The U.S. Supreme Court case Liberty Oil Company v. Condon National Bank et al., 1922, revolved around a dispute over the payment of checks issued by Liberty Oil Company to various oil producers and endorsed to Condon National Bank. The bank had cashed these checks but later found them to be fraudulent when it was discovered that they were not backed by sufficient funds or valid contracts for oil delivery from the supposed payees (oil producers). When the bank sought reimbursement from Liberty Oil, the company refused on grounds that it was defrauded into issuing those checks in first place due to deceptive practices of certain individuals posing as legitimate oil operators. The court ruled in favor of Condon National Bank stating that under Uniform Negotiable Instruments Law, an entity which takes possession of a negotiable instrument for value, in good faith without notice of any defect has rights against all prior parties regardless if fraud is involved unless there's explicit proof showing otherwise. In this case, since no such evidence existed proving bad faith on part of bank while accepting those endorsements nor its involvement with fraudulent scheme; hence it could rightfully claim reimbursement from issuer i.e., Liberty Oil.

The dissenting opinion in the case of Liberty Oil Company v. Condon National Bank et al., argued that the majority's decision was inconsistent with previous rulings and principles of equity. The dissent contended that a bank should not be allowed to profit from its own wrongdoing, which in this case involved accepting deposits from an insolvent company (Liberty Oil) while knowing about its financial state. It further asserted that allowing such actions would undermine public confidence in banks and encourage fraudulent behavior by both banks and companies facing insolvency. Therefore, it suggested that the bank should bear some responsibility for losses incurred due to their complicity or negligence.