In the case of Smith, Trustee, et al. v. Hoboken Railroad, Warehouse and Steamship Connecting Co. et al., 1945, the Supreme Court was tasked with determining whether a bankruptcy court had jurisdiction to adjudicate claims against a bankrupt railroad company by creditors who were not residents or citizens of the state where the bankruptcy proceedings were taking place. The Court held that such an exercise of jurisdiction did not violate due process rights under the Fifth Amendment because it was necessary for efficient administration of bankruptcy laws and protection of all parties involved in these proceedings. This decision established that federal courts have broad powers in matters related to bankruptcy cases.

The dissenting opinion in the case of Smith, Trustee, et al. v. Hoboken Railroad, Warehouse and Steamship Connecting Co. et al., argued that the majority's decision was a departure from established principles of equity jurisdiction and practice. The dissenters contended that the court had no authority to order an accounting for profits derived from property not part of the trust res or corpus at issue in this litigation - particularly when such an order would result in a substantial windfall to beneficiaries who contributed nothing towards those profits. They further maintained that there were other legal remedies available to address any alleged wrongdoing by trustees without resorting to such drastic measures as ordered by the majority.