In the 1934 case of Louisville Joint Stock Land Bank v. Radford, the U.S Supreme Court ruled that a provision in the Frazier-Lemke Farm Bankruptcy Act was unconstitutional as it violated the Fifth Amendment's protection against taking private property without just compensation. The act allowed farmers to retain possession of their land for five years while paying rent and then buy back at its current appraised value rather than what they originally owed on it. The court found this unfair to mortgage holders who had rights to foreclose and sell properties under state law if borrowers defaulted on payments, which were taken away by this federal legislation without any form of compensation.

In the dissenting opinion for Louisville Joint Stock Land Bank v. Radford, Justice Benjamin Cardozo disagreed with the majority's interpretation of the Fifth Amendment and its application to bankruptcy law. He argued that a debtor's right to retain possession of his property until payment in full does not constitute an absolute right under all circumstances but is subject to modification by Congress in exercising its constitutional power over bankruptcies. The Frazier-Lemke Act, which allowed farmers facing foreclosure during the Great Depression to keep their land while they reorganized their debts, was such a permissible modification according to Cardozo. He believed that this act did not deprive creditors of "property" without due process because it merely adjusted rights between debtors and creditors - something within Congress' purview when enacting bankruptcy legislation.