In the case of Harriman National Bank of New York v. Seldomridge, as Receiver of the Mercantile National Bank of Pueblo, Colorado (1918), the Supreme Court was tasked with determining whether a national bank could be held liable for accepting deposits from another bank that it knew or should have known was insolvent. The Mercantile National Bank had deposited funds into an account at Harriman shortly before being declared insolvent and going into receivership. The receiver sought to recover these funds from Harriman on behalf of Mercantile's creditors. The court ruled in favor of Harriman, stating that there is no legal obligation for a bank to investigate the solvency status of other banks making deposits unless there are clear signs indicating insolvency which would make acceptance fraudulent towards creditors. Therefore, since there were no such indications in this case, Harriman was not required to return any money.

In the dissenting opinion for Harriman National Bank of New York v. Seldomridge, the justice argued that the majority's decision was inconsistent with established principles of law and equity. The dissent focused on two main points: first, that a bank should not be held liable for accepting deposits in good faith without knowledge or reason to suspect insolvency; secondly, they disagreed with the majority's interpretation of "preference" under bankruptcy laws. They contended that it is unjust to penalize a creditor who has received payment from an insolvent debtor in good faith and without any intention to prefer over other creditors. Furthermore, they maintained that such transactions are common in banking practice and do not constitute fraudulent conveyances unless there is evidence of collusion or intent to defraud other creditors. Therefore, according to this view, Harriman Bank should not have been held liable as it acted innocently and within normal business practices.