In the Davis v. Elmira Savings Bank case of 1895, the U.S Supreme Court ruled on a dispute involving land contracts and mortgage payments. The plaintiff, Davis, had purchased land from one Mr. Rathbone who held a mortgage with Elmira Savings Bank. When Rathbone defaulted on his loan payment to the bank, it foreclosed on him and sold his property at auction where it was bought by an individual named Arnot for less than its value. However, since Davis still owed money to Rathbone under their original contract agreement for purchasing the land before foreclosure occurred; he argued that he should be allowed to pay off this remaining debt directly to Arnot (the new owner) rather than having it go towards paying off Rathbone's debt with Elmira Savings Bank which had already been settled through foreclosure sale proceeds. The court disagreed with Davis' argument stating that once a property is foreclosed upon and sold due to default in mortgage payments; any existing contractual obligations between previous owners or buyers become void because they are superseded by foreclosure proceedings which legally transfer all rights of ownership including right of receiving outstanding debts related to said property onto new owner/buyer i.e., whoever buys such properties at foreclosure sales.

In the dissenting opinion for Davis v. Elmira Savings Bank, Justice Brewer argued that the majority's decision was inconsistent with previous rulings and principles of equity. He contended that a mortgage is not an absolute conveyance of property but merely a security for debt, and therefore should be treated as personalty rather than real estate in terms of taxation. The justice also pointed out that if mortgages were taxed as real estate, it would lead to double taxation since both the mortgaged property and the mortgage itself would be subject to tax. Furthermore, he disagreed with the majority's view on state sovereignty over taxation matters; while states have broad powers in this area, they are still bound by constitutional limitations which prohibit unfair or unequal treatment. In his view, taxing mortgages at their full value without considering their nature as securities violated these principles.