In the case of Manson v. Williams, Trustee in Bankruptcy of Hudson Clothing Company (1908), the US Supreme Court was tasked with determining whether a bankruptcy trustee could recover payments made by an insolvent debtor to a creditor within four months prior to filing for bankruptcy. The debtor, Hudson Clothing Company, had paid off its debt to Manson before declaring bankruptcy. Under Section 60b of the Bankruptcy Act of 1898, such payments can be recovered if they were made while the debtor was insolvent and if it resulted in one creditor receiving more than their fair share compared to other creditors. The court ruled that since both conditions were met - Hudson Clothing Company was indeed insolvent at the time of payment and this payment allowed Manson to receive more than he would have under equal distribution among creditors - Williams as trustee had every right to recover these funds from Manson.

In the dissenting opinion for Manson v. Williams, the justice argued that the majority's decision was inconsistent with previous rulings and principles of equity. The dissent focused on two main points: first, that a creditor who has received preferential payments from an insolvent debtor should not be allowed to retain those payments if they were made within four months of bankruptcy; second, that such a creditor should not be able to offset these payments against debts owed by them to the bankrupt party unless there is clear evidence of mutual credit at the time when both obligations were incurred. The justice believed this approach would better protect all creditors' interests in bankruptcy cases and maintain fairness in distributing assets among them.