This case involved Joseph J. Kennedy, Trustee of Henry Shultz, an insolvent debtor and for the creditors of said Henry Shultz, and Henry Shultz as appellants against The Bank of the State of Georgia, The City Council of Augusta, John McKinne and Gazaway B. Lamar as appellees. At issue was whether or not a state bank could be held liable to pay debts incurred by its president while acting in his official capacity on behalf of the bank. In this case it was determined that when a person is appointed to act in an official capacity with authority from a corporation such as a state bank they are considered agents who can bind their principal (the corporation) through their acts within the scope or limits set forth by law for them to act upon behalf of said principal; thus making them personally responsible for any debt contracted during such time period even if those actions were unauthorized beyond what had been granted under law previously established.

In the dissenting opinion of this case, Justice McLean argued that the Bank of Georgia was not entitled to a preference in payment over other creditors. He believed that since Henry Shultz had been declared insolvent and his assets were insufficient to pay all debts, they should be distributed among all creditors equally. Furthermore, he noted that while it is true the Bank held a mortgage on certain property belonging to Shultz at the time of his insolvency, such mortgages do not take precedence over other claims against an estate unless there are specific provisions in state law allowing for such preferences. Since no such laws existed in Georgia at this time, Justice McLean concluded that any payments made by Shultz's trustee must be divided among all creditors according to their respective rights and interests without giving preference or priority to any one creditor.