In the case of New Orleans Canal and Banking Company v. Montgomery, the Supreme Court of the United States was asked to decide whether a state court had the authority to issue an injunction against a federal court. The case arose when the New Orleans Canal and Banking Company sought to collect a debt from Montgomery. Montgomery refused to pay, and the company sought an injunction from the state court to prevent him from disposing of his property. The state court granted the injunction, but Montgomery argued that the state court had no authority to issue an injunction against a federal court. The Supreme Court held that the state court did not have the authority to issue an injunction against a federal court. The Court reasoned that the state court was not a court of competent jurisdiction to issue such an injunction, and that the state court was not authorized to interfere with the proceedings of a federal court. The Court also noted that the state court had no power to enjoin a federal court from exercising its jurisdiction. The Court concluded that the state court had no authority to issue an injunction against a federal court, and that the injunction was therefore void. The Court also held that the state court had no power to interfere with the proceedings of a federal court. This decision established the principle that state courts cannot interfere with the proceedings of federal courts.

In the case of New Orleans Canal and Banking Company v. Montgomery, Justice Field delivered a dissenting opinion in which he argued that the majority had misapplied existing law to reach its conclusion. He noted that under Louisiana law, an action for damages could be brought against a corporation if it failed to pay dividends on its stock when due; however, this was not applicable in this case because there were no such provisions in the articles of association governing the company's operations. Furthermore, he argued that even if such provisions existed they would have been superseded by subsequent legislation passed by Congress regarding banking corporations operating within Louisiana. As such, Justice Field concluded that since there was no legal basis upon which to bring suit against the defendant bank for failing to pay dividends on its stock when due, judgment should have been entered in favor of Montgomery instead of New Orleans Canal and Banking Company.