In Thorington v. Montgomery, the U.S. Supreme Court ruled on a dispute over a promissory note issued during the Civil War by an Alabama resident to another in Confederate currency. The plaintiff argued that since it was illegal for any state to issue its own currency under the Constitution, and because Confederate notes were worthless after the war, he should not have to pay back his debt in gold or silver as demanded by the defendant. However, Justice Horace Gray delivered an opinion stating that although states cannot issue their own legal tender, individuals can still make contracts with whatever form of payment they agree upon - including foreign money or commodities like wheat or cotton - so long as both parties understand what is being exchanged at time of contract formation. Therefore, even though Confederate notes became worthless after defeat of Confederacy and despite illegality of secessionist government's actions overall (including issuing its own money), this did not invalidate private contracts made using such notes during wartime when they had perceived value among Southern residents.

In the dissenting opinion for Thorington v. Montgomery, it was argued that the majority's decision to allow a claim on cotton seized during the Civil War contradicted previous rulings and principles of international law. The dissent emphasized that under established legal doctrine, property used in rebellion against a government becomes enemy property and is subject to seizure without compensation. This principle applies even if the owner did not personally participate in or support the rebellion. In this case, since Alabama had joined the Confederacy at time of seizure, all properties within its borders were considered enemy properties regardless of their owners' loyalties. Therefore, according to this view, Mr.Thorington should not be entitled to any compensation for his confiscated cotton as it was legally deemed an enemy property during wartime.