The U.S. Supreme Court case Logan County National Bank v. Townsend in 1890 revolved around a dispute over the payment of bonds issued by the town of Russellville, Kentucky to aid in railroad construction. The plaintiff, Logan County National Bank, held some of these bonds and sued for their payment when they were defaulted on by the defendant, Townsend who was acting as treasurer for Russellville at that time. The defense argued that since there had been irregularities in issuing the bonds - specifically not following statutory requirements like public notice and voter approval - they should be considered invalid and therefore non-payable. However, the court ruled against this argument stating that although there may have been procedural errors during issuance; once such securities are sold to innocent purchasers without any knowledge or suspicion about its legality then it is too late to question their validity based on those grounds alone. Therefore, despite possible initial irregularities with bond issuance process itself; if purchased under good faith then they must still be honored.

The dissenting opinion in the case of Logan County National Bank v. Townsend argued that the majority's decision was inconsistent with previous rulings and interpretations of the law. The justice disagreed with the majority's view that a national bank could be taxed by a state on its shares, arguing this violated federal laws protecting national banks from excessive taxation by states. He contended that such taxes were not only burdensome but also discriminatory against national banking associations, as they were being subjected to higher tax rates than other corporations or businesses within the same state. Furthermore, he believed it was unconstitutional for states to impose taxes on entities created and regulated by Congress under its constitutional powers. This interpretation would undermine federal supremacy and disrupt uniformity in national banking operations across different states.