In the Haseltine v. Central Bank of Springfield, Missouri case in 1901, the U.S Supreme Court ruled on a dispute involving a bank's right to offset its debts with funds from an account holder who also owed money to the bank. The plaintiff, Haseltine, was both a depositor and debtor at Central Bank of Springfield. When he declared bankruptcy and his assets were assigned to trustees for distribution among creditors, the bank used his deposit balance to reduce his debt without seeking approval from or notifying either him or his trustees. The court held that while banks generally have this right of setoff under common law principles when dealing with insolvent customers' accounts, they lose it once those customers declare bankruptcy and their assets are transferred into trusts for creditor payment purposes because these trust funds are legally distinct entities meant solely for equitable distribution among all creditors rather than preferential repayment of specific ones like banks exercising rights of setoff.

The dissenting opinion in the case of Haseltine v. Central Bank of Springfield, Missouri argued that the majority's decision was incorrect because it failed to consider important aspects of commercial law and practice. The dissent believed that a bank should not be held liable for accepting deposits from an individual who has fraudulently obtained possession of corporate funds, unless the bank had actual knowledge or suspicion about this fraudulent activity. They contended that banks are not expected to investigate every deposit made into their accounts as they operate on trust and confidence with their clients. Therefore, according to them, holding banks responsible under such circumstances would disrupt normal banking operations and could potentially harm commerce by creating unnecessary burdens on financial institutions.