In Caperton v. Bowyer, the Supreme Court of the United States was asked to decide whether a state court judge should have recused himself from a case in which he had a financial interest. The case involved a dispute between two parties over a contract for the sale of a steamboat. The defendant, Bowyer, had purchased the steamboat from the plaintiff, Caperton, but had failed to make the payments as agreed. Caperton sued Bowyer for breach of contract. The case was heard by a state court judge who had a financial interest in the outcome of the case. The judge had loaned money to Bowyer and was expecting to be repaid if Bowyer won the case. The Supreme Court held that the judge should have recused himself from the case due to his financial interest. The Court reasoned that a judge should not be allowed to decide a case in which he has a personal interest, as this would create an appearance of bias and undermine public confidence in the judicial system. The Court also noted that the judge had a duty to disclose his financial interest in the case, and that his failure to do so was a violation of his ethical obligations. The Court's decision in Caperton v. Bowyer established the principle that judges must recuse themselves from cases in which they have a financial interest. This decision has been cited in numerous subsequent cases and is an important part of the legal landscape today.

In the case of Caperton v. Bowyer, the Supreme Court was asked to decide whether a judgment rendered by a court in Virginia should be reversed due to bias on the part of one of its judges. The majority opinion held that there had been no evidence presented which showed that any actual bias or prejudice existed and thus declined to reverse the lower court's decision. However, Justice Field dissented from this ruling and argued that it was not necessary for proof of actual bias or prejudice to exist in order for an appellate court to overturn a lower court's decision; rather, he believed that when circumstances surrounding a judge’s involvement with either party indicate even potential partiality then such action is sufficient grounds for reversal. He further stated that if courts are allowed unchecked discretion without regard for public perception then they will become “instruments of injustice” instead of impartial arbiters between parties seeking justice under law.