In the 1943 case United States v. Seattle-First National Bank, the U.S Supreme Court was tasked with deciding whether a bank could be held liable for damages when it failed to honor Treasury checks due to insufficient funds in the account of the payee. The court ruled that banks are not responsible for verifying if sufficient funds exist before honoring government checks and cannot be held liable if they fail to do so. This decision came after an incident where Seattle-First National Bank refused payment on two treasury checks because there were insufficient funds in the depositor's account at that time. The United States sued, claiming that this refusal constituted a breach of duty by failing to honor its obligations as a depository of public money under federal law. However, Justice Frank Murphy delivered an opinion stating that no such obligation existed under federal law or general banking principles.

In the dissenting opinion for United States v. Seattle-First National Bank, the justice argued that the majority's decision was a departure from established principles of law and an unwarranted extension of governmental power. The justice contended that there was no statutory or constitutional authority allowing the government to seize property without just compensation, as it had done in this case by taking over a debtor's assets to satisfy its own claim before other creditors could be paid. This action violated both due process rights and contractual obligations between private parties, according to the dissenting view. Furthermore, it undermined confidence in commercial transactions by introducing uncertainty about whether contracts would be honored if one party became indebted to the government. The justice also criticized what he saw as an overly broad interpretation of wartime powers under which this seizure took place; while acknowledging that extraordinary measures might sometimes be necessary during times of war, he cautioned against using such circumstances as justification for disregarding fundamental legal protections.