In the case of Ohio Valley National Bank v. Hulitt in 1906, the U.S Supreme Court was tasked with determining whether a bank could be held liable for accepting deposits from an insolvent depositor who had defrauded his creditors. The court ruled that banks are not responsible for investigating the financial status of their depositors and cannot be expected to know if they have committed fraud against their creditors. Therefore, it is not within a bank's duty to refuse deposits from potentially insolvent customers or return those funds to defrauded creditors. This ruling established important legal precedent regarding banking practices and liability.

In the dissenting opinion for Ohio Valley National Bank v. Hulitt, it was argued that the majority's decision to allow a bank to recover money paid on a forged check contradicted established legal principles and precedent. The dissent pointed out that banks have an obligation to know their customers' signatures and are expected to bear the loss if they fail in this duty by paying out on a forgery. It was also noted that allowing recovery in such cases could potentially open up opportunities for fraud, as there would be less incentive for banks to verify signatures carefully if they knew they could simply reclaim any losses later. Furthermore, it was suggested that permitting recovery might unfairly shift the burden of risk onto innocent third parties who received payment from the bank in good faith.