The Supreme Court case of Georgia Railroad and Banking Company v. Smith was a dispute between the Georgia Railroad and Banking Company and Smith, a former employee of the company. Smith had been employed by the company for several years and had been given a loan of $2,000. Smith had failed to repay the loan and the company sued him for the amount. The Supreme Court ruled in favor of the company, finding that Smith had breached his contract with the company by failing to repay the loan. The Court held that the company was entitled to recover the full amount of the loan, plus interest, from Smith. The Court also held that the company was entitled to recover its attorney's fees and costs associated with the lawsuit. The Court's decision was based on the principle that a contract is a binding agreement between two parties and that a party who breaches the contract is liable for any damages caused by the breach. The Court also noted that the company had acted in good faith in providing the loan to Smith and that Smith had failed to fulfill his obligations under the contract.

In the dissenting opinion of Georgia Railroad and Banking Company v. Smith, Justice Field argued that the majority's decision was in direct violation of a long-standing precedent established by prior Supreme Court decisions. He noted that under this precedent, it had been held for many years that when an individual has received money from another party on account of a debt or obligation, they are not allowed to recover any additional amount beyond what is due them without first returning all payments made by the other party. In this case, Smith had already received payment from Georgia Railroad and Banking Company for his claim against them; thus he should not be able to receive any more than what he was owed without first refunding all payments made by Georgia Railroad and Banking Company. Justice Field concluded his dissent with a warning about disregarding well-established precedents: “The disregard which has been manifested in some recent cases…for former adjudications upon questions involving rights acquired under contracts will lead to great confusion if persisted in”