In the 1907 case of Rankin v. City National Bank of Kansas City, Missouri, the U.S. Supreme Court was tasked with deciding on a dispute between two banks over priority in payment from an insolvent debtor's estate. The Capitol National Bank of Guthrie, Oklahoma had loaned money to a borrower who later became insolvent and went into receivership under Mr. Rankin; meanwhile, the borrower had also drawn drafts on his account at City National Bank without having sufficient funds there to cover them. When it came time for Mr. Rankin as receiver to distribute what assets remained in the debtor's estate among his creditors, both banks claimed they should be paid first: Capitol because its loans were secured by collateral (the drafts), and City because it argued that those drafts constituted checks which would give it priority under banking law. The Supreme Court ruled against Capitol bank and held that when a draft is drawn upon insufficient funds but accepted by another bank out of trust or mistake before insolvency proceedings begin against the drawer - even if not formally presented for payment until after such proceedings have begun - then this acceptance constitutes an assignment pro tanto (to that extent) of any eventual dividends from said proceedings in favor of said accepting bank.

In the dissenting opinion for Rankin v. City National Bank of Kansas City, Justice Harlan disagreed with the majority's interpretation of Oklahoma law regarding bank receiverships and insolvency. He argued that under Oklahoma law, a receiver could not prefer one creditor over another in distributing assets from an insolvent bank. The majority held that a receiver could pay off certain creditors before others if those payments were made as part of efforts to collect on debts owed to the insolvent bank. However, Justice Harlan contended this was incorrect and unfair to other creditors who would be left with less or nothing at all due to these preferences given by the receiver. Furthermore, he believed it violated principles of equity since it allowed some creditors to receive full payment while leaving others unpaid despite their equal legal standing as unsecured creditors.