In the 1898 case Hubbard, Assignee v. Tod, the United States Supreme Court addressed a dispute over maritime law and bankruptcy. The plaintiff was an assignee in bankruptcy for a shipbuilding company that had contracted with defendant to build two ships. After completion of one ship but before starting on the second, the company went bankrupt and could not fulfill its contract obligations. The defendant sued for damages due to breach of contract; however, because this occurred after bankruptcy proceedings began, it was unclear whether he should be considered as a creditor in those proceedings or if his claim fell under admiralty jurisdiction (maritime law). Ultimately, the court ruled that while contracts related to shipbuilding do fall under admiralty jurisdiction generally speaking - when such contracts are breached prior to any construction beginning they become simple contractual disputes rather than maritime ones. Therefore it held that since no work had begun on building the second vessel at time of bankruptcy filing by builder's firm - hence there being no 'maritime lien' created yet - defendant's claim did not qualify him as a secured creditor within said proceeding but instead made him an unsecured general creditor therein.

In the dissenting opinion for Hubbard, Assignee v. Tod, Justice Harlan disagreed with the majority's interpretation of bankruptcy law and its application to this case. He argued that when a debtor voluntarily assigns his property to a trustee for distribution among creditors, it does not constitute an act of bankruptcy under federal law unless there is evidence that such assignment was made with intent to hinder or delay creditors. In this particular case, he believed there was no proof showing any fraudulent intent on part of the debtor while making voluntary assignments; therefore it should not be considered as an act of bankruptcy. Furthermore, he emphasized that state laws allowing debtors to make voluntary assignments are not in conflict with federal bankruptcy laws unless they provide protection against compulsory proceedings by creditors under those laws.