This Supreme Court case involved a dispute between the Bank of the Metropolis and the New England Bank. The former had sued for payment on two promissory notes, issued by an individual to whom both banks had loaned money. The defendant argued that it was not liable because its loan agreement with this individual contained a clause stating that no other debt should be contracted without their consent. However, the court ruled in favor of the plaintiff, finding that such clauses were void as they violated public policy and interfered with creditors’ rights to collect debts owed them. Furthermore, since both parties knew about each other’s loans when entering into their respective agreements, there was no reason why one party should have been able to prevent another from collecting what was due them under contract law principles. As such, it held that neither bank could use this clause as a defense against liability for payment on these notes.

The dissenting opinion in this case was that the New England Bank had a right to receive payment from the Bank of Metropolis, as it was not barred by any statute or rule. The majority opinion held that since the note given by the Bank of Metropolis did not specify when it should be paid, and because there were no other agreements between them regarding payment terms, then they could only pay on demand. However, Justice Catron argued that even though no specific time for repayment had been agreed upon, both parties knew what their obligations were and thus an implied agreement existed which allowed for reasonable time to make payments without being considered in default. He further stated that if such an agreement did exist then it would have been breached by either party if one demanded immediate payment without giving sufficient notice beforehand. Therefore he concluded that under these circumstances neither bank could claim damages against each other due to non-payment within a certain period of time as long as reasonable notice was given before demanding repayment.