In the case of United States Mortgage Co. et al. v. Matthews et al., 1934, the Supreme Court was asked to decide on a dispute regarding property rights and mortgage payments in relation to bankruptcy proceedings. The appellants, United States Mortgage Company and others, had purchased properties at foreclosure sales but were later declared bankrupt before they could complete payment for these purchases. The appellees (Matthews and others), who held second mortgages on these properties, argued that they should be allowed to claim from the bankruptcy estate as secured creditors because their liens had not been extinguished by the incomplete foreclosure sales. The Supreme Court ruled against them stating that under New York law (which governed this case), title passed upon sale regardless of whether full payment was made or not; therefore, when U.S Mortgage Co bought those properties at auction it acquired absolute ownership including all equity of redemption which effectively cut off any junior lienholders' claims such as those from Matthews et al. This decision clarified how property rights are determined in cases where there is an incomplete transaction due to insolvency or bankruptcy - with priority given to first-in-time interests over subsequent ones.

In the dissenting opinion for the United States Mortgage Co. et al. v. Matthews et al., 1934 case, it was argued that the majority's decision to uphold a state law allowing mortgagors an extended redemption period after foreclosure sale contradicted previous Supreme Court rulings and undermined contractual obligations. The dissent emphasized that such laws retroactively altered contract terms, which is constitutionally prohibited as it impairs obligation of contracts under Article I, Section 10 of the Constitution. They contended that this ruling would create uncertainty in business transactions and discourage investment because parties could not rely on agreed-upon terms being enforced by courts if states can change them retrospectively through legislation.