In Masterson, Assignee v. Howard, the United States Supreme Court was asked to decide whether a creditor could recover a debt from a third party who had received money from the debtor. The Court held that a creditor could not recover a debt from a third party who had received money from the debtor, unless the third party had received the money with knowledge of the debt. The case arose when the plaintiff, Masterson, was assigned a debt owed by the defendant, Howard. Masterson then sued a third party, who had received money from Howard, to recover the debt. The third party argued that he had received the money without knowledge of the debt, and thus should not be liable for the debt. The Supreme Court held that a creditor could not recover a debt from a third party who had received money from the debtor, unless the third party had received the money with knowledge of the debt. The Court reasoned that the third party should not be held liable for a debt that he had no knowledge of. The Court also noted that the creditor could still recover the debt from the debtor, and that the third party should not be held liable for the debt. In conclusion, the Supreme Court held that a creditor could not recover a debt from a third party who had received money from the debtor, unless the third party had received the money with knowledge of the debt.

In Masterson v. Howard, the Supreme Court was tasked with determining whether a debt incurred by an insolvent debtor could be collected from his assignee in bankruptcy proceedings. The majority opinion held that it could not, as such debts were discharged upon assignment and thus no longer legally enforceable against the assignee. In dissent, Justice Field argued that this interpretation of the law would lead to unjust results for creditors who had relied on their right to collect from an insolvent debtor's estate after assignment. He reasoned that Congress did not intend for creditors' rights to be so easily extinguished and proposed instead that any debt assigned should remain valid until paid or otherwise satisfied by its terms. Furthermore, he contended that if Congress had intended for all debts assigned to become unenforceable then they would have included language explicitly stating such in relevant statutes governing bankruptcy proceedings; since they failed to do so it is reasonable to assume they meant something else entirely when passing those laws.