The U.S. Supreme Court case Sterrett v. Second National Bank of Cincinnati, Ohio in 1918 revolved around a dispute over the payment of checks between two banks - Alabama Trust & Savings Company and the Second National Bank of Cincinnati, Ohio. The Alabama bank had gone into receivership and its receiver, Sterrett, sued to recover payments made on checks that were presented after it went insolvent but before it officially closed for business. The court ruled against Sterrett stating that under national banking laws at the time, a check is considered paid when it's charged to the account holder's funds; hence any subsequent insolvency does not affect this transaction as long as there was no knowledge or notice about such insolvency beforehand by either party involved in the transaction.

In the dissenting opinion for the case of Sterrett v. Second National Bank of Cincinnati, Ohio, it was argued that Alabama law should have been applied to determine whether or not a receiver could sue in another state. The majority had ruled based on federal common law instead. The dissenting justices believed this approach undermined states' rights and ignored established legal principles regarding receivership. They contended that since the bank's insolvency proceedings were taking place in Alabama, its laws should govern all related matters including lawsuits filed by the receiver elsewhere. This would ensure consistency and fairness while respecting each state's sovereignty over its internal affairs.