In the case of First National Bank of Cleveland v. Shedd, the Supreme Court of the United States was asked to decide whether a bank could be held liable for a check that was issued without sufficient funds in the account. The plaintiff, Shedd, had received a check from the defendant, First National Bank of Cleveland, for $1,000. Shedd deposited the check in his own bank, but the check was returned for insufficient funds. Shedd then sued the First National Bank of Cleveland for the amount of the check. The Supreme Court held that the bank was liable for the amount of the check. The Court reasoned that the bank had a duty to ensure that the check was backed by sufficient funds before it was issued. The Court also noted that the bank had a duty to inform Shedd of the insufficient funds before the check was issued. The Court concluded that the bank was liable for the amount of the check, and ordered it to pay Shedd the amount of the check plus interest. In conclusion, the Supreme Court held that the First National Bank of Cleveland was liable for the amount of the check that was issued without sufficient funds in the account. The Court ordered the bank to pay Shedd the amount of the check plus interest.

In the case of First National Bank of Cleveland v. Shedd, the Supreme Court was tasked with determining whether a bank could recover on an unpaid note from a third party who had received payment for goods sold to the maker of said note. The majority opinion held that such recovery was not possible as it would be contrary to established principles and public policy. Justice Field dissented, arguing that while there may have been some doubt in prior cases regarding this issue, those doubts should now be resolved in favor of allowing banks to recover on notes from third parties who had already received payment for their goods or services. He further argued that if banks were unable to do so they would suffer great losses due to bad debts and ultimately lead them into insolvency which is against public policy itself. In conclusion, Justice Field believed that since no clear precedent existed at the time then one should be created by ruling in favor of allowing banks like First National Bank of Cleveland to collect payments from third parties even after they have already been paid for their goods or services