In the case of Austin Nichols & Company v. Steamship Isla De Panay, 1924, Austin Nichols & Co., a New York-based company, sued for damages after their shipment of whiskey was seized by Philippine customs officials due to alleged violation of local laws prohibiting importation and sale of intoxicating liquors. The steamship Isla de Panay had transported the goods from New York to Manila under a bill of lading that included an agreement absolving the carrier from liability in cases where delivery could not be made due to government prohibition or restrictions. The Supreme Court ruled in favor of the steamship company stating that it was not liable for any loss suffered by Austin Nichols & Co as they were only responsible for transporting goods safely and promptly but did not guarantee successful delivery against all legal impediments such as those imposed by foreign governments.

In the dissenting opinion for Austin Nichols & Company v. Steamship Isla De Panay, it was argued that the majority's decision to hold the steamship company liable for damages caused by a fire on board was incorrect. The dissenting justices believed that there wasn't sufficient evidence to prove negligence on part of the ship owners or crew members, which should have been necessary in order to establish liability. They pointed out that fires can occur without any fault and stressed upon how difficult it is to determine their cause after they've occurred. Therefore, they contended that unless clear proof of negligence could be provided, it would be unfair and unjustified to impose such heavy financial burdens on ship owners who are already operating under risky conditions.