In the 1924 case of Guardian Savings & Trust Company, Trustee v. Road Improvement District No. 7 of Poinsett County, Arkansas, the U.S Supreme Court ruled in favor of the plaintiff - Guardian Savings & Trust Company. The company had purchased bonds issued by an Arkansas road district and later sued when it did not receive payment on them due to a state law that allowed for their repudiation if they were found to be illegally issued. The court held that this was unconstitutional as it violated the contract clause of the Constitution which prohibits states from passing laws impairing contractual obligations. Therefore, even though there may have been irregularities in issuing these bonds initially, once they were sold to innocent purchasers like Guardian Savings & Trust Company who bought them in good faith without knowledge or reason to suspect any illegality or irregularity about their issuance; such purchasers' rights cannot be impaired by subsequent legislation declaring those bonds void.

In the dissenting opinion for the case of Guardian Savings & Trust Company, Trustee v. Road Improvement District No. 7 of Poinsett County, Arkansas (1924), it was argued that the majority's decision to uphold a tax assessment on bonds issued by an improvement district violated principles of due process and equal protection under law. The dissenting justices contended that this ruling allowed local governments to arbitrarily impose taxes without providing bondholders with any recourse or means of challenging these assessments in court. They also expressed concern about potential abuses stemming from this unchecked power, including possible discrimination against out-of-state investors who might be targeted with higher tax rates than those imposed on local residents. Ultimately, they believed that such practices were fundamentally unfair and inconsistent with constitutional guarantees protecting property rights.