In the case of Latzko et al. v. Equitable Trust Company, Trustee (1927), the plaintiffs were holders of bonds issued by a corporation that later went bankrupt. The defendant was the trustee under an indenture securing these bonds and had also acted as depositary for funds collected from bondholders to protect their interests during bankruptcy proceedings. The plaintiffs claimed that they suffered losses due to negligence on part of the defendant in performing its duties as trustee and depositary, including failure to properly safeguard assets or take necessary legal action against defaulting debtors. The Supreme Court ruled in favor of Equitable Trust Company, stating that it did not breach any fiduciary duty owed to bondholders because it acted within its rights outlined in the trust agreement with regards to handling defaulted payments and pursuing legal remedies against defaulters. Furthermore, no evidence was presented showing gross negligence or willful misconduct by Equitable which would have justified holding them liable for damages incurred by bondholders due to depreciation in value of securities held under trust.

The dissenting opinion in the case of Latzko et al. v. Equitable Trust Company, Trustee argued that the majority's decision was inconsistent with prior rulings and principles of equity. The dissent contended that a trust deed should be considered as one instrument, not separated into distinct parts for different purposes. It also disagreed with the majority's interpretation of "default," arguing it should include any failure to meet obligations under the trust deed, including payment defaults on bonds secured by it - not just technical breaches such as failing to maintain insurance or pay taxes on property securing those bonds. Furthermore, they believed that bondholders had an equitable right to insist upon strict compliance with all terms and conditions contained within their contract; thus if there is default in any respect then foreclosure proceedings could commence immediately without waiting for maturity date of bonds or other formalities which might delay recovery process unnecessarily.