In Lowber v. Bangs, the Supreme Court of the United States held that a contract between two parties could not be enforced if it was found to have been made in violation of public policy. The case involved a dispute over an agreement between John Lowber and William Bangs for the sale of certain goods. In exchange for these goods, Mr. Bangs agreed to pay $500 plus interest at 10 percent per annum until paid in full; however, he failed to make any payments on time or even after being sued by Mr. Lowber for breach of contract. The court determined that since this agreement violated public policy as set forth by state law – which prohibited contracts with more than 8 percent interest – it could not be enforced and thus dismissed Mr. Lowber’s claim against Mr. Bangs without prejudice due to its illegality under state law

In Lowber v. Bangs, the Supreme Court of the United States was asked to decide whether a state court had jurisdiction over an action brought by a citizen of another state against citizens of that same other state. The majority opinion held that it did not have such jurisdiction and dismissed the case. In his dissent, Justice Field argued that under Article III Section 2 Clause 1 of the Constitution, which grants federal courts original jurisdiction in cases between citizens from different states, this case should be heard by a federal court rather than being dismissed outright. He further noted that while Congress has authority to limit or expand this type of original jurisdiction as it sees fit through legislation, no such law existed at present and thus there was nothing preventing this particular case from being heard in federal court.