In the 1898 case of First National Bank of Wellington v. Chapman, the United States Supreme Court ruled on a dispute involving bankruptcy and debt repayment. The defendant, Mr. Chapman, had filed for bankruptcy after defaulting on his loan from the plaintiff, First National Bank of Wellington. However, he later acquired property which was not included in his original list of assets during his bankruptcy proceedings. The bank argued that this newly-acquired property should be used to repay its loan. The court held that under Section 70e of the Federal Bankruptcy Act (FBA), all properties obtained by a bankrupt individual post-bankruptcy filing are free from any claims by creditors unless they were purchased with funds fraudulently withheld from the estate or if there is an express contract between debtor and creditor stating otherwise. Therefore, since neither condition applied in this case - no fraudulent withholding nor explicit agreement existed - Mr.Chapman's new property could not be claimed by First National Bank as part of their unpaid debt recovery efforts.

In the dissenting opinion for the case of First National Bank of Wellington v. Chapman, it was argued that a national bank should not be allowed to offset its debt with funds from a depositor's account without first obtaining consent or providing notice. The dissenting justices believed that this action violated the rights of depositors and exceeded the powers granted to banks under federal law. They also contended that allowing such practices could lead to abuse by banks and harm innocent third parties who may have claims against those funds. Furthermore, they disagreed with majority’s interpretation of “individual liability” in relation to banking laws, arguing instead for an understanding based on common law principles rather than statutory construction.