In the 1932 case Munroe v. Raphael, the United States Supreme Court ruled on a dispute involving bankruptcy and stockholder liability. The defendant, Raphael, was a shareholder in an insolvent national bank and had been assessed by the Comptroller of Currency for his proportionate share of debts owed by the bank under federal banking law. However, he argued that he should not be held liable because he had transferred his shares to another party before receiving notice of assessment from the Comptroller. The court disagreed with this argument; it held that since Raphael was still officially listed as a shareholder at the time when insolvency proceedings began against the bank (even though he had already arranged to transfer his shares), he remained legally responsible for paying off part of its debt.

In the dissenting opinion for Munroe v. Raphael, Justice Stone argued that the majority's decision was inconsistent with previous rulings of the court and violated principles of equity. He contended that a receiver in bankruptcy should not be allowed to recover payments made by an insolvent debtor during insolvency if those payments were made in good faith and without knowledge of insolvency. The justice believed this principle should apply even when such payments are preferential, meaning they favor one creditor over others. According to him, allowing recovery under these circumstances would unjustly penalize innocent creditors who received payment without any suspicion or awareness about the debtor's financial condition. This view contrasts sharply with the majority opinion which upheld recovery on grounds that it prevents unequal treatment among creditors and discourages reckless lending practices.