The Knox National Farm Loan Association v. Phillips case in 1936 revolved around the constitutionality of a law that allowed farm loan associations to be sued in any county where they had conducted business, rather than only in their home counties. The Supreme Court ruled unanimously that this provision was unconstitutional because it violated due process rights under the Fourteenth Amendment by depriving these associations of fair and impartial trials. The court argued that forcing an association to defend itself far from its home base could prejudice juries against it, thus denying it equal protection under the law. This decision reinforced the principle that all entities have a right to fair treatment within judicial proceedings.

In the dissenting opinion for Knox National Farm Loan Association v. Phillips, Justice Stone argued that the majority's decision was a departure from established principles of statutory construction and constitutional law. He believed that Congress had intended to give farm loan bonds issued by joint-stock land banks a privileged status in bankruptcy proceedings, as they were designed to aid farmers during times of economic distress. The majority's interpretation undermined this purpose by treating these bonds like ordinary unsecured claims in bankruptcy cases. Furthermore, he disagreed with the majority's view that giving preferential treatment to these bonds would violate the Fifth Amendment’s due process clause because it unfairly discriminated against other creditors. Instead, he contended such discrimination was justified given its reasonable relation to Congress' policy objective of supporting agriculture.