In the Studebaker v. Perry case of 1901, the U.S Supreme Court ruled in favor of Perry, upholding a lower court's decision that he was not liable for damages claimed by Studebaker. The dispute arose from an agreement between both parties where Perry would sell certain properties to Studebaker and provide clear titles for them. However, it turned out some of these properties were already encumbered with liens which led to financial loss on part of Studebaker who then sued Perry for recovery. The court held that since there was no fraudulent intent on part of Perry and he had provided a bond indemnifying against any losses due to title defects as per their agreement, he could not be held responsible for the damages claimed by Studebaker.

The dissenting opinion in the case of Studebaker v. Perry argued that the majority's decision was fundamentally flawed because it failed to properly consider and apply relevant state laws. The dissent contended that under Indiana law, where the contract at issue was made, a debtor could legally assign his property for the benefit of certain creditors to the exclusion of others. Therefore, according to this view, Perry’s assignment should not have been deemed fraudulent simply because he chose to favor some creditors over others. Furthermore, they disagreed with how federal bankruptcy law had been interpreted by their peers on the bench; arguing instead that such laws were designed as an alternative remedy for debtors and did not supersede or invalidate existing state laws regarding assignments for benefits of creditors unless explicitly stated otherwise.