The case of Mitchell Store Building Company v. Carroll, Trustee in Bankruptcy of Herman Keck Manufacturing Company (1913) revolved around a dispute over the payment for goods delivered to a bankrupt company. The Mitchell Store Building Company had supplied goods to the Herman Keck Manufacturing Company and was owed money when the latter went into bankruptcy. The trustee in bankruptcy, Carroll, argued that since these goods were not yet sold or turned into products by the manufacturing company at the time it declared bankruptcy, they should be considered part of its assets and used to pay off all creditors equally. On the other hand, Mitchell claimed that as per their contract with Keck Manufacturing Co., ownership rights would only transfer upon full payment; hence they should have priority claim on those specific assets or their value before distribution among general creditors. The Supreme Court ruled in favor of Carroll stating that under federal law governing bankruptcies at that time (Bankruptcy Act 1898), once a firm is declared bankrupt all its property comes under control of court-appointed trustee for equal distribution among rightful claimants unless there are valid liens against them which take precedence over unsecured claims.

In the dissenting opinion for Mitchell Store Building Company v. Carroll, the justice argued that the majority's decision was inconsistent with previous rulings and interpretations of bankruptcy law. The justice contended that a debtor should not be allowed to prefer one creditor over another in bankruptcy proceedings, as it undermines fairness and equality among creditors. He also disagreed with the majority's interpretation of "transfer" under Section 60a of Bankruptcy Act, arguing that it should include any act which diminishes or depletes a bankrupt estate’s assets to prejudice other creditors' rights. In this case, he believed Mitchell Store Building Company had indeed made such transfer by paying off its debt to Keck Manufacturing before filing for bankruptcy - an action he viewed as unfair preference detrimental to other creditors’ interests.