In the United States v. Spaulding case of 1934, the Supreme Court ruled on a matter concerning bankruptcy law and fraudulent conveyance. The respondent, Mr. Spaulding, had transferred property to his wife shortly before declaring bankruptcy in an attempt to prevent it from being seized by creditors. The trustee overseeing the bankruptcy proceedings sued Mrs. Spaulding for return of this property under Section 67e of the Bankruptcy Act which allows trustees to recover assets fraudulently conveyed within one year prior to filing for bankruptcy if no fair consideration was given in exchange for them. The lower courts initially sided with Mrs. Spaulding but upon appeal, the Supreme Court reversed their decision stating that she did not provide "fair consideration" as defined by New York state law (which governed this particular case). Therefore, her husband's transfer of property was deemed fraudulent and subject to recovery by his creditors through their appointed trustee. This ruling set a precedent regarding how "fair consideration" is determined when examining potentially fraudulent transfers made prior to filing for bankruptcy - specifically that it must be evaluated according to relevant state laws rather than federal ones.

In the dissenting opinion for United States v. Spaulding, Justice Cardozo disagreed with the majority's decision to uphold a lower court ruling that denied compensation to an injured party in a car accident involving a U.S. mail truck. He argued that the government should not be immune from liability when its employees cause harm while performing their duties negligently or recklessly. Cardozo contended that this immunity doctrine was outdated and unjust, as it allowed the government to avoid responsibility for damages caused by its agents' actions, leaving innocent victims without recourse. He believed that if private citizens could be held liable for their negligent acts, then so too should governmental entities when acting through their representatives.