The U.S. Supreme Court case Midland National Bank of Minneapolis v. Dakota Life Insurance Company in 1927 revolved around the issue of whether a bank could be held liable for not honoring an insurance policy that was assigned as collateral for a loan, after the death of the insured party. The court ruled in favor of Dakota Life Insurance Company, stating that Midland National Bank had no right to refuse payment on the grounds that it did not have actual possession or control over the policy at any time before or after its assignment as collateral security. The court further stated that since there were no stipulations requiring physical delivery or retention by either party involved, and given that banks are often entrusted with valuable papers without retaining them physically, this lack of possession did not absolve Midland from liability.

The dissenting opinion in the case of Midland National Bank of Minneapolis v. Dakota Life Insurance Company argued that the majority's decision was inconsistent with previous rulings and principles regarding contract law. The dissenter contended that a bank, when acting as a trustee, should be held to higher standards than an ordinary individual or corporation due to its fiduciary responsibilities. They believed that the bank had failed in these duties by not properly managing and protecting the trust assets, which led to significant losses for Dakota Life Insurance Company. Furthermore, they disagreed with the majority's interpretation of "gross negligence," arguing instead for a stricter definition that would hold banks more accountable for their actions while serving as trustees.