In the 1920 case of Jackson, Receiver of the First Co-Operative Building Association of Georgetown, D.C. v. Smith et al., the United States Supreme Court dealt with a dispute over property rights and mortgage payments. The First Cooperative Building Association had issued loans to several individuals who then defaulted on their mortgages. As receiver for the association, Jackson sought to recover these unpaid debts by foreclosing on properties that were used as collateral for those loans. However, some defendants argued that they should not be held liable because they were not properly notified about changes in loan terms or increases in interest rates due to lack of proper communication from the association's board members during its meetings which led them into defaulting unknowingly. The court ruled against this argument stating that it was each member’s responsibility to stay informed about any changes made regarding their financial obligations towards their respective associations even if there is no direct notification provided by said associations' boards. This ruling set a precedent emphasizing individual responsibility within cooperative organizations and reinforced lenders' rights when dealing with borrowers who fail to meet agreed-upon payment schedules.

In the dissenting opinion for Jackson v. Smith, Justice McReynolds argued that the majority's decision was inconsistent with prior rulings and failed to properly consider the rights of creditors. He believed that a receiver should not be allowed to recover funds from innocent third parties who received payments in good faith without knowledge of insolvency or fraudulent intent on part of debtor. According to him, this would unfairly penalize those individuals and could potentially discourage future business transactions due to fear of potential liability. Furthermore, he contended that such an approach would disrupt established commercial practices and undermine confidence in financial institutions by making them liable for actions beyond their control or knowledge.