In the 1901 case of Lander v. Mercantile Bank, the U.S Supreme Court was tasked with determining whether a bank could be held liable for accepting and cashing checks that were fraudulently endorsed. The plaintiff, Lander, had issued several checks to various parties who then fraudulently endorsed them over to a third party. This third party deposited these checks into their account at Mercantile Bank which accepted and cashed them without verifying the endorsements' authenticity. The court ruled in favor of Mercantile Bank stating that it is not within a bank's duty or responsibility to verify every endorsement on every check they receive for deposit or payment unless there are circumstances arousing suspicion of potential forgery. It further stated that banks would face an impossible task if required to investigate each endorsement as this would slow down commerce significantly. Therefore, according to this ruling, unless there are clear signs suggesting potential forgery or fraudulent activity related with any financial instrument like cheques presented by customers for transactions; banks cannot be held responsible if such instruments later turn out being forged or manipulated.

The dissenting opinion in the case of Lander v. Mercantile Bank argued that the majority's decision was an overreach and misinterpretation of federal jurisdiction. The dissenters believed that this case should have been handled by state courts, as it involved a dispute between private parties about a contract governed by state law. They contended that just because one party to the contract was a national bank did not automatically make it a matter for federal courts to decide upon, especially when no federal laws or rights were at stake in the disagreement. Furthermore, they expressed concern that such broad interpretation could lead to an unnecessary expansion of federal court power into matters traditionally reserved for states' jurisdiction.