This case was brought before the Supreme Court of the United States by The President, Directors, and Company of the Bank of Tennessee (plaintiffs in error) against Lewis B. Horn (defendant). At issue was whether or not a state court had jurisdiction to hear a suit between citizens from different states when one party is an incorporated bank. The plaintiffs argued that since they were an incorporated body created by law with its own legal identity separate from its members, it should be treated as any other citizen for purposes of diversity jurisdiction under Article III Section 2 Clause 1 of the Constitution. On appeal to the Supreme Court, Chief Justice Taney delivered his opinion on behalf of himself and four other justices finding that while corporations are considered persons for some purposes such as taxation and contract rights, they do not have standing in federal courts based on diversity jurisdiction because their citizenship cannot be determined without reference to their individual shareholders who may come from different states than those where corporate headquarters are located. Ultimately this decision affirmed that only natural persons can invoke diversity jurisdiction in federal courts regardless if they are partaking in business through a corporation or otherwise.

In the case of The President, Directors, and Company of the Bank of Tennessee v. Lewis B. Horn, the Supreme Court was asked to decide whether a state court had jurisdiction over an action brought by a foreign corporation against one of its citizens in another state. The majority opinion held that it did not have such jurisdiction because there was no showing that any part of the cause arose within its boundaries or that either party resided therein at the time suit was commenced. However, Justice McLean dissented from this ruling on two grounds: firstly, he argued that under Article III Section 2 Clause 1 (the "diversity clause") Congress has granted federal courts exclusive original jurisdiction over all cases between citizens of different states; secondly he argued that even if diversity were not present in this case then still it should be heard by a federal court as per Article IV Section 1 which requires each state to give full faith and credit to public acts records and judicial proceedings from other states. In conclusion Justice McLean believed strongly enough in his dissenting opinion for him to stand alone against seven justices who voted otherwise - thus upholding his belief in both Articles III & IV Sections 1 & 2 Clauses 1 respectively as being applicable heretofore regardless if diversity is present or absent