The President and Directors of the Bank of the State of Alabama brought a case against Robert H. Dalton in which they argued that he had failed to pay back money owed on two promissory notes. The bank sought to recover damages from Dalton for his breach of contract, as well as interest on the unpaid debt. In response, Dalton claimed that he was not liable for any payment due because one note had been issued by an agent without authority and thus was voidable under state law. The Supreme Court ultimately ruled in favor of the bank, finding that even though there were some irregularities with regard to how one note was issued, it did not invalidate either instrument or relieve Dalton from his obligation to repay them both according to their terms.

In the case of The President and Directors of the Bank of the State of Alabama v. Robert H. Dalton, Chief Justice Taney delivered a dissenting opinion in which he argued that Congress did not have authority to pass an act allowing for suits against state banks by individuals who had been issued notes from those banks. He further argued that such an act would be unconstitutional as it would interfere with states' rights under Article I, Section 10, Clause 1 (the Contract Clause) and Article IV, Section 2 (the Supremacy Clause). Additionally, Taney contended that if Congress was allowed to pass this type of legislation it could potentially lead to other laws being passed which could infringe upon states' sovereignty even more than what was proposed in this particular case. Ultimately, Taney concluded that while there may be some instances where federal law should supersede state law when necessary for public safety or welfare; however this particular instance did not meet these criteria and thus should remain within the purview of individual states rather than at a federal level.