In the 1917 case Hull, Trustee in Bankruptcy of Palmer v. Farmers' Loan & Trust Company et al., the United States Supreme Court dealt with a dispute over bankruptcy and property rights. The trustee in bankruptcy for William J. Palmer claimed that certain bonds held by Farmers' Loan & Trust Company should be included as assets in Palmer's estate to pay off his creditors. However, these bonds were issued under Colorado law which stated they could not be attached or sold to satisfy any debt unless it was specifically mentioned on their face - which wasn't the case here. The court ruled against Hull, stating that while federal bankruptcy laws generally supersede state laws regarding debtor-creditor relationships, this did not apply when specific property rights established by state law are involved. Therefore, since Colorado law explicitly protected these particular bonds from being used to satisfy debts (unless otherwise specified), they could not be considered part of Palmer's bankrupt estate.

In the dissenting opinion for Hull v. Farmers' Loan & Trust Company, Justice McReynolds argued that the bankruptcy court did not have jurisdiction to set aside a fraudulent transfer of property from Palmer to his wife because it occurred more than four months before he filed for bankruptcy. He contended that under Section 67e of the Bankruptcy Act, only transfers made within four months prior to filing could be invalidated by a trustee in bankruptcy. Furthermore, he disagreed with the majority's interpretation of "reasonable cause to believe" as used in Section 67e and asserted that this phrase should mean actual knowledge or circumstances which would lead an ordinarily prudent business man to investigate further. In his view, there was no evidence showing such awareness on part of Mrs. Palmer when she received her husband's property.