In the case of Citizens' Saving and Loan Association v. Perry County, the U.S. Supreme Court addressed a dispute over tax payments on bonds issued by Perry County in Alabama to fund railroad construction. The plaintiff, Citizens' Saving and Loan Association, was an Ohio-based company that owned some of these bonds but refused to pay taxes levied on them by Alabama authorities arguing that they were exempt from taxation under state law at the time they were issued. However, this exemption had been repealed before the lawsuit was filed. The court ruled against Citizens', stating that while contracts between a government entity and private parties should generally be respected as per constitutional principles protecting contract rights (the Contract Clause), there are exceptions when it comes to taxation powers which are essential for governments’ functioning. Therefore, even if there was initially an agreement not to tax these particular bonds - something disputed in this case - such agreements could be overridden by subsequent legislation imposing taxes because states cannot limit their future exercise of taxing power through contractual commitments unless explicitly provided for in its constitution or laws.

In the dissenting opinion for Citizens' Saving and Loan Association v. Perry County, Justice Brewer argued that the majority's decision was inconsistent with previous rulings of the court. He contended that a state cannot tax national banks more heavily than its own state banks under federal law. The justice believed that this principle should also apply to savings and loan associations chartered by other states operating within a given state's borders. In his view, it was unfair and unconstitutional for Missouri to impose higher taxes on out-of-state savings institutions like Citizens' Savings & Loan Association while taxing in-state institutions at lower rates. This, he asserted, violated both equal protection principles as well as interstate commerce protections provided by the Constitution.