The Mechanics Bank of Alexandria appealed to the US Supreme Court after Adam Lynn refused to pay a debt he owed them. The bank argued that they had loaned money to Lynn and were entitled to repayment, but Lynn claimed that the bank was not legally authorized by Virginia law at the time of their agreement. The Supreme Court ruled in favor of Lynn, finding that since the bank did not have legal authority from Virginia when it made its loan agreement with him, it could not collect on its debt. This decision established an important precedent for state-chartered banks: if a state does not grant permission for such institutions, then any agreements or contracts entered into are invalid and unenforceable.

In the dissenting opinion of The Mechanics Bank of Alexandria, Appellants vs. Adam Lynn, Appellee, Justice Story argued that the court should have found in favor of the bank and reversed the decision from below. He believed that a contract between two parties was binding and could not be altered without mutual consent or agreement by both sides. Furthermore, he argued that if one party had acted upon their understanding of an agreement then they were entitled to rely on it as being valid until such time as it was proven otherwise through legal proceedings. In this case, he felt that since there had been no proof presented to show any fraud or misrepresentation on behalf of either side then there should be no reason for invalidating what appeared to be a legitimate contract between them. Therefore, Justice Story concluded his dissent by arguing against reversing the lower court's ruling in favor of appellee Adam Lynn and instead finding in favor of appellant The Mechanics Bank Of Alexandria