In the case of Rector v. Commercial National Bank in 1905, the U.S. Supreme Court was tasked with determining whether or not a bank could be held liable for accepting deposits from an executor who misappropriated funds from an estate. The plaintiff, Rector, argued that the bank had accepted these deposits knowing they were being wrongfully appropriated by the executor and should therefore be held accountable for their part in this misuse of funds. However, after careful consideration of all evidence presented before them, including testimony suggesting that the bank had no knowledge of any wrongdoing on behalf of its depositor (the executor), it was ruled by Justice Brewer that there was insufficient proof to hold Commercial National Bank responsible for these losses incurred by Rector's estate due to fraudulent activity carried out independently by one individual client.

In the dissenting opinion for Rector v. Commercial National Bank, Justice Harlan argued that the majority's decision was inconsistent with previous rulings and principles of equity. He contended that a bank should not be allowed to profit from its own wrongdoing by charging interest on money it had wrongfully withheld from depositors. He also disagreed with the majority's interpretation of Arkansas law regarding interest rates, arguing that it did not permit banks to charge such high rates in these circumstances. Furthermore, he believed that allowing banks to do so would encourage them to withhold funds unlawfully in order to earn more interest. Therefore, he concluded that the judgment of the lower court should be reversed and remanded for further proceedings consistent with his views.