In this case D’Oench, Duhme & Co. used a bond that had no actual value as collateral to obtain a loan from the Federal Deposit Insurance Corporation [FDIC]. There was a question of conflict of laws when the judgment was appealed to the Supreme Court, of whether Illinois, Missouri or Federal Law was the appropriate Law under which to judge the case. The Supreme Court used the Federal Reserve act in order to find the petitioner liable under that federal law, because the FDIC reasonably relied upon that collateral when making its loan.

In Justice Jackson’s concurring opinion, he called on the court to make a more explicit answer to the question on the rule of law. He thought that the court should have applied federal ‘common’ law doctrine of estoppel to come to the same ruling.