In the case City of Chicago v. Sturges (1911), the U.S Supreme Court dealt with a dispute over property rights and taxation. The city of Chicago had issued bonds to finance public improvements, which were purchased by Sturges. However, due to financial difficulties, the city was unable to repay these bonds when they matured and instead offered new ones in exchange for old ones at a lower interest rate. Sturges accepted this offer but later sued the city claiming that it had no right to issue new bonds without voter approval as required by Illinois law. The court ruled in favor of Chicago stating that while cities generally cannot incur debt without voter approval, there are exceptions where such debts are necessary for governmental functions or preserving its credit - like refinancing existing obligations at lower rates. Therefore, issuing replacement bonds did not constitute an increase in indebtedness requiring voter consent under state law. Furthermore, regarding taxation issues raised by Sturges who argued he should be exempt from taxes on his original bond holdings since they were replaced with tax-exempt securities; the court held that until those original securities were actually exchanged for new ones they remained taxable.

In the dissenting opinion for City of Chicago v. Sturges, Justice Holmes disagreed with the majority's decision to uphold a city ordinance that required building owners to install fireproof partitions in their buildings. He argued that this requirement was an unreasonable use of police power and violated property rights protected by the Fourteenth Amendment. According to him, while it is within a city’s right to enact laws for public safety, such laws must not infringe upon individual liberties without clear justification. In his view, there was no compelling evidence presented showing that non-fireproof partitions posed significant danger or risked public welfare enough to justify this intrusion on private property rights.