In the case of Freund et al. v. United States, 1922, the Supreme Court ruled on a matter concerning tax law and business partnerships. The plaintiffs were partners in a firm that had purchased war-time certificates of indebtedness with firm money but held them as individual property. When they sold these certificates at a profit after the end of World War I, they did not include this income when calculating their partnership's taxable profits for that year. The Commissioner of Internal Revenue disagreed with this exclusion and assessed additional taxes against them accordingly. The plaintiffs argued before the Supreme Court that since they owned these certificates individually rather than as part of their partnership assets, any gains from selling them should be considered personal income rather than business profits subject to taxation under federal law governing partnerships. However, the court rejected this argument stating that even though legal title was vested in individuals it was still acquired by using funds belonging to all members collectively hence making it an asset or investment made on behalf of all members jointly thus liable for taxation under laws applicable to firms/partnerships.

In the dissenting opinion for Freund et al. v. United States, Justice McReynolds disagreed with the majority's decision to uphold the conviction of defendants under the Espionage Act of 1917. He argued that there was insufficient evidence to prove that they had conspired to obstruct military recruitment during World War I as charged by prosecutors. The justice believed that their actions were protected under free speech rights guaranteed by First Amendment and did not pose a clear and present danger, which is required for such speech to be punishable according to precedent set in Schenck v. United States (1919). Furthermore, he contended that even if some parts of their speeches could be construed as harmful or dangerous, these should have been considered separately rather than collectively leading towards an alleged conspiracy against recruitment efforts.