This case was a dispute between two national banks, the National Bank of the Commonwealth and the Mechanics' National Bank. The National Bank of the Commonwealth had been established in 1864 and was located in the city of Richmond, Virginia. The Mechanics' National Bank had been established in 1867 and was located in the city of Baltimore, Maryland. The dispute arose when the Mechanics' National Bank attempted to collect a debt from the National Bank of the Commonwealth. The Mechanics' National Bank argued that the debt was due and owing under the terms of a contract between the two banks. The National Bank of the Commonwealth argued that the contract was invalid because it had been made in violation of the National Bank Act of 1864. The Supreme Court held that the contract between the two banks was valid and enforceable. The Court found that the National Bank Act of 1864 did not prohibit the two banks from entering into a contract. The Court also held that the Mechanics' National Bank was entitled to collect the debt from the National Bank of the Commonwealth.

In National Bank of the Commonwealth v. Mechanics' National Bank, the Supreme Court was asked to decide whether a national bank could be held liable for damages caused by its negligence in failing to pay a check that had been presented for payment. The majority opinion found that it could not, as Congress had not authorized such liability when creating national banks. Justice Field dissented from this ruling and argued that under common law principles, a party should be held responsible if they fail to exercise reasonable care in performing their duties and cause harm or loss as a result of their negligence. He further noted that while Congress may have intended to limit the liabilities of national banks when creating them, there was nothing preventing them from being subject to general tort laws like any other entity would be.