In the case of MacDonald, Trustee in Bankruptcy of Craig, Reed & Emerson, Inc. v. Plymouth County Trust Co., 1931, the U.S Supreme Court was tasked with determining whether a bank could claim priority over other creditors for funds deposited by a bankrupt company prior to its bankruptcy declaration. The court ruled that such deposits were not trust funds and therefore did not give the bank preferential rights over other creditors during bankruptcy proceedings. This decision established an important precedent regarding creditor's rights in bankruptcy cases: unless there is clear intent to create a trust relationship or some form of security interest between debtor and creditor (which wasn't present here), general unsecured creditors cannot claim priority based on mere possession or control over debtor's assets.

In the dissenting opinion for the case of MacDonald v. Plymouth County Trust Co., Justice Stone argued that the majority's decision was inconsistent with previous rulings and federal bankruptcy law. He contended that under Section 60b of Bankruptcy Act, a preference could be set aside if it occurred within four months before filing for bankruptcy and allowed any creditor to receive more than they would have in liquidation proceedings under Chapter 7. In this case, he believed that Craig, Reed & Emerson Inc.'s transfer of assets to Plymouth County Trust Co. met these conditions and should therefore be voided as preferential payment. Furthermore, Justice Stone disagreed with the majority's interpretation of "insolvency" in relation to this section of law; he asserted insolvency should not only consider actual but also impending or constructive insolvency at time when preference was given which is consistent with purpose behind avoiding preferences i.e., equitable distribution among creditors.