In the case of Indianapolis et al. v. Chase National Bank, Trustee, et al., 1941, the U.S Supreme Court ruled in favor of Chase National Bank and other bondholders against the city of Indianapolis and its Board of Sanitary Commissioners. The dispute arose from a sewer improvement project that was funded by bonds issued by the city's Board of Sanitary Commissioners under an Indiana statute which provided for such financing but did not explicitly state that these obligations were backed by full faith and credit or taxing power of municipality issuing them. When economic conditions worsened during Great Depression era, revenues generated from special assessments fell short to repay bondholders leading to default on interest payments due on bonds held by Chase bank among others who then sued for recovery. The court held that despite absence explicit statutory language providing so, given nature & purpose underlying issuance i.e., public improvements benefiting all residents; it impliedly obligated municipality with responsibility towards repayment thus making it liable for shortfall between assessment collections & amount owed to bondholders thereby upholding lower courts' rulings directing City officials levy property tax sufficient cover deficit.

In the dissenting opinion for Indianapolis et al. v. Chase National Bank, Trustee, et al., Justice Frankfurter disagreed with the majority's decision to allow a city to default on its bonds without consequence. He argued that this ruling undermined public confidence in government-issued securities and could potentially destabilize financial markets by discouraging investment in such securities due to increased risk of non-payment. Furthermore, he contended that it was not within the Court’s purview to decide whether or not a municipality should honor its debts; rather, it should uphold contract law and ensure obligations are met as agreed upon by parties involved. The justice also expressed concern about potential negative impacts on future municipal financing efforts resulting from this decision.