Preston v. Browder was a case heard by the United States Supreme Court in 1816. The dispute arose when Preston, an agent of the Bank of the United States, sued Browder for failing to pay on two promissory notes he had signed and issued to Preston as payment for goods purchased from him. The issue before the court was whether or not these notes were valid contracts under state law at that time. After considering all evidence presented, including testimony from witnesses and legal arguments made by both parties' attorneys, Chief Justice John Marshall delivered his opinion on behalf of a unanimous court finding in favor of Preston's claim against Browder. He held that since there was no applicable statute prohibiting such agreements between individuals at that time, they should be considered valid contracts under common law principles and thus enforceable in courts of law. This decision established important precedent regarding contract formation which is still followed today throughout much of America's legal system

In Preston v. Browder, the Supreme Court was asked to decide whether a state court had jurisdiction over a case involving citizens of different states. The majority opinion held that the state court did have jurisdiction and could hear the case. However, Justice Story dissented from this decision on two grounds: firstly, he argued that there was no express authority in either federal or state law for such an exercise of power by a state court; secondly, he argued that if it were allowed then it would be unconstitutional as it would violate Article III of the Constitution which gives exclusive original jurisdiction to federal courts over cases between citizens of different states. He concluded by stating his belief that only Congress has the power to grant such authority to any other tribunal than those established under Article III and thus should not be granted here without congressional action.