In the case of Salem Trust Company v. Manufacturers' Finance Company et al., 1923, the Supreme Court dealt with a dispute over corporate bonds. The Salem Trust Company had purchased bonds from the Manufacturers' Finance Co., which later defaulted on its payments. As part of their agreement, if any default occurred, all unpaid principal and interest would become immediately due and payable at the option of bondholders. After defaulting, however, Manufacturers’ Finance Co was taken over by another company who refused to honor this clause in the original contract. The court ruled in favor of Salem Trust Company stating that when one corporation takes over another it also assumes responsibility for its debts unless explicitly stated otherwise during takeover negotiations or proceedings. Therefore, they were liable for immediate payment as per terms agreed upon between Salem Trust and Manufacturer's finance co before being taken over.

In the dissenting opinion for Salem Trust Company v. Manufacturers' Finance Company, Justice Holmes argued that the majority's decision was not consistent with established legal principles. He contended that a trust company acting as a trustee should be treated differently from an individual or corporation in terms of liability. According to him, when a trust company acts as a trustee, it is merely performing its duty and does not have any personal interest in the property being managed. Therefore, he believed that such companies should be exempted from certain liabilities associated with their role as trustees. Furthermore, he disagreed with the majority's interpretation of Massachusetts law regarding trusts and asserted that they had misapplied it to this case.