In the United States v. Pendell case of 1901, the Supreme Court ruled on a matter concerning customs duties and importation laws. The defendant, William H. Pendell, was accused of fraudulently undervaluing imported goods to evade paying full customs duties in violation of U.S law. He argued that he should not be held liable because he had relied on false invoices provided by foreign sellers who had deceived him about the true value of these goods. The Supreme Court disagreed with Pendell's argument and upheld his conviction for smuggling under Section 2864 (now Section 1592) of Title 19, which prohibits fraudulent practices related to imports into the United States. The court reasoned that as an experienced importer familiar with market values, Pendell could not have reasonably believed in good faith that such low prices were accurate. This decision established a precedent emphasizing importers' responsibility for ensuring accuracy when declaring their merchandise's value at customs regardless if they are misled by others or not.

The dissenting opinion in the United States v. Pendell case argued that the court majority had erred in its interpretation of the law and its application to this particular case. The dissenting justices believed that Mr. Pendell's actions did not constitute a violation of Section 5209 of the Revised Statutes, which was designed to punish bank officers who embezzled or misapplied funds from their institutions for personal gain. They contended that while Mr. Pendell may have acted irresponsibly by loaning money without proper security, he did not act with fraudulent intent nor derive any personal benefit from his actions - two key elements required for conviction under Section 5209 according to their understanding of it. Therefore, they felt his conviction should be overturned as it was based on an overly broad interpretation of what constituted "misapplication" under this statute.