In the 1936 case American Propeller & Manufacturing Co. v. United States, the Supreme Court ruled on a dispute over patent rights and royalties between the U.S government and American Propeller & Manufacturing Co., a private company. The company had been granted patents for certain types of airplane propellers which were then used by the government during World War I without obtaining licenses or paying royalties to American Propeller. The court held that under Section 3477 of Revised Statutes, any agreement made with an unauthorized agent was void unless ratified by Congress - in this case, no such ratification occurred so there was no valid contract for royalty payments from the Government to American Propeller. Furthermore, it stated that even if there had been a valid contract, it would have ended when war broke out as per international law principles regarding enemy property rights.

The dissenting opinion in the case of American Propeller & Manufacturing Co. v. United States argued that the majority's decision to hold a private company liable for damages caused by an airplane crash was unjust and unsupported by existing law or precedent. The dissenters believed that the government, as owner and operator of the aircraft, should bear sole responsibility for any accidents or damage resulting from its operation. They contended that holding a manufacturer responsible for defects in equipment used by another party after sale would set a dangerous precedent, potentially exposing all manufacturers to unlimited liability for actions taken with their products post-sale over which they have no control. Furthermore, they pointed out inconsistencies between this ruling and previous decisions made on similar cases involving maritime law where shipbuilders were not held accountable for accidents occurring after delivery of vessels to their owners.