In the case of Lamb v. Schmitt, 1931, the United States Supreme Court ruled on a matter concerning bankruptcy law and its application to stockholders' liability. The petitioner, Lamb, was a shareholder in an insolvent national bank and had been assessed by the Comptroller of Currency for additional funds as per his proportional share in line with federal banking laws. He paid under protest and then filed suit against Schmitt (the receiver) to recover these payments arguing that he should not be held liable because he purchased his shares without knowledge of their insolvency status. The court rejected this argument stating that ignorance does not exempt shareholders from statutory liability when they purchase shares from an insolvent institution. It emphasized that it is incumbent upon potential investors to ascertain whether or not a bank is solvent before purchasing its shares; failure to do so does not absolve them from financial responsibility if it later becomes insolvent.

In the dissenting opinion for Lamb v. Schmitt, Justice Stone argued that the majority's decision to deny relief to a creditor who had not received notice of bankruptcy proceedings was unjust. He contended that due process requires all interested parties be given an opportunity to present their case before any final judgment is made. In this instance, he believed the creditor should have been notified about the bankruptcy proceedings and allowed to assert his claim against the debtor's estate. The failure to do so violated his constitutional rights and rendered any subsequent judgments void in relation to him. Furthermore, Justice Stone disagreed with the majority’s interpretation of Section 57n of Bankruptcy Act as it did not explicitly state that claims are barred if creditors fail or refuse after notice has been sent by mail; rather it only stated they are barred if they fail or refuse without cause shown within such time as court fixes or allows which implies some form of hearing where cause can be shown.