In the case of Two Hundred Chests of Tea, Smith, Claimant (1824), the Supreme Court was asked to decide whether a claimant could recover damages from an insurance company for tea that had been destroyed by fire. The claimant argued that he had purchased two hundred chests of tea and insured them with the defendant's company. He claimed that his goods were damaged in a fire at sea while they were being transported on board a vessel owned by another party. The defendant denied liability on the grounds that it did not insure against losses caused by fires occurring outside its own vessels or those under its control. After examining all relevant evidence and arguments presented before it, the court ruled in favor of Smith, finding him entitled to recover damages from the insurer for his loss due to destruction caused by fire aboard another ship.

In Two Hundred Chests of Tea, Smith, Claimant (1824), the Supreme Court was tasked with determining whether a duty imposed on imported tea by an act of Congress could be collected from the importer after it had been sold to another. The majority opinion held that the duty should not be paid because it would amount to double taxation and violate principles of equity. Justice Johnson wrote a dissenting opinion in which he argued that allowing such a practice would lead to fraud and evasion as purchasers could avoid paying duties simply by transferring ownership before they were due. He also noted that if this principle was adopted then all revenue laws passed by Congress would become ineffective since any person liable for payment could easily transfer their property or goods prior to collection. Ultimately, Johnson concluded that while there may have been some hardship in requiring Smith pay the duty on his tea after selling it, this did not outweigh what he saw as its necessity for upholding Congressional authority over taxation matters.