In the case of Lowden et al., Trustees v. Simonds-Shields-Lonsdale Grain Co., 1938, the U.S Supreme Court was tasked with determining whether a bankruptcy court had jurisdiction to order a trustee in bankruptcy to pay for grain that was delivered after an involuntary petition in bankruptcy had been filed against a debtor but before adjudication. The trustees argued they were not liable as they did not authorize or ratify the purchase of grain made by the bankrupt company during this period. However, Simonds-Shields-Lonsdale Grain Company contended that since it wasn't aware of any pending insolvency proceedings when it sold and delivered its goods, it should be paid from estate funds under Section 64b(5) of Bankruptcy Act which prioritizes payment for those who have supplied goods within four months prior to filing for bankruptcy. The Supreme Court ruled in favor of Simonds-Shields-Lonsdale Grain Co., holding that even though there is no explicit provision allowing such claims under Section 64b(5), these transactions fall within its purview and thus are entitled to priority payment.

In the dissenting opinion for Lowden et al., Trustees v. Simonds-Shields-Lonsdale Grain Co., Justice Black argued that the majority's decision was inconsistent with previous rulings and interpretations of bankruptcy law. He contended that a trustee in bankruptcy should not be allowed to recover payments made by an insolvent debtor before declaring bankruptcy, if those payments were made in good faith and without knowledge of insolvency. The justice believed this ruling would unfairly penalize creditors who had no reason to suspect their debtor's financial instability, potentially discouraging future business transactions due to fear of similar legal repercussions. Furthermore, he pointed out inconsistencies between this case’s ruling and earlier decisions on similar issues which could lead to confusion about how these laws are applied.