In the case of McCollum, Trustee in Bankruptcy v. Hamilton National Bank (1937), the United States Supreme Court ruled on a dispute involving bankruptcy law and property rights. The case centered around whether or not a bank could retain possession of collateral that was pledged to it by a bankrupt debtor who had defaulted on their loan before filing for bankruptcy. The trustee argued that under Section 60b of the Federal Bankruptcy Act, they should be able to recover this collateral because it constituted an unlawful preference given within four months prior to filing for bankruptcy. However, the court disagreed with this interpretation and sided with Hamilton National Bank instead. The court held that since there was no transfer of property from debtor to creditor during those four months but rather only retention by the latter after defaulting on payment obligations, such action did not constitute an unlawful preference as defined by Section 60b. Therefore, Hamilton National Bank was allowed to keep its hold over said assets despite McCollum's objections.

In the dissenting opinion for McCollum v. Hamilton National Bank, Justice Cardozo disagreed with the majority's interpretation of Section 60b of the Bankruptcy Act. He argued that this section should not be interpreted to mean that a trustee in bankruptcy could recover payments made by an insolvent debtor within four months prior to filing for bankruptcy if those payments were made while he was insolvent and preferred one creditor over another. Instead, Justice Cardozo believed that such payments could only be recovered if they had been made with actual intent to prefer one creditor over others. In his view, interpreting Section 60b otherwise would unfairly penalize creditors who received payment in good faith without knowledge of the debtor's insolvency or intention to file for bankruptcy.