This Supreme Court case involved Eleazer F. Backus, the plaintiff in error, and William Gould and David Banks who were suing as well for the United States as themselves. The dispute arose from a contract between Backus and the two defendants to build a lighthouse on Lake Michigan at an agreed upon price of $5,000. After completing construction of the lighthouse, Backus submitted his bill for payment but was only paid $3,500 by Gould and Banks on behalf of the United States government due to alleged defects in its construction. As such he brought suit against them seeking full payment plus damages for breach of contract which they denied claiming that they had acted within their authority under federal law when making partial payment based on their assessment of quality control issues with respect to his workmanship. Ultimately it was determined that while there may have been some minor deficiencies in terms of craftsmanship these did not warrant withholding full payment since any additional costs associated with correcting those deficiencies would be far less than what remained unpaid under this agreement thus requiring that all remaining funds be released to him without further delay or deduction.

In the dissenting opinion of Eleazer F. Backus v. William Gould and David Banks, Justice McLean argued that the plaintiff was not liable for a debt owed to the United States because he had already paid it off in full prior to being sued by Gould and Banks. He noted that although there were some discrepancies between what Backus claimed he had paid and what was recorded on paper, this did not necessarily mean that his payment should be disregarded or invalidated; rather, it could simply indicate an error in record-keeping or accounting practices at the time. Furthermore, McLean pointed out that even if there were any remaining debts due from Backus to either party involved in this case (Gould & Banks as well as The United States), they would have been extinguished by virtue of a statute of limitations which barred such claims after six years had passed since their initial accrual date. Therefore, according to Justice McLean's dissent opinion, Eleazer F. Backus should not be held liable for any outstanding debts related to this case given all these circumstances taken together into consideration