyone but that particular customer.

In the dissenting opinion for the case of First National Bank of Chicago v. Chicago Title & Trust Company, it was argued that the majority's decision to uphold a lower court ruling which allowed a bank to recover funds mistakenly paid out due to an error in bookkeeping was incorrect. The dissenting justices believed that this ruling contradicted established legal principles regarding mistakes and unjust enrichment. They contended that if a party makes a payment under mistake, they should bear the loss unless there is fraud or undue advantage taken by another party. In this case, they saw no evidence of such misconduct on part of the recipient (Chicago Title & Trust Company). Furthermore, they pointed out that allowing recovery could potentially disrupt commercial transactions as parties would constantly be uncertain whether payments received might later be claimed back due to errors unknown at their end. Thus, according to them, upholding such claims would not serve justice or public policy interests.