Boughton v. Exchange Bank is a United States Supreme Court case that dealt with the issue of whether a bank could be held liable for the negligence of its employees. The case involved a dispute between the Exchange Bank of New York and its customer, Boughton. Boughton had deposited a large sum of money with the bank, and the bank had agreed to pay him interest on the deposit. However, the bank's employees negligently failed to pay the interest, and Boughton sued the bank for the damages he suffered as a result. The Supreme Court held that the bank could be held liable for the negligence of its employees. The Court reasoned that the bank had a duty to its customers to exercise reasonable care in the management of their funds, and that the bank had breached this duty by failing to pay the interest due to Boughton. The Court also held that the bank was liable for the damages suffered by Boughton, as the bank had failed to exercise reasonable care in the management of his funds. In conclusion, the Supreme Court held that the Exchange Bank of New York was liable for the negligence of its employees, and that Boughton was entitled to damages for the breach of the bank's duty to exercise reasonable care in the management of his funds.

Justice Field delivered the dissenting opinion in Boughton v. Exchange Bank, arguing that the majority's decision was contrary to established precedent and would lead to serious consequences for creditors. He argued that a bank has no right of setoff against an insolvent customer unless it is specifically provided by state law or contract between the parties. The court had previously held in other cases that such a right does not exist without express agreement from both sides, and Justice Field believed this should be applied here as well. Furthermore, he noted that allowing banks to unilaterally exercise their rights of setoff could have dire financial implications for debtors who are already struggling with insolvency; if banks can take money out of accounts whenever they please, then those debts will never be paid off and creditors may suffer significant losses due to lack of repayment from their customers. In conclusion, Justice Field argued strongly against granting banks broad powers over their customers' funds without any contractual basis or legal authority granted by state law.