In the 1918 case of Chesapeake & Delaware Canal Company v. United States, the Supreme Court ruled on a dispute over toll charges for government vessels using a privately owned canal. The Chesapeake and Delaware Canal Company had been charging the U.S. Government for use of its waterway, despite an agreement that exempted "public armed vessels" from such fees. The company argued that this exemption only applied to warships, not other types of government vessels like transport ships or supply boats. The court disagreed with this interpretation and sided with the U.S., ruling unanimously in favor of broadening the definition to include all military-owned or operated ships engaged in public service during wartime conditions - regardless if they were armed or not. This decision was based on both historical context (the original agreement dated back to 1825) and practical considerations (it would be impractical to distinguish between different types of military vessel). Thus, it established important precedent regarding contractual interpretations involving federal entities.

In the dissenting opinion for Chesapeake & Delaware Canal Company v. United States, it was argued that the government did not have a right to take over private property without just compensation. The justice disagreed with the majority's interpretation of "public use" in relation to eminent domain, arguing that this case represented an unjust expansion of governmental power. They contended that while public use could include things like roads or parks which directly benefit citizens, it should not extend to taking over a privately-owned canal company simply because it would be beneficial for national defense purposes. Furthermore, they believed there were other ways for the government to achieve its goals without infriting on private property rights such as negotiating contracts or leases with companies rather than seizing control outright.