In the 1896 case of Willard v. Wood, the United States Supreme Court ruled on a dispute involving property rights and bankruptcy law. The appellant, Mr. Willard, had purchased property from Mr. Wood who later declared bankruptcy before he could fully pay off his mortgage to Willard. When the assignee in bankruptcy attempted to sell Wood's remaining interest in the property without accounting for Willard's claim as a creditor, Willard sued to prevent this sale and protect his financial interests. The Supreme Court held that under federal law at that time (the Bankruptcy Act of 1867), an assignee in bankruptcy was required to respect all valid liens against a bankrupt debtor’s estate existing at the time of filing for bankruptcy - including mortgages like those held by Mr.Willard over Mr.Wood's properties. Therefore, it was decided that any attempt by an assignee or trustee in bankruptcy to dispose of such encumbered assets must take into account these pre-existing claims; otherwise they would be invalid sales not binding upon lien holders like creditors or mortgagees.

In the dissenting opinion for Willard v. Wood, it was argued that the majority's decision to uphold a law allowing private property to be taken without due process of law contradicted previous court rulings and violated constitutional rights. The dissenting justices believed that this ruling gave too much power to municipal corporations, enabling them to seize private property arbitrarily under the guise of public use. They contended that such actions should only be permissible if they served a clear public necessity or benefit, which wasn't evident in this case. Furthermore, they expressed concern about potential abuses of power stemming from this ruling and its implications on individual liberties and property rights.