John Clay, plaintiff in error, brought a case against Abraham Smith to the Supreme Court. The dispute was over a contract between them that stated Clay would pay Smith $1,000 for certain goods and services provided by Smith. However, when it came time to make payment on the contract, Clay refused and instead offered to settle with Smith for half of what he owed him. When this offer was rejected by Smith due to its unfairness, Clay then sued him in court claiming that he had already paid off his debt through other means such as labor or property given in exchange for the money owed. The Supreme Court ultimately ruled against Clay's claim stating that no evidence existed proving any sort of agreement between both parties regarding an alternate form of payment besides cash or currency; therefore making his argument invalid and upholding the original terms set forth within their initial contract which required full payment from John Clay.

In the case of John Clay vs. Abraham Smith, Justice Story delivered a dissenting opinion that argued against the majority decision. He believed that there was sufficient evidence to prove that Smith had committed fraud in his dealings with Clay and should be held liable for damages as a result. Story noted that although it was true that some of the facts were disputed between the parties, there were still enough undisputed facts to support a finding of fraudulent conduct on Smith's part. Furthermore, he argued that even if all of Clay's allegations could not be proven beyond reasonable doubt, they should still have been taken into consideration when determining whether or not fraud had occurred since this is an equitable action where "the court must look at all circumstances." In conclusion, Justice Story concluded by stating his belief "that justice requires [Smith] to make reparation" for any wrongs done against Clay and urged the Court to reverse its ruling in favor of Smith so as to provide such relief.