In the 1932 case Spicer v. Smith, Special Deputy Banking Commissioner, the United States Supreme Court ruled on a matter involving bank receivership and shareholder liability. The plaintiff, Spicer, was a shareholder in an insolvent national bank that had been placed into receivership under Smith's authority as Special Deputy Banking Commissioner. Under federal law at the time, shareholders of such banks were liable for debts up to double their stock value if necessary to cover outstanding obligations after liquidation of assets. However, Michigan state law limited this liability to only the par value of shares held by each individual investor. Spicer argued that he should be subject only to Michigan's more lenient rule rather than federal statute due to his residence in that state; however, both lower courts rejected this argument and upheld his full potential liability under federal law. Upon appeal before the U.S Supreme Court though it was decided unanimously against Spicer’s claim stating Federal laws supersede State laws when they are inconsistent with each other according to Article VI Clause 2 (Supremacy Clause) of US Constitution.

In the dissenting opinion for Spicer v. Smith, Justice Stone argued that the majority's decision was a departure from established principles of law and equity. He contended that the court had failed to consider whether or not there was an adequate remedy at law before deciding on equitable relief. Furthermore, he disagreed with the majority's interpretation of Michigan state laws regarding banking regulations and insolvency proceedings, arguing they were misinterpreted in favor of granting extraordinary powers to banking commissioners which could potentially infrive upon constitutional rights. Justice Stone also expressed concern about potential harm caused by allowing such broad discretion without proper checks and balances in place.