In the case of Michigan Trust Company v. Ferry (1912), the U.S Supreme Court ruled in favor of Michigan Trust Company, reversing a previous decision by the Circuit Court of Appeals for the Sixth Circuit. The dispute centered around whether or not certain bonds issued by William M. Ferry Jr., who was insolvent at that time, were fraudulent and therefore voidable under bankruptcy law. The court held that since these bonds were issued as part of a legitimate business transaction and not with any intent to defraud creditors, they could not be deemed fraudulent merely because Mr. Ferry was insolvent when he made them. Therefore, it concluded that these bonds should be treated like any other debt in his bankruptcy proceedings.

In the dissenting opinion for Michigan Trust Company v. Ferry, it was argued that the majority's decision to uphold a lower court ruling - which found in favor of the plaintiff and against defendant William M. Ferry Jr., who had been accused of mismanaging his father's estate - was incorrect. The dissenting justices believed that there were significant issues with how evidence had been handled during trial proceedings, specifically regarding certain letters written by Mr. Ferry Sr., which they felt should not have been admitted as evidence due to their hearsay nature. They also disagreed with the majority’s interpretation of Michigan law concerning trusts and estates, arguing that it did not support such a broad application as used in this case to hold Mr. Ferry Jr liable for alleged losses incurred by his father’s trust fund under his management.