The U.S. Supreme Court case Guarantee Title & Trust Company, Trustee of Pittsburgh Industrial Iron Works, Bankrupt v. Title Guaranty & Surety Company in 1911 revolved around a dispute over the rights to certain property following bankruptcy proceedings. The plaintiff was the trustee for Pittsburgh Industrial Iron Works which had gone bankrupt and sought to recover assets from the defendant, who held a mortgage on some of its properties as security for debts owed by another company that had also gone bankrupt. The court ruled in favor of the defendant stating that it could retain possession of these properties because they were not part of Pittsburgh's estate at the time it filed for bankruptcy since they were already pledged as collateral elsewhere before then.

In the dissenting opinion for Guarantee Title & Trust Company v. Title Guaranty & Surety Company, Justice Holmes argued that the majority's decision to allow a creditor to recover its claim from a bankrupt debtor was incorrect. He believed that this ruling contradicted previous case law and unfairly favored certain creditors over others in bankruptcy proceedings. The justice contended that when an entity declares bankruptcy, all of its assets should be distributed equally among all creditors, regardless of any prior agreements or arrangements made before the declaration of bankruptcy. In his view, allowing one creditor to receive full payment while others received only partial compensation violated principles of fairness and equity inherent in bankruptcy laws.