In the case of Joaquin Ibanez De Aldecoa Y Palet et al. v. Hongkong & Shanghai Banking Corporation, 1917, the U.S Supreme Court was tasked with determining whether or not a bank could be held liable for damages caused by its refusal to honor checks drawn on it by a depositor who had sufficient funds in his account at the time of presentation but subsequently became insolvent before the checks were presented for payment. The court ruled that once a check is issued and accepted by a bank, an obligation exists between both parties which cannot be affected by subsequent events such as insolvency. Therefore, if there are sufficient funds in an account when a check is presented for payment, then it must be honored regardless of any changes in circumstances thereafter.

In the dissenting opinion for Joaquin Ibanez de Aldecoa y Palet et al. v. Hongkong & Shanghai Banking Corporation, it was argued that the majority's decision to dismiss the case on jurisdictional grounds was incorrect. The dissent contended that there were sufficient connections between the parties and transactions involved in this case and U.S territory, which should have allowed for jurisdiction under federal law. They believed that because some of these transactions occurred within U.S territories or involved American citizens, they fell within domestic legal purview despite their international nature. Furthermore, they disagreed with the majority's interpretation of "transitory" actions as those only occurring within a single nation-state’s borders; instead arguing such actions could span multiple jurisdictions without losing their transitory character.