In the 1928 case of Oriel et al. v. Russell, Trustee, the United States Supreme Court dealt with a dispute over bankruptcy proceedings and property rights. The plaintiffs were creditors who had lent money to a company that subsequently went bankrupt. They claimed they should have priority in receiving payment from the sale of assets because their loans were secured by liens on some of those assets. However, these claims conflicted with those made by other creditors whose debts were unsecured but who argued that all proceeds from asset sales should be distributed equally among all creditors regardless of whether or not their loans were secured. The Supreme Court ruled in favor of the lienholders (Oriel et al.), stating that under federal law at the time, when a debtor goes into bankruptcy, any valid liens on its property survive and continue to secure repayment for their holders even after liquidation has occurred.

In the dissenting opinion for Oriel et al. v. Russell, Trustee, 1928 case, Justice Stone argued that the majority's decision was inconsistent with previous rulings and principles of equity. He contended that a trustee in bankruptcy should not be allowed to recover payments made by an insolvent debtor in good faith before bankruptcy proceedings began if those payments were part of normal business transactions and did not prefer one creditor over another. In his view, such recovery would disrupt commercial relationships and undermine confidence in business transactions. Furthermore, he believed it would unfairly penalize creditors who had no reason to suspect insolvency or anticipate bankruptcy at the time they received payment from their debtors.